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The claims journey should be a hero journey bringing together supportive human interaction with technology interventions to smooth the process, says Scott Cadger, head of claims and underwriting strategy at Scottish Widows.
In this Q&A he explains how the insurer is developing and investing to speed up and smooth the claims process, the future use of artificial intelligence and how to reduce declined claims.
Why is it so important for Scottish Widows and the wider protection industry to publish its claims paid data?
Claim statistics are incredibly important because it helps give that foundation and trust in our industry.
Across UK insurance propositions, protection is probably the highest paying area, so it’s always great to see both our numbers, but the wider industry continuing to pay such high levels. For us, being able to serve over 11,000 families last year is the foundation of all we do within our business.
Scottish Widows paid more than £243m in protection claims in 2023, an increase of 22% from 2022, to more than 11,000 customers and their families. What were the key reasons behind that growth?
We’ve had a few years of our Scottish Widows Protect intermediary proposition in the market and so we are starting to see the claims coming through.
We’re also seeing people holding on to their policies, which is great for customers to be seeing the value of their cover, and because of the improving persistency we are seeing more claims.
The one additional feature is unfortunately we saw more of our older population passing away last year meaning higher claims during 2023 than we were expecting to see, but we are seeing that normalise in 2024.
What are the other highlights from Scottish Widows’ claims statistics?
We’ve seen a 62% increase in our GP service usage, and while it is primarily the policyholder, there is a growing proportion of other adults and children also utilising that service because it expands to the whole family.
We’ve also seen a 184% increase in the use of our Scottish Widows Care service offering support and counselling which are really big things for us.
We agreed a further five-year partnership with McMillan Cancer Support and through that partnership, more than 800 customers were referred, where they’ve then made further savings of around £300,000 by helping people get the right benefits and knowing how to get through the systems.
These services bring a tangibility to our products, they become an important feature of how we continue to engage our customers and show product value.
Claims and underwriting is evolving at a rapid pace. What has Scottish Widows been doing to enhance customer claims experiences?
One of the areas getting sharper focus is how long it takes to pay a claim and that is a challenge because a large amount of the process is driven outside of insurers.
Medical information can vary in return time and it’s not uncommon for medical reports to be 300 pages long.
This is where we are looking at new, emerging technologies to help with digesting of information, so claims assessors can get to decisioning faster.
We’ve also put a lot of investment in our bereaved claimants’ site and we’re now seeing about 74% of these paid within 14 days and about 69% within seven days.
Part of that is through using registers to identify the death so we’re not relying on the bereaved family to supply death certificates.
Trusts are incredibly important, particularly for higher sums assured. We’re engaging with customers – for example to add an additional trustee to ensure the trust remains valid if the spouse has passed away.
In the last year we have introduced a trust panel to understand and gather evidence to ensure we are paying out to the appropriate beneficiaries as the trust is intended to.
And we are looking at nominated beneficiary – to understand how it would work and make sure we’re capturing and storing data in the right place with the aim of introducing it at the end of the year.
How do you see technology and AI playing a part in the future of claims?
We want the claims journey to be a hero journey doing all the right things at the right times, and that we augment the brilliant human interactions we have with all the right technologies which help to speed it up – that’s a big focus for us over the next 12 to 24 months.
Most claim notifications come by phone, but 20% to 30% of bereaved claims come digitally and there’s more we can do around document uploads, being able to track a case and pay it quickly.
In the critical illness space with a range of possible claims, starting through that journey some people perhaps need a little help to understand if the condition meets the policy and so there’s work ongoing to see how we enhance the digital capability of that information stage.
For medical information reports, how do we consume that? Where is there an opportunity for technology to read those 300 pages of reports and produce summaries so claims assessors can focus on doing what they do.
Across the industry there is a clear narrative around the desire to honour claims. What more can be done to educate advisers and reduce declined claims?
Declined claims are few but the two main reasons we see are for misrepresentation or for the illness not meeting the definition of cover.
Most misrepresentation is around cancer which tends to be when people have got early symptoms, have not disclosed that at point of sale and then an early claim arises.
A lot of work is being done to ensure those application questions are really clear and we work with advisers to help and educate them on how to approach those questions and to give customers space to answer them.
Not meeting the definition tends to be around heart attacks.
The industry has always had a heart attack severity level and people are coming forward with conditions where it’s been low level or they believe it’s a heart attack or it’s been angina.
It’s the nuances of critical illness cover as a severity-based product – it is an incredibly valuable level of cover for people to be able to access and so there is that constant balance when designing products and looking at this clarity around severity.