The 30th annual RGA Disability Claim Leaders Forum highlighted two critical topics facing the industry: claim process segmentation and ethical AI integration in claims management. These emerging trends offer valuable insights for insurers seeking to enhance their risk assessment practices and operational resilience.
The list of institutions and industries changed by the COVID-19 pandemic grows longer with time.
Whether it is the ongoing decline in our children’s reading and math proficiency or the advancement of technology that pushed more of our social interactions, medical appointments, and career tasks online, many things look vastly different five years on from the initial global outbreak.
The insurance industry was an early member of that list of changed industries. Disability claims departments quickly felt the impact of the virus. Whether it was claims from those afflicted with a new and difficult to understand condition called Long COVID or increased turnover in staffing through the Great Resignation, the insurance industry was tasked with adapting to meet the challenges of this new era.
These challenges permeated the discussions at RGA’s 30th annual Disability Claim Leaders Forum. The event, held February 19-21 in Charleston, SC, welcomed professionals from the US and Canada’s top insurance companies. It annually features a series of informal discussions on industry trends.
Two of the most prominent topics at this year’s forum involved how insurers are responding to staffing challenges and how they are integrating technology that has advanced rapidly in the five years since the pandemic began.
The Great Resignation forced insurance companies to reexamine how they structure their workforce. In the wake of the reshuffling following the COVID-19 pandemic, a new trend emerged in disability claims departments. Leaders at the February conference mentioned how, rather than having a lone employee shepherd a disability claim from inception to completion, more are segmenting their departments to allow small sections of the team to focus on one part of the claims journey.
A segmented department may feature a small group of employees that focuses on the initial claim decisions, another that addresses financial calculations, and still another responsible for change in definition. This structure allows employees to work within their strongest areas and increases job satisfaction. Leaders noted this has a positive impact on turnover.
That turnover has been a growing problem in insurance companies since well before the pandemic.
Between 2011 and 2016, the total number of quits, layoffs, and discharges increased 32%, according to data from the Bureau of Labor and Statistics. There are approximately 1.56 million people currently working in the insurance industry in the US. That is 85,000 fewer than 2020. Turnover rates have jumped from 8% to 9% to 12% to 15%, led by voluntary turnover, which is rising at higher levels.
But segmentation can do more than help with staffing. It can also increase claims integrity. In a non-segmented department, one employee guiding a claim throughout the process might have different methods and definitions at varying points in the process compared to a colleague. Smaller segmented teams are more likely to be consistent at each step, resulting in more uniform processes and decisions.
Leaders at the conference agreed this is a good way for claims departments, long seen as a cost center and a drag on profitability, to make their area more efficient without adding staff.
Artificial intelligence (AI) is weaving its way into and throughout insurance companies, including the disability claims department. A Deloitte Center for Financial Services (DCFS) survey of insurance executives found that among the areas with the highest number of generative AI implementations, claims handling ranked third, behind distribution and risk management.
Leaders at the February forum expressed varying degrees of acceptance with the status of AI integration – and the direction it is heading.
The most common refrain, especially among leaders from smaller and mid-sized companies, was difficulty integrating AI solutions. The cost of in-house development or outside solutions also can be prohibitive.
In addition, some attendees expressed ethical and legal concerns with integrating AI into the claims process. The general feeling was that such integration remains a long way off because of potential lawsuits sparked by allegations of technologically driven claims decisions.
The purpose of the Disability Claim Leaders Forum is to gather and share best practices to promote innovation and overall success. A rising tide lifts all boats. Trapped in our own corporate silos, good ideas stay locked within impenetrable walls. Those our industry aims to serve are the ones who suffer.
RGA’s purpose in organizing this conference for the past three decades is to act as the moon that helps the tide rise.
To further that mission, RGA offers consultancy services to help customize solutions for each client. Whether providing a comprehensive overview of department structure, advising on claim process segmentation strategies, or providing assistance to integrate responsible, ethical AI, RGA’s role is to serve as a trusted partner.
Contact us to learn how we can partner with you to drive efficiency, growth, and increased customer satisfaction during a challenging time.
