All insurtechs have something in common: they promise to improve the customer experience over traditional players.

And yet I’m surprised to see that many of them have decided to focus more on the tech and building a great digital customer acquisition experience without investing in customer lifecycle management (aka customer care) – and even less in claims management.

In fact, too many of them have simply outsourced these processes – particularly putting claims management in the hands of traditional third-party administrators (TPAs) or even the insurer that is carrying the risk on its balance sheet.

So in the end, insurtechs say that they're improving the customer experience, but in practice they’re doing the opposite.

Insourcing vs. outsourcing insurance claims management

From a strategic perspective, I understand that the focus of any new player is on acquiring customers. After all, a company that doesn’t sell any insurance contracts doesn’t have any claims to manage, so it makes sense to focus on acquisition first.

At Qover, we decided to insource the full customer care experience from day one, and to sub-delegate claims management to TPAs or the insurer itself. We could outsource claims, while the risk carrier still allowed us to control the quality of the process and to step in when needed. Rather than pure outsourcing, it involved supervising and controlling the claims process.

In hindsight, it was the right call in our early days; but when we began to reach critical mass in terms of claims, we realised it was time to switch our approach because:

• SLAs were below our expectations.

• TPAs & risk carriers don’t have the same digital DNA as insurtechs in terms of customer service and satisfaction.

• Claims are the moment of truth in insurance. This is where you can really show customers that you’re delivering on your promise and building a better world (or not).

• We received poor quality of data from TPAs or risk carriers.

• And perhaps the most important reason: by not being on the front lines with our customers, we were missing the feedback loop at the moment of truth – which is critical to improving our products, processes and partnerships.

As a consequence, we decided to insource 100% of claims. By the time we completed the transition, we brought down the average time it took to manage claims from three months through a TPA to less than a month in house.

We've greatly improved the process since then – leading to 24-hour claim processing in some cases – and are now introducing even more automation and AI. 

Quicker claims service, greater customer satisfaction

A recent Accenture survey found that the longer it takes for a claim to be settled, the less satisfied customers are. That being said, faster claims handling doesn’t mean skimping on quality. 

This is where AI can be truly transformative in offering customers quicker responses while maintaining or even improving accuracy.

So even after you've insourced claims, it's involves continuous optimisation and improvement by investing in  customer support and claims departments as well as AI tools; harnessing the right tech; sending regular satisfaction surveys; and monitoring reviews on Google and Trustpilot.

I believe that with the right approach, all insurtechs are capable of insourcing claims in order to provide a top-notch customer experience.