Sustainability – One more responsibility insurers must tackle
In comparison to other financial products, claims settlement has a more visible environmental impact.
Sustainability is on a steady rise and a key factor for staying relevant.
Sustainability is on a steady rise and will most likely be a key factor for insurers to stay relevant. Yet, insurers are no strangers to sustainability. In comparison to other financial products, claims settlement has a more visible environmental impact. By implementing sustainable claims management, insurers can act as first responders and take a vital role in managing environmental, social, and governance related challenges (ESG).
Consumption vs sustainability: what’s the role of the insurer
The core business of the insurance industry is to understand, manage and carry risks. As our world is facing increasing ESG-related issues, the insurance industry would benefit from being part of the solution by providing products and services that contribute to a sustainable future. As a growing number of policyholders want to act in eco-friendly ways, providing “sustainable claims management” has become a significant competitive advantage. Offering sustainable options during the claims process should harm neither the customer nor the insurer in how quickly, easily, efficiently, and accurately claims are handled.
Thanks to circular thinking claims might even get profitable
So, where to start? By providing “greener” options during the claims process, both the customer and insurer will profit from circular thinking. In almost every claim, lies the possibility of making sustainable choices. Fostering a mindset of repairing and recycling instead of scraping or storing broken products such as cell phones should be common understanding.
How to drive factors that have a big impact on sustainability within claims management:
- Integrating ESG issues into repairs, replacements, and other claims services. Offering fast, fair and transparent management throughout the pipeline and making sure that claims processes are clearly explained and understood.
- Becoming more customer-centric and transforming FNOL into a differentiated experience.
- Empowering customers with automated self-service.
- Creating a fair and transparent compensation calculation.
These driving factors could in return create multiple cost savings and benefits including:
- Digitalization and automated service enable sustainable operations. Speeding up the adjuster’s handling time of a claim through digital tools has the potential to minimize travel, paperwork, and save time. This benefits not only the customer, adjuster, and insurer but also the environment.
- The reduced lead time for claims handling will also reduce business discontinuance and disturbance for the customer which usually means increased customer satisfaction.
- Integrating a circular mindset into the claims process will lead to reduced material, transportation and energy usage, which raises the pot of savings, as fewer resources will be used in production.
- CO2 emissions can be reduced, measured, and used in ESG reports
- Most importantly, the level of waste will be reduced.
Striving for a higher bottom line
A sustainable claim is economically feasible for both the insurer and the customer. Settling a sustainable claim doesn’t harm environmental or social capital now nor will it in the future. The ultimate goal is for the insurance industry’s claims process to have zero negative impact on the environment. Transitioning into a sustainable society is one of the greatest challenges of our time where sustainable consumption plays a key role. It is therefore time for the insurance industry to take action on sustainability and to step up to its obligations.