A visual language for claims; how innovation is changing the picture

Authored by Corinne Southarewsky, Chief Claims and Distribution Officer, APAC & Europe at AXA XL, and Dominique Brossais, CEO of leading loss adjusting firm Naudet

Innovation can take multiple forms in the insurance industry. Indeed, for AXA XL, innovation in the way claims are assessed is enabling us to help our clients achieve better and swifter settlements and minimise the impact of losses on their business. Corinne Southarewsky, Chief Claims and Distribution Officer, APAC & Europe at AXA XL, and Dominique Brossais, CEO of leading loss adjusting firm Naudet, illustrate how new technologies are giving claims a visual language that can make settlement faster and more effective for all parties involved.

Paying claims is at the very heart of what insurance does. We give our customers a promise to pay, and when things go wrong our role is to support them in recovering from a loss. A company like AXA XL manages complex claims related to the complex risks she is covering for its corporate clients. Managing claims in AXA XL frequently requires interacting with several parties from different companies, different countries, different cultures and different mother tongues.

This is particularly true in the case of claims made on global programs, where a Master Policy may interact with a Local Policy. This can mean that the process is subject to different legal systems and regulations. When our teams are examining these claims, lawyers, loss adjusters and other experts need to engage in discussions– and everyone needs to be able to clearly understand each other.

It is often the case that the complexity of a problem, coupled with these cross-border cultural and linguistic challenges, can blur communication. Technology, however, can provide us with some common ground – and a visual, universal ‘language’ that we can all understand. This visual information not only enables us to better understand losses, it also helps us to communicate better with stakeholders throughout the claims journey – including the end client.

A host of new and developing technologies are making this visual claims-communication simpler, including; drones to provide close-up images where access is difficult or impossible; satellite imagery to show details of a site both before and after an event at a large scale; 3D drawings and simulations that can allow to visualize machinery or reproduce phenomena such as explosions; finite element calculations that can reproduce stress in certain parts of equipment, for example; and the use of databases to collect and mine relevant external and internal information.

How innovation is transforming claim settlements

AXA XL makes use of these innovative techniques to help resolve some of the most challenging and technical claims that our clients face.

For example, a client that operates a plant that receives and ships chemical products by barge suffered damage when the steel structure of a loading dock was hit by a ship. The loading dock was critical to load product and ship chemical products to its customers on the river 24 hours a day, 7 days a week, all year round; as a result the loss was having a multi-million impact on our insured’s financial results and it was critical for them to repair this damage and manage business interruption as soon as possible. This was a complex and technical claim for several reasons, among them the uncertainties on the circumstances of the loss and the fact that the client submitted a claim both for a full repair of the damage and a temporary repair of the damaged dock.

We used 3D modelling and finite element calculations to model the extent of the damage to the dock and arrive on a settlement for the claim. The increased accuracy of the quantum of the claim that we were able to calculate using these innovative techniques was beneficial to all parties involved, as it allowed to reach a fast agreement on the level of settlement and minimise the impact of the claim.

When dealing with claims arising from large-scale events, satellite imagery is proving an incredibly useful tool too. Naudet has been using satellite technology, in conjunction with other data sources, to help achieve swift and fair claims settlements for insureds. For example, when Hurricane Irma hit to Caribbean Islands in September 2017, satellite imagery enabled insurers to model the extent of likely losses and set a claims reserve even before receiving any reports of damage. A comparison of satellite imagery from both before and after the category 5 hurricane wreaked widespread damage allowed to set a reserve in fewer than 10 days, which was confirmed as extremely accurate six months after the event.

Another example of how satellite imagery can help to assess claims from large-scale events is the case of one client involved in a dam collapse which led to flooding in Asia. Setting a liability claims reserve was, in this instance, urgent given the nature of the event. Analysis of satellite imagery combined with population density information from the United Nations’ database enabled us to set a reserve within two weeks – an exceptional level of speed in such circumstances.

And this does not apply only to catastrophe-type claims: In the case of a fraudulent claim in a port, analysis of historic satellite imagery enabled us to identify when stock movements had taken place within the warranty period and when they had not, allowing to confirm our fraud suspicions.

This geospatial imagery technology has also been used by the insurance market when examining marine claims stemming from the conflict in Ukraine with Russia, for example related to vessels stuck in Ukrainian ports.

AXA XL is building capabilities to use geospatial imagery in conjunction with internal and external data. Internal data includes exposure information and flood models, for example. External data can include weather information and location specifics. The use of geospatial imagery to look at an insured’s site both before and after an event helps us to build a more accurate picture of a claim – particularly where access is difficult, for instance in the case of floods.

Looking ahead; the future of claims

The use of innovation is enabling AXA XL to move to a more proactive approach to claims. It means that for large-scale events and a number of complex claims, we are less reliant on waiting for information from our clients and brokers to start managing a claim. Instead, when a natural catastrophe occurs for example, we can be on the front foot – enabling clients to take mitigation actions and supporting them shortly after when a loss takes place.

Innovation helps our teams of claims specialists to unlock the power of modern tools to the benefit of our clients. New technology is often cost effective, time efficient, factual and persuasive, and its benefits can be demonstrated in a vast number of claims types. When our clients are in uncertain situations after an adverse event happens, the length of time it takes from the moment a loss happens to the closure and payment of the claim is of critical importance. Being able to get a clearer picture on claims within days of an event will, we believe, help our clients not only to take steps that will minimise their losses but also to have greater certainty as they recover from an event.

Technology continues to evolve, and innovation is gathering pace. We may soon see also the use of robots to help examine claims in areas that would be too dangerous for humans to reach, due to toxic gases or damaged roofs for example, allowing to save precious time in the claims process. This is an exciting time for our claims function and our clients alike. As we seek not only to pay claims but to enable our clients to operate as efficiently as possible in today’s evolving and uncertain risk context, innovative technology will serve to help us meet this goal.