I recently sat on a panel about claims modernisation. The room was full of people whose job is to pay claims faster: carriers, technology vendors, a McKinsey partner moderating.
We spent 40 minutes on automation, pilots, payment speed and AI.
By the end, the thing we had all quietly agreed on was the one thing none of us had put on a slide.
The best claim is the one that never happens.
That is a strange conclusion for a claims panel, so let me be clear about what it means, because it has real consequences for anyone advising clients on group risk and protection.
Paying claims well still matters enormously. But the deeper value sits a long way upstream of the claim itself, and that is where advisers can increasingly tell good cover apart from the rest.
Here is the backdrop. The industry has never had more technology available, and yet most claims operations look more like they did five years ago than different.
McKinsey’s own numbers are blunt about why: around nine in 10 companies have launched some form of digital transformation, but on average only about a third of the expected value ever shows up.
We have spent two decades modernising the claim and barely moved the cost base. We have been modernising the wrong moment.
Claim decided before it’s filed
A claim is not really decided when it is filed. It is decided in everything that comes before it, and for most insurers there is almost nothing before it.
The average customer hears from their insurer roughly twice a year, at the sale and at the claim or renewal.
You cannot modernise a relationship that does not exist, and for most carriers there is nothing upstream to modernise in the first place.
That matters more now than it used to, because of what claims are actually made of. The conditions driving disability and income protection claims today are slow-building and shaped by how people live: musculoskeletal problems, stress, anxiety, the early signals of something larger.
Even in life insurance, heart disease sits among the leading causes, and it is shaped by years of everyday habits. These are exactly the things an insurer can influence, but only if it is close enough to someone to notice them early.
For advisers, that makes prevention a genuine risk strategy worth weighing when comparing providers, rather than a wellbeing extra bolted onto the side.
Is the customer still there?
The way the industry measures success tells the same story from another angle. We obsess over cost, speed and leakage, the metrics of the claim, and they say almost nothing about whether the customer is still there afterwards.
The real leading indicator is trust, and trust in our industry is thin.
The average net promoter score for a life insurer tends to sit around the thirties, against the seventies for the businesses people genuinely love.
When the experience disappoints, people leave: more than three-quarters of dissatisfied claimants switch or intend to, according to Accenture.
That trust is earned in the years before a claim, not in the ninety seconds after one lands.
McKinsey’s research makes the commercial case plainly.
Insurers who lead on customer experience outperform their peers on shareholder return, and the single biggest driver of experience is simply how often you are in contact with the customer.
The carrier that wins the next decade will be the one whose customer was glad they were there, long before the worst day arrived. Speed of payment alone will not get them there.
The human edge
There is a human edge to this too.
Almost everything in a claim can now be automated, but the empathy a customer feels at their worst moment depends on whether you were already part of their life before it.
Automation earns its place by clearing the friction, so that a person is free to be human exactly when it counts.
None of this is an argument against AI or against speed.
Pay the claim quickly, kindly and completely. But when the whole strategy points at the moment of the claim, the industry is polishing the end of a story it never bothered to start.
So here is the question I would leave with any adviser recommending protection or group risk to a client.
The thing that decides how a claim lands is built long before the claim is filed.
When you compare providers, it is worth asking how present a provider is in a member’s life across all the years before a claim, and weighing that alongside how fast they pay.
The best claim really is the one that never happens.
