The Future of P&C Insurance in Canada: Part 3 – Claims

As we continue our series, The Future of P&C insurance in Canada, we‘ve covered distribution and servicing in part 1 and underwriting and pricing in part 2. In the third part of our series, we focus on how the insurance claims journey is evolving and how innovation and new technologies can help create winning customer experiences that are more efficient and help limit both claims frequency and severity.


Female Motorist Involved In Car Accident Calling Insurance Company to Make an Insurance ClaimThe insurance claims experience is the single biggest opportunity insurers have to create that ‘moment of truth’ with their customers. A positive experience can build unmatched customer loyalty. Even brokers are generally happy to relinquish the claims process to carriers; it is the most significant opportunity that insurers have to show how customer-centric they are. Furthermore, customer expectations for the overall claims experience are rising, fueled by precedents set by retailers and banks, requiring a seamless omnichannel claims experience across all touchpoints.

Providing an exceptional experience has traditionally been in tension with managing insurance claims expenses from an indemnity and productivity perspective. Several factors drive these ever-increasing claims costs, ranging from the complexity of repairing modern automobiles to climate change to provincial legal and regulatory frameworks to fraud. The result is upward pressure on premiums and dissatisfaction amongst consumers, as insurers try to get these costs under control. However, insurers are taking measures to fight this external momentum so they can counter this trend. Of course, there is no straightforward fix, given the upward pressure. Still, several initiatives are moving the needle in a positive direction.


The most cost-effective way to reduce claim expenses is to stop claims from occurring altogether. Take the example of telematics and User-Based Insurance (UBI), which have been in existence for several years, and their impact on auto insurance premiums. Providing a financial incentive to drivers to either choose a different means of transportation to limit auto use or to drive more safely matches the risk to the way a customer uses their vehicle. Thus, UBI incentivizes less risky (i.e., more cost-effective) customer behaviour. As a result, fewer auto insurance claims will be filed.

In the home and property space, insurers can push notifications to customers to prepare against weather events using hyper-localized weather data sources so that customers can take measures against ensuing damage. By using data and technology intelligently, insurers can impact customer behaviour in ways that they haven’t been able to do before the digital revolution.

Decision-making and turnaround time

One of the biggest enablers of efficiency is insurers’ ability to dramatically increase the speed from First Notice of Loss (FNOL) to payment. New technologies are being used for customers to photograph car damage and submit a claim electronically to an insurer. New data sources can validate the claim, make faster decisions about claims severity and immediately issue virtual payments. For example, in some cases, an assessment of a totalled car that used to take weeks can be done in mere hours or minutes through integration with auto-body shops.

Automation has a significant role to play as well. For example, ingesting forms and invoices in all kinds of formats and from many sources can take up a lot of time. Overlaying AI-based OCR (such as SortSpoke) and text analytics on top of traditional RPA makes the FNOL process much faster, enabling adjusters to focus on activities where human judgment is required.

Streamlining workflows with data sources and technology hits all of the key drivers of an optimal claims experience. The results are:

  • Reduced turnaround time from the moment of FNOL to claims resolution to close claims faster
  • Reduced cost by providing what’s required and not spending costs extraneously Grateful customers, who had an easy and empathetic claims experience in their moment of need


The insurers of the future must offer an omnichannel experience where live adjusters, websites, mobile apps and even text messages (SMS) are all on the same page, enabling customers to choose how they interact with an insurer in support of a claim. Many insurers offer this to varying degrees, but creating that seamless experience across channels will become are rapidly becoming table stakes.

Provider management

Preferred providers are nothing new, but proactive management of relationships with vendors is fundamental to managing the overall claims experience. Using analytics to baseline and measure vendors’ performance to drive selection to preferred provider networks can create positive outcomes for claimants and manage costs effectively. In addition, as insurers become more sophisticated with managing their own data sets and supplementing with external sources, it will enable claims organizations to be more proactive in managing their networks and providing the right cues for customers to achieve this end.


Several factors drive litigation, and the provincial regulatory model (tort vs. no-fault) is undoubtedly a contributor. Reducing the need for litigation is in both the claimant’s and insurer’s best interest.  A simplified claims process that doesn’t rely on litigation speeds up a positive outcome for the consumer and lowers the cost for the insurer – win-win.  Complicated insurance products contribute to the need for litigation, particularly as claimants want to receive all they are entitled to. However, insurers want to cap costs and better manage indemnity.  Changing the paradigm to care-based models will ensure that any injured parties are afforded the ability to recover as quickly as possible while limiting the need for dueling assessments and costly litigation in the worst-case scenarios. A lack of trust between parties is a significant contributor to increasing litigation costs, but taking a case-based approach to claims is achievable when both parties align on achieving positive outcomes for the claimant.  Moreover, insurers don’t have to wait for regulators to change how auto insurance administered provincially. Proactive case management can have a profound impact on claim costs when implemented correctly and supported by medical professionals.


As discussed in our previous article on underwriting and pricing, the dawn of data-centric insurers is upon us. One of the advantages of taking an analytics-based approach to reserving is the flexibility and nimbleness of insurers to ingest and apply historical and forward-looking data into predictive models. In doing so, insurers can optimize their reserving levels on a much more frequent basis (even approaching real-time), which will free up capital for better use and improve the profitability of the insurer as a whole.

The integrated insurer

It is easy for insurers to fall into the trap of segregating lines of business, from support functions to insurance claims. Frequently these internal structures have been set up independently on different technology platforms, which creates natural impediments for collaboration. By moving towards a more integrated model with supporting data architecture, information can be shared quickly across the business. In addition, independent insight can be shared, whereby disparate business areas and functions can benefit from each other’s data. Examples of this include:

  • Using claims data as part of the analysis for closing risk loopholes and developing new products
  • Creating a single view of customers across both personal and commercial lines and even offering benefits for customers who span lines of business
  • Using underwriting and third-party data to make ever-improving predictive models that could estimate future losses and be applied for better reinsurance planning purposes
  • Applying analytics from across the enterprise to predict optimal staffing levels, skill sets, training, performance management, compensation and attrition
  • Create clear linkages between underwriting and claims to help fight fraud collaboratively rather than independently

The transformation of the insurance industry is well underway and accelerating. If any good has come from the pandemic, it’s that insurers have increased their pace of change. Insurers have now recognized how being a digital, agile organization will be crucial in the new normal and have witnessed how flexibility and optionality with their operating models, products and customer experience are paramount.  Customers are moving towards a self-serve model; automation can only bring more efficiency, replacing previously manual tasks. Though many articles have predicted the changing insurance landscape over the last several years, change has come very slowly. Given where we’re at today, optimism reigns that we’ll be on the other side sooner than we might ordinarily expect.

By: Andrew Wolch, Practice Leader, Insurance

Our insights on insurance

Learn more about our insurance consulting capabilities.