Imagine a world in which a claim is paid before the customer realises they have experienced a loss
I’m the owner of a small textile factory in Florida. Last year while I was away, we were hit by a hurricane which caused widespread damage to my company’s building and some of the equipment inside it.
The first I knew of the factory being damaged by the storm was when I got a text message from Lloyd’s informing me that a claims payment for incurred losses had been transferred into my account – just hours after the event. At a terrible time for my business, at least I got exceptional service from my insurer.
The promise of a fast, efficient claims service was what had convinced me to buy my property insurance from Lloyd’s in the frst place. After a couple of experiences in the past where it took ages to get my claim paid, last year I looked around to see if there were any other options out there. It was my broker who told me about Lloyd’s Next Generation Claims Service and the more I heard about it, the more I liked the sound of it.
As a small business, I rely on a steady cash ﬂow to pay my suppliers and keep production going - any interruption means my customers might go elsewhere to buy what they need. So, when production is stopped, as it was by the hurricane damage, it is very important I get back up and running as quickly as possible. Knowing claims will be paid within 24 hours means I can do that.
One question I asked my broker when we were talking about Lloyd’s was, how does it manage to pay claims so quickly? He told me that Lloyd’s has automated most of the claims process for many types of policies – not just parametric ones – which has dramatically reduced the time it takes from making a claim to getting paid. Apparently, when you buy insurance from Lloyd’s, it is recorded on a ‘dynamic’ database that contains all Lloyd’s policies, the assets covered and the coverage limits.
The new claims process is centred around each individual customer and their loss, and Lloyd’s has considered how to proactively communicate with customers more speedily and oﬀer them the service they need at the right time. For smaller, straightforward claims, Lloyd’s new artifcial intelligence solution processes many claims – meaning unparalleled response times. For instance, I heard that Lloyd’s paid out on a cargo claim within two hours; the refrigeration system from the ship informed Lloyd’s and the claims process kickstarted automatically on the customer’s behalf.
For ongoing, developing losses such as cyber breaches, Lloyd’s rapid response focuses on fixing the breach and getting the customer up and running again. For event-driven losses like the hurricane that hit my factory, Lloyd’s has put in place rapid notifcation systems. As soon as a potential loss event like a hurricane is detected, the system automatically notifies each Lloyd’s insurer and broker as to which of their customers could be aﬀected so that they can get in contact. If the event does take place, the syndicate’s claims process kicks in: the claim is validated automatically and payments are made digitally, directly from insurer to customer, which means it is in my account much more quickly.
Anonymised claims data is shared with other Lloyd’s insurers, which they use to build better models, refine premium prices and improve claims validation. The automatic claim validation is the clever part. Lloyd’s took existing technologies and applied them in combination to assess the damage and ensure claims are valid: it is deploying existing technology in a new way.
For my hurricane claim, my broker told me that, initially, the independent claims manager used by Lloyd’s tried to use satellite imagery to assess the damage. However, thick cloud cover after the storm meant that they couldn’t get all the evidence they needed. So, they used a service that collates CCTV and drone footage to build a fuller picture, meaning they could verify the claim and pay me within hours. It’s good to know Lloyd’s does still use loss adjustors – my broker told me that these days it’s usually when claims are complex or there is disagreement about the scale of the damage.
Shutting down the factory was obviously something I could have done without, but the delay would have been much longer if I had had to wait for loss adjustors to file their reports and deal with a manual claims process. The fast claims payment meant I could hire contractors to start repairs right away and get my business up and running again just two weeks after the hurricane. That meant I had more time to make sure my employees were ok, some of whom lost their homes in the storm.
It is a real comfort to know Lloyd’s has my back and has a claims process that minimises the disruption to my business and my employees by getting us working again.