On March 21st, 2024, London hosted Europe's largest Insurtech conference, Insurtech Insights, where Clearspeed’s CEO Alex Martin highlighted the opportunity to evolve current industry approaches by accelerating risk assessment through voice technology, aiming to quickly identify genuine customers to fast track and filter out bad actors.
The session also featured a thought-provoking discussion with two committed and dedicated industry leaders, Ben Fletcher, Director of Financial Crime at LV= General Insurance (Allianz), and Scott Clayton, Head of Claims Fraud at Zurich.
One of the biggest challenges Clayton sees for the industry is balancing speed with accuracy in customer fulfillment. He notes that quicker decision-making does not always equate to precision. Additionally, he points out that technology is often seen as a cure-all for most issues, though it is not the right fit for every problem.
Clayton remarks, “Insurance was all about filling in a claim form and ensuring the company would give back to you. Nowadays, it's how do we make that process far quicker, slicker, better for the customer... The biggest challenge for us is how do we embed our fraud controls and systems in that very fast-paced environment.”
Evolving fraud, customer expectations, and rapid industry changes
Fletcher points out that customer expectations are increasing especially in the wake of the COVID-19 pandemic. He observes, “I think pre-COVID, people would benchmark experiences; they'd benchmark insurers against other insurers, banks against other banks. I think when we are all at home for so long, all of a sudden we start to benchmark our customer expectation against Amazon, against DPD, whatever the best customer experience is. I think that is a positive for us as an industry because I think that means that we have to change because customer expectations have changed so much.”
Fletcher also discusses the growing complexity of fraud as fraudsters become more sophisticated and share information on a broader scale. Clayton agrees, noting, “It's in customers interest that we prevent fraud because that drives the claims ratio down and the premiums down, so they buy into our story. If we say that we are deploying certain technology or investment in fraud techniques and people, then that's a great message for us because we're, in effect, protecting their money.” Fundamentally, the message is clear: protecting assets while reducing fraud can ensure economic and operational success.
Martin poses the question of how these two leaders are thinking about the evolution of their industries now that things move at such a rapid pace. Fletcher advocates for a shift from process-driven to outcome-driven strategies. For large companies and authorities, the shift is crucial, as effective prevention can contribute to driving down premiums and safeguarding other financial metrics. This change requires leaders to adapt how they manage and make decisions, especially when it comes to accurately and quickly handling trustworthy customers.
Fraud as a critical agenda item
Clayton agrees with Fletcher's observations but also adds that passing new customers through a fraud filter is essential. He adds to this analogy by noting the importance of integrating various layers into the filter including data analytics, metadata analysis, and voice technology. These layers provide a framework for insurance companies and give them reassurance about the people with which they are dealing.
From Fletcher’s fraud perspective, an organization has to think of fraud at the forefront of the business. There is a paradigm shift in how companies should approach fraud - rather than thinking of it as a problem to be fixed, he argues that it should be treated as a critical agenda item at the board level along with regulations playing a key combatting role. This perspective shows a broader trend towards leveraging technology to enhance efficiency, moving away from manual processes.
Leadership and strategic approaches to fraud
From a leadership perspective, the challenges of today require a forward-thinking approach. Fletcher’s advice is to remain curious and thoroughly understand the landscape. Each organization is going to have a unique appetite for risk and understanding. This, along with understanding the different behaviors of fraud, is crucial. The question he asks is: “How do you build a defense framework that is agile and can adapt quickly?” Foundational technologies such as voice analytics and language models can provide the answers to this problem.
Fletcher notes, “When we started looking at things like voice analytics, I'm not going to say we were skeptical, but I think we went into it open-minded thinking, ‘how much of an uplift is this going to give us, bearing in mind the layers that we've already built?’ But the reality is there is another incremental benefit there, so what works today is not going to work tomorrow. Be curious and carry on evolving.”
Clayton outlines the importance of a strategic approach to fraud prevention. Just as one might heavily invest in mining for gold, working with the best providers can enhance fraud filters incrementally. Effective fraud detection should move the dial as he says, avoiding the pitfalls of having too many eyes on the same problems. With that, companies should use a product that moves the needle and does something different than traditional strategies. From a provider standpoint, this approach allows investments to lead to meaningful improvements.
The insights from Insurtech London demonstrate the industry’s ongoing level of transformation. Martin concludes by emphasizing the importance of teamwork and leadership in moving people from being compliant to being interested and committed. With leaders like these three innovators at the forefront, the insurance industry is positioned to embrace new technologies, driven by speed and accuracy, and ultimately anchored in bettering the customer experience.
Watch the full session here
