Claims management key to insurance profitability – KPMG

Traditional claims functions must now evolve to incorporate advanced technologies.

Claims management is an underutilised strategic asset in many insurance organisations. To realise its full potential, the claims function requires a transformation that integrates technology, aligns with other business functions, and focuses on enhancing the customer experience, said KPMG in an insight. 

This transformation is critical for driving profitability, operational efficiency, and customer satisfaction.

Claims management significantly impacts an insurance company’s balance sheet and customer experience. 

A well-handled claims process can enhance customer loyalty and attract new clients, whilst poor claims handling can damage the company's reputation and hinder growth. 

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Traditional claims functions, built on technical expertise, must now evolve to incorporate advanced technologies like artificial intelligence (AI) to streamline operations and deliver strategic value.

Drivers of Claims Transformation

1. Modern customers demand efficient, transparent, and fair claims processes. Meeting these expectations is essential for customer retention and acquisition.
2. AI, machine learning, and automation offer opportunities to improve claims processing speed, accuracy, and cost-efficiency.
3. As the insurance market becomes more competitive, companies must leverage their claims function to differentiate themselves.
4. Compliance with evolving regulations necessitates updates to claims handling processes and technologies.

KPMG tallied five considerations for modernising the claims function: create the foundations, focus on the data, update the processes, change the ways of working and capabilities, and make sure the transformation sticks.