Q&A: James Nicholson, Zurich UK chief claims officer
02/19/2024
James Nicholson, chief claims officer of Zurich UK, shares how the provider plans to do more retail and mid-market business and how it uses artificial intelligence to handle claims.
This article was taken from a Q&A originally produced by Insurance Post, to read it on their website please click here.
You joined Zurich through the graduate scheme in 1997, rising to chief claims officer in 2023. What are the key changes or innovations you have witnessed?
One is probably the pace of change itself. It’s remarkable, and it constantly aligns with evolving customer expectations. My focus remains on staying in sync with these rapid evolutions.
Whether we’re discussing communication channels or exploring more streamlined and effective ways to engage with customers, the landscape is rich with nuances.
Another aspect is the progress in advanced analytics and artificial intelligence capabilities.
We’re witnessing advancements in natural language processing and document analysis. Over the past 26 years, the most notable and impactful strides have been in the realm of fraud detection.
That development in particular has empowered us to identify fraud by leveraging advanced analytics, screening claims efficiently through our systems.
Since Zurich withdrew from brokered personal lines home and motor business in July, what has been the company’s claims experience?
We still manage a substantial number of policies with ongoing claims in personal. Our overall claims volume remains healthy, thanks to growth in our retail book.
One thing we’ve observed is an increase in high-value claims, partially attributed to challenges such as local authorities facing budget constraints.
Looking ahead, we anticipate growth in SME, retail and mid-market segments. We are already witnessing this trend materialise in the latter part of 2023.
As we move into 2024, the expansion in retail and mid-market segments is expected to offset the decline in personal lines, ensuring a balanced claims landscape.
How does Zurich anticipate and address changing customer expectations in the claims process?
By offering varied communication channels. For example, traditional phone calls, or a more dynamic interaction, such as a WhatsApp chat or a video call.
This not only enhances customer experience but also identifies vulnerabilities, especially through telephone conversations with our team. All the handlers within that team have gone through a very specialised customer experience training centred around empathy.
Managing expectations for losses involves prioritising speed and ensuring swift, appropriate payments, aligning with our commitment to promptly meet customer expectations across all service aspects.
When it comes to fraud prevention, how does Zurich adjust its fraud strategies in response to economic trends, like the cost-of-living crisis?
Not directly tied to the cost-of-living crisis, but notably, in 2022, we observed a significant 30% uptick in property fraud instances.
Throughout this period, we’ve been actively enhancing our toolset, particularly focusing on advanced detection solutions, allowing us to efficiently screen and pinpoint potential fraudulent claims.
Things like artificial intelligence-powered fraud detection systems that better identify dishonest claims, or image recognition tools that can speed up the entire process.
This is all going on in the background of a claim, but it’s crucial to emphasise that honest customers have nothing to be concerned about. In fact, this approach benefits them immensely.
The process is swift, seamlessly conducted in the background, right at the first notification. This enables us to promptly place legitimate claims on the fast track, eliminating the need for prolonged back-and-forth or extensive investigations.
How does Zurich identify emerging risks that could impact the claims landscape in the future?
As an insurance company, we hold a responsibility on multiple fronts: to our customers, our workforce, society at large and the planet.
From an environmental standpoint, claims have been at the forefront, witnessing the impacts of climate change, such as floods and wildfires. As insurers, our focus should extend to mitigating these risks by reimagining the role of the claims function, emphasising prevention.
Through partnerships like our collaboration with Previsico for flood risk resilience, we engage with the industry to identify and prevent risks.
Zurich utilises AI in the claims functions. How do you strike a balance between the technological and the human?
I believe there's a significant dialogue surrounding whether AI will entirely replace standalone claims processing. From my perspective, and I believe this sentiment is shared across Zurich, AI in the digital realm acts as an enabler for claims handlers.
It shouldn't be perceived as a direct competitor to their roles; rather, it should complement and work in synergy with them.
We do that by applying AI to our research and intelligence-gathering processes through our partnership with Xapien.
We recognise the tangible advantages of incorporating digital tools while emphasising the importance of maintaining a human touch.
Dealing with claims, regardless of their nature, always requires an emotional connection; it requires a human to consider what those individuals are going through, especially if they’re identified as vulnerable.
Our Concierge Team is an example of this. Initially formed to streamline claims with longer cycles, like escape of water, it’s expanded its role to include a broader group, particularly focusing on supporting vulnerable customers over the phone.
