(This article was originally featured in Property Casualty 360)
Disruption has been the lead story for the last few years – and rightfully so. Rapid technology advancements, mass consumerization of new technologies and platforms, and marketplace entrants like Uber and Google are – and will continue – to create fundamental shifts in how business is conducted and how insurance products are developed, delivered, sold and serviced. Some experts advise on becoming part of the disruption – to disrupt the disrupters, while others maintain that meaningful innovation can come through continuous improvement. Your organization may be looking to accomplish one or both. Either way, introducing meaningful changes for sustained improvements requires focus and diligence to avoid being part of the estimated 60-70%1 of all change initiatives that fail.
Auto physical damage claims professionals are on the front lines of where change is ripe. The increasingly high expectations of consumers for convenience and control, and the organization’s need for competitive differentiation and expense management converge in the claims operation. Technology alone isn’t the answer. Your people need to be on board with change as well. As a software provider to more than 350 auto carriers, representing thousands of implementations and process changes, we’ve seen a set of common characteristics among those organizations that have been successful in effecting positive change – both for their business and the policyholder. With change coming from all directions, we want to share insights on how some insurers are positively effecting change in today’s auto claims environment.
Take Fear out of the Change Equation
“It is not the strongest or the most intelligent who will survive but those who can best manage change.” – Charles Darwin
Change creates lots of uncertainty. Will the change I propose fail? Is the change being introduced going to impact my job? Do I have the right skills to be part of the changed organization? These questions alone can create enough fear to lead individuals to forgo suggesting even the smallest of changes or to resist change coming down the pike. Organizations that have established a culture of embracing change and innovation have less fear of failure throughout the ranks and more success in introducing and implementing change. We’ve certainly seen this throughout our work. One fast-growing insurance company adopted a culture of allowing younger, less seasoned employees take an active role in software implementation projects. This approach enables these employees to gain valuable job experience early on while helping them assimilate into the corporate culture, which is a proponent of continuous improvement fueled by the introduction on new tools, systems and services.
Have a Clear Vision and Communicate it Broadly Across your Teams
Managing change requires a clear vision, communicated well, ensuring that everyone understands the intended outcome of the change, and the value it has. Too often that vision is expressed through a single lens: through the business lens. But a business perspective isn’t relevant to everyone on your team. For instance, one insurance carrier recently made the transition to the full suite of CCC solutions, which they knew would impact some their systems and processes. Their business case was clear: reduce costs and non-value-added steps and streamline the appraisal management process. A great vision, but they also realized that other stakeholders had their own vision for such a change. IT wanted to simplify the number of systems they had to monitor, update and maintain. Appraisers wanted to be more efficient in the field. Claims processing wanted to offload more of their routine tasks to self-service, freeing time to focus on complex claims. This carrier was ultimately successful in realizing its vision, thanks in large part to the change team’s ability to map out all of the stakeholders goals so that everyone’s objectives were understood, valued and met.
Assemble the Right Teams
Change does not take place in a vacuum; it requires the participation of key stakeholders – up, down and across the organization. As we noted above, often times meaningful change spans the organization, so bringing cross-functional teams together can help ensure the initiative is well thought out and hits the right targets.
We see the team approach frequently – and it works. Claims, IT, analytics specialists and call center representatives can help give a 360° view of the business and the impact of change on performance drivers and the policyholder. Add in a project champion – someone with enough weight to keep the organization focused on pushing through the challenges, uncertainties and discomfort that will inevitably come – and success will be difficult to avoid.
Track, Measure and Recalibrate
Claims routing and appraisal channel optimization are hot topics; a delicate balance, but one that can have a significant impact on CSI and expenses. We work with carriers on this dynamic frequently, and often see a lot of discussion around how to optimize available methods of inspection (MOI). One common theme for carriers looking to change MOI is how much volume should be directed to each channel – self-service, staff, drive-in, independent appraisers, direct repair programs, or a repair facility of choice option.
Adaptability, tracking, measuring and recalibration are important in this type of change. Roles will likely change for some appraisers, and adjustments to the MOI mix will certainly change based on the performance of each channel (tracked and measured closely to address the need for tweaks). Data models and performance reports are available to make this a transparent, straightforward process, but the proper mindset of continual improvement going in will be critical to success. After one implementation, we observed a carrier experience a dramatic shift to the Desk Review channel. Due to the daily tracking and measuring of volume by channel, this swing was quickly reviewed and a decision to convert field appraisers to desk appraisers was made. The result was a positive one for the organization.
A Question for You
In this era of disruption, who’s making change happen in your organization? If your company embraces change, if it integrates across the business, and if it follows a well-planned and defined process, you’re in the best shape you can be.
If not, it’s time to kick it into gear.