Claims efficiency a key part in bridging Asia’s protection gap

Crawford & Company’s Andrew Bart on the role the claims management sector can play in helping narrow the protection gap.

2023 is set to be another significant year for natural catastrophe losses in Asia Pacific, with the (re)insurance industry focusing increased efforts on addressing a growing protection gap in the region.

Last year Asia Pacific experienced economic losses from natural disasters totalling $80bn, according to Aon, of which only $11bn was insured. More recently, China’s Emergency Management Ministry announced that for the first nine months of 2023, the country had experienced economic losses of 308.29 billion yuan (approximately $42bn) from multiple natural perils.

A key contributor was Typhoon Doksuri in July, which caused extensive flooding across the eastern part of the country with economic losses from the event estimated at as much as $15bn. In contrast, figures from the National Administration of Financial Regulation have put insured losses at only $1.4bn.

While insurance penetration is growing, the rate of that growth is being far outpaced by the acceleration in the impact of natural catastrophe-related events – and this gap is only likely to widen further in a rapidly shifting climatic environment.

Advancing the claims process

As the region becomes increasingly cat-prone, swift and cost-effective claims resolution will become a much more important component in enhancing the relevance of insurance and increasing affordability, in turn helping drive up overall insurance penetration.

However, the claims sector is a challenged one. Factors such as rising claims inflation, labour shortages, talent demand, supply chain disruptions and rising material costs are all significant hurdles in achieving fast, efficient and cost-effective claims resolution at a time when losses and loss complexity are increasing.

The focus must therefore be on driving efficiency at every stage in the claims cycle while maintaining highest customer service levels in this rapidly evolving loss environment. A key component of this will be the ability to adopt and integrate new technologies and capabilities into every facet of the claims ecosystem.

Intelligent claims handling

Automation, for example, is becoming an increasingly important component of claims segmentation and triage – accelerating decision-making, connecting all the stakeholders in the claims process and enabling a coordinated response within minutes of an incident developing. Connecting adjusters, insurers and policyholders much quicker and more effectively in the process will ensure a speedier response and ultimate resolution.

Single-portal claims adjusting platforms are also being used to help desk adjusters more easily route and manage alternative inspection channels and resolve property claims faster, leading to a more efficient claims process and more satisfied policyholders.

Technology is also driving efficiency in terms of site inspections. Drones, for example, allow adjusters to access dangerous or inaccessible locations faster than before, enabling them to quickly assess damage and potentially mitigate costs.

Further, the industry is embracing alternative approaches to enhance loss assessment processes while reducing the strain on adjusting resources, including the application of remote site inspections using video and 3D modelling tools, offering apps that enable self-service for policyholders, and capitalising on on-demand inspection services to speed up data collection capabilities post loss.

The claims management sector has a central role to play in helping reduce the protection gap. However, to fulfil this function effectively, it must continue to reimagine every component of the claims ecosystem through integrating intelligent solutions to transform how claims and risk are managed.

Andrew Bart is CEO, international operations at Crawford & Company