Shaped by AI: Transforming Claims Processes

0:06 Evening everybody.

0:08 It's an absolute pleasure to join you today at QuanCon.

0:11 So by way of introduction, my name is James Nicholson, I'm the Chief Claims Officer and I'm looking forward to just sharing a little bit more about our data and AI journey.

0:22 I want to start with a confession.

0:23 I'm a little bit like James's mum in this respect, OK?

0:27 I am not an AI or data guru, so that's not my bag as such, and I feel quite uncomfortable admitting to that in a room full of individuals with a far, far deeper understanding of these topics than I do.

0:41 But like many leaders today, we're all trying to navigate our own journeys to comprehend the implications of data and AI and IT.

0:50 And it's not just leaders from an industry's perspective.

0:53 I had the pleasure of attending my 16-year old's parents evening this week.

1:00 He is in the middle of doing his GCS ES.

1:03 You would hope that he would be doing an awful lot of revision, but frustratingly, he's not the most diligent student and his revision prep is absolutely woeful.

1:13 Right.

1:14 Amazingly, in a parent's evening, the teacher turned to us and said, look, don't worry about it, just use ChatGPT for all revision notes.

1:24 I, I mean, you know, I was sort of flabbergasted by that.

1:27 And maybe the only way that I can actually understand whether that is an advancement or not is when it comes to August the 26th and we get as results.

1:36 So, so look, I, I've spent almost 30 years in the, in the insurance industry and I often reflect on the systems I work with at the beginning of my career.

1:47 I, I wanted to talk to you very much today about just sort of taking you through a little bit of our journey, not going back too far, but through to 22 and then up to present day.

1:57 And then what does the future look like?

2:00 But when I think about when I, when I was working in claims, the systems that we had at that time going back into the 90s looked like this.

2:11 And, and that's not, you know, that's not like back in the 90s.

2:14 That's not in the, that was three years ago.

2:17 OK, So, so, so now my teams are working with systems that are far more advanced and sophisticated, like the one that you see here.

2:26 I'll leave it up to you to decide as to, you know, if you're a claims handler, if you're comfortable working on that for 8 hours a day or that.

2:36 But what I want to highlight today is that every aspect of our world is evolving, becoming more interconnected than ever and changing at an unprecedented pace.

2:46 This transformation is not just a trend; it's a fundamental shift in how we operate and engage with our customers.

2:54 Thankfully, both from our customers perspective and for Zurich, we only have a very small percentage of customers that will ever have a claim.

3:03 However, we within Zurich insurance touch and it'll be the same for RSA and others.

3:09 But we, we, we have an engagement with customers every six seconds.

3:13 So it's our job to make sure that we deliver against our promises and that's why it's absolutely crucial for us to adapt continuously to fulfil the evolving needs of our customers.

3:24 Now, the World Economic Forum has been referenced a couple of times this evening and Dario Amadei, CEO of Anthropic stated we are entering an era where we're developing systems that may surpass our own intelligence.

3:37 He noted we can witness 50 to 100 years of advancement within the next 5 to 10 years, right?

3:44 These statements resonate deeply with me as an insurance leader and no doubt with a number of you in this room.

3:51 And his statements trigger a mix of emotions, right?

3:55 Is it excitement, is it nervousness or is it a mix of the two?

4:00 But it's, it's our ability to embrace that our natural feeling is that we are nervous around it.

4:14 But if we if we look at it in a way where technology and recognising that we have such a demographic of individuals across our claims function and within our organization, that nervousness becomes excitement.

4:28 And then you combine the two.

4:31 So, well, while I might not be a specialist in data and AII do have a really strong understanding of Zurich's strategy and our people.

4:38 And this enables me to give a relatively unique, but actually it's not relative.

4:43 I hate when someone says it's quite unique.

4:45 It's either unique or it's not right.

4:47 So it gives me the unique perspective of this of, of in my position of being able to share with you what we're going to see within the insurance sector.

4:59 So let me just take you through the journey that we've had within claims for the, for the last few years.

5:04 I'm only going to take you back three years to 2022 to help orientate yourselves.

5:10 That was a year filled with significant events, right?

5:13 Elon Musk bought Twitter, Will Smith slapped Chris Rock at the Oscars, and significantly Open AI launched ChatGPT as a prototype in 2022.

5:26 Our claim systems landscape, much like many other insurers, was quite intricate, largely comprised of legacy systems.

5:35 We faced challenges with disjointed data practices.

5:38 A lot of our data was on premise.

5:40 To add to that, our claims function only had 1% of our overall population focused on data and analytics.

5:48 This was a real reality check for us because we knew that we needed to change, we just didn't necessarily know how to change.

5:57 But acknowledging these challenges, along with the growing importance of data and AI and our data operations and organisations, we took a series of actions.

6:05 The first was around our people.

6:08 Within Zurich, UK we have approximately 750 people dealing with claims.

6:13 We only had 7 individuals dedicated to data and insights.

6:18 Recognising this gap, we made the decision to provide our claims handlers and managers the opportunity to be re skilled.

6:26 We gave them knowledge, we gave them tools and we gave them time to focus on developing the required skill set.

6:35 One of the key reasons we did this and undertook this initiative, alongside ensuring we had a workforce fit for the future, was to make tangible progress against our data and IAI strategy.

6:48 Specifically, we aim to create a centralised data set that would enable the delivery of valuable insights across our global business.

6:57 To many of you, this may very much seem like, well that's basic, that's straightforward, but the complexity of our infrastructure presented significant challenges, and I'll come back to this point later.

7:09 When it comes to our data and AI strategy during 2022, we also sought to explore some of the new tools available in the market and partner with an AI start up to assist us in making faster and more accurate claims decisions for a personal lines portfolio.

7:27 We opted to outsource these capabilities because we lacked the necessary skills in house to develop such a tool, recognize we just started to really build these skills into our operation.

7:40 However, given the complexity of our system landscape and evolving direction of the business, we didn't really realise those benefits and it just proved too difficult.

7:50 You've heard quite from a number of people, and this really sort of round it home to me that real need of partnership and understanding the capabilities of either our own in-house capabilities or the partners that we partner with, what are their capabilities.

8:07 So and that goes to the trust element.

8:09 What we did in 2022 was we simply adopted a new tool and tried to implement and when it failed, which inevitably it failed, not because of the failing of our partner that we went with.

8:23 Actually we didn't set the strategy right from the very get go.

8:28 So I believe it's absolutely crucial for us to ensure that we effectively align our AI initiatives with our customer base as well as our overall business and data strategy.

8:40 This alignment is absolutely essential for us to harness the full potential of what AI and data can give us.

8:47 It enables us to better serve our customers and actually it enables us to drive our business forwards.

8:54 It's also imperative that we build those partnerships.

8:59 So what does the now look like in UK claims today?

9:04 Our vision is clear; right is to integrate the best of digital and human capabilities to achieve positive customer outcomes in this ever-evolving landscape.

9:16 We emphasize the importance of striking the right balance between AI and then human involvement and Vish talked about it so eloquently before.

9:25 It is this balance that will allow us to serve our customers effectively while leveraging the benefits of technology.

9:34 I'm proud to share that the people that we upskilled on data and AI have made leaps and bounds.

9:40 Today, they're just shy of 35.

9:43 That doesn't sound like a lot, but we've gone from 7:00 to 35.

9:49 These were handlers and team managers supporting us day in, day out, working diligently to reduce manual processing and deliver valuable insights to the business.

9:58 These individuals who once focused primarily on answering calls and adjusting a loss and now evolving into experts in their own respective fields.

10:08 Their dedication to learning and adapting is testament to our commitment to growth and innovation.

10:16 In regard to our data and AI strategy, we're making significant progress towards consolidating all our claims data into a single source system.

10:26 This advancement isn't just a technical achievement.

10:29 What it does is it allows us, enables us to leverage cloud computing, making our data more accessible than ever before.

10:37 We've gone from a whole myriad of systems to 1 system now.

10:45 That's not overnight.

10:46 We will still have to carry the legacy for a period of time, but we will have one version of the truth.

10:54 So to harness the vast potential of that cloud computing, we are utilising powerful tools like Data ICU and Snowflake.

11:01 These platforms are instrumental in helping us maximise our data capabilities and Dr.

11:06 efficiency within our operations.

11:10 By leveraging these technologies, we're not only enhancing our processes, but we're also positioning ourselves better to meet the needs of our customers.

11:20 So what I, what, what have we learnt from partnership and the partnership that we have with Quantexa?

11:26 It's fair to say.

11:27 And, and, and Scott Clayton, who's in the room and, and my fraud team have been absolutely instrumental in terms of building that partnership.

11:37 And I heard something today from a colleague who, who was with Quantexa yesterday and she's so worried about it.

11:43 She said, I spoke to them, and they said if you can I, if you've got the imagination, we can do it.

11:51 Now that's I mean, it's bullish.

11:53 It's sort of bullish, but it's the truth.

11:55 The conversations divide.

11:57 The energy that's coming from Quantexa in the relationship that we have as Zurich is really quite, well,

12:05 It's fabulous, wicked, actually, it's wicked.

12:08 And I think that's a very apt phrase.

12:10 But for us, it's just this kick off, right.

12:14 We focused it in fraud because that's where it sits for us as it currently stands.

12:19 But the opportunity is that much greater and the opportunity for us to be able to partner with somebody who will deliver and undoubtedly will deliver.

12:29 It allows us to have that scalability across our entire organization, not just from a claim’s perspective, I hasten to add, but at that buying stage, at that pre buying stage right across our organization.

12:43 But as you say, Apple didn't put Nokia out of business.

12:45 They put themselves out by not evolving.

12:48 And this has to serve as a reminder that stagnation is not an option in today's fast-paced environment.

12:55 We must remain agile, ready to embrace change, and committee to finding new ways to improve and innovate.

13:02 So what does the future hold?

13:06 We've had a really good journey so far.

13:08 We've saved over 35,000 hours through automation of our manual processes, allowing our handlers to spend more time focused on value-add activity for our customers.

13:20 This also means that we have 30 digital workers, as you may call them robots, working alongside our employees doing this manual activity.

13:28 We've also grown our data team by over 200%.

13:32 It's enabling us to continue to deliver first class insight to our business.

13:39 But let me be clear, this is only the beginning.

13:42 We have laid a solid foundation, yet the most transformative changes are just around the corner.

13:49 Dario recently emphasised that critical window for our evolution as 26 and 27.

13:55 I'll pause there because 26 and 27 isn't like miles away, is it?

14:00 I mean, it's months.

14:01 We're already making plans for what 2728 looks like from a business perspective.

14:10 The world is changing at an unprecedented pace, and we must be prepared to adapt and seize the opportunities that arise.

14:17 And to illustrate this point, I just wanted to talk to you about the concept of the Lily pad.

14:22 So bear with me.

14:22 But there's no need to close your eyes for this.

14:25 But imagine a serene pond where 1 Lily pad double S overnight.

14:32 It takes just 30 days for that single Lily pad to cover the entire pond.

14:37 1 Lily emerges on day one, doubling every day and completely covering the pond by the 30th day.

14:45 On the 29th day, its only half covered, meaning that on the final day the entire pond is filled.

14:55 This analogy for me perfectly captures the rapidity of change that we are experiencing today.

15:01 As a critical window narrows, we will continue to be astonished by how quickly things evolve around us.

15:09 And as we navigate this landscape, I want to take a moment just to acknowledge our people and the importance of our people in that.

15:15 The success or failure of our work lies not in our hands.

15:19 You know, not as not in my hands as a leader within Zurich, but in the hands of the next generations.

15:26 As a leader, I have the privilege of guiding a workforce that spans 4 generations, but our Gen.

15:32 Z employees in particular have grown up in a world saturated a bit like my son.

15:38 That's possibly why his revision's not going so well with technology.

15:42 With an iPad in their hands from a young age, they're more connected and informed than any generation we've ever seen before.

15:50 And this presents us with a crucial responsibility.

15:53 We must ensure our workforce evolves to meet not only the changing needs of our customers, but also their diverse expectations of our employees.

16:03 So if I look at what's in store for our data and AI strategy, our focus is shifting from the manual collation and analysis of data to delivering real value for the information we have now hosted, as I said, in a centralised location.

16:17 For us, this is a significant step forward.

16:20 It allows us to interrogate data, harness insights and Dr.

16:24 decisions that will propel us into the future.

16:28 Big consideration, it was referenced in the in in the fireside panel is how do we build a sustainable operating model and process using AI without truly understanding what the direction of the regulation will be.

16:46 Where do you place your chips around that?

16:49 And finally, we're faced with a key decision that will shape our organization both now and, in the years, to come.

16:56 Where do we deploy and invest in our internal expertise on where should we leverage external suppliers to bring in additional capabilities?

17:06 I'd pause there and just reflect on that comment because we have done the dance right and that's possibly not the right expression, but we have done the dance with vendors.

17:17 And if I if, if you wanted you, you know, it's, it's, it's, it's like a snake oil salesman, excuse me, but there can be that when you go to conferences.

17:27 I do feel really confident in the relationship that we have built with Quantexa on what that gives us as an insurer.

17:36 And I'm delighted to be in a position where I feel that we are leading the market in that respect.

17:44 Sorry, Adele.

17:46 Before I finish up, I want to share a couple of key takeaways that I hope will support you and your data and AI journey.

17:56 There is absolutely no doubt there is a need for us to evolve and adapt and continue to meet the needs of our customers and people.

18:04 But we do need to be alive to risk and an easy trap for carriers to fall into is trying to jump in at too high a level when it comes to AI without getting the fundamentals right, which is why having a really clear vision is so important.

18:19 And for me and in turn Zurich, that's about being really clear that AI is not here to replace what it's customer delivery proposition should look like, but rather to enable and to enhance that customer proposition.

18:35 And finally, in line with the Lily pad effect, we aren't talking about change that is going to happen in the next 5 years.

18:42 We have to ask ourselves a question.

18:44 Are you going to be a leader or are you going to be a follower?

18:48 Are you going to drive change or are you going to be driven by it?

18:53 So thank you very much.