TechExec: Michael Lewis, CEO at Claim Technology
September 6, 2021 James Tribe
In our latest interview James Tribe, Content Manager for Magellan™, caught up with Michael Lewis, CEO at Claim Technology. The business has taken a significant pivot during the last year: from being the provider of a solution targeted at one area of the value chain, to enabling other InsurTech solutions across the entire value chain. They discuss the major challenges faced by insurers and how Insurtech Gateway seeks to solve these problems.
James: Tell us about what you do at Claim Technology?
Michael: Historically, the insurance claims process has been ‘linear’ like an assembly line with the claim going from broker to insurer to TPA to supply chain provider, etc. Let’s call this the “B2C” (business-to-consumer) model where the insurer has to manage a very manual, inefficient and expensive process that is ‘pushed’ onto the customer. In contrast, digital-savvy customers now want the exact opposite – they expect to have the control to self-serve their claim and ‘pull’ what they need. Claim Technology is the only no-code/low-code platform for creating best-in-class “C2B” (consumer-to-business) claims processes in the cloud.
We provide a digital engagement layer for customers to self-serve (unless you want to create your own UX powered by our APIs), as well as the “glue” (i.e an extensive set of APIs and no-code/low code connectors) to an eco-system of over 50 best-in-class InsurTechs to accelerate your digital transformation roadmap. Our platform is particularly helpful for teams that want to innovate faster by testing potential InsurTechs in a sandbox environment and then scale these up without the need to build and maintain dozens of point-to-point integrations in-house.
James: This is a little complex to understand, can you give us an example?
Michael: Imagine I’m looking to create a motor e-FNOL process. Rather than build a solution in-house, I can browse Claim Technology’s 1-Click Marketplace for a plug & play eNOL solution and leverage pre-built connectors to automate every step in the process using AI, i.e zero-touch, real-time decisions on 1) DPA checks, 2) policy indemnity/coverage, 3) liability/fault, 4) deep-fakes/tampered images 5) damage detection/estimation 6) SMART repairs 7) total loss valuations 8) fulfilment and 9) settlement. Our platform enables you to create a ‘parametric’ style experience for customers on non-parametric insurance products.
Whilst most platform users start small by shifting 40% of eNOL to self-serve, we see some platform users automating as much as 80% of manual touch-points, enabling claims teams to focus their time on controlling indemnity costs on the 20% of claims that really matter.
James: What has been the journey for Claim Technology so far?
Michael: I had spent 15 years in both COO and CTO roles and had experienced first-hand how legacy technology from Guidewire, Duck Creek, etc. simply weren’t fit-for-purpose. Furthermore, 2 decades of adding more automation/3rd party solutions into legacy architectures wasn’t generating the anticipated uplift in productivity KPIs. Our moonshot started with a simple question: “what would it take in 5 years to turn the claims process upside down and create an entirely digital, touchless claim?”
We started by focusing on customer UX by developing an immersive ‘virtual agent’ experience for customers to self-serve. We then developed a set of no-code tools for companies to create their own customer self-serve experiences. But when we saw that companies didn’t have the time or skillsets to create digital experiences that achieved their target metrics, we launched a marketplace of plug&play solutions that they could start testing/deploying with one-click.
By the time Covid started, we had insight into why innovation between insurers and InsurTechs wasn’t working, and we wanted to see how we could foster collaboration and raise the bar for the industry as a whole. We thought a lot about the ‘win-win-win’ marketplaces we see in other industries, such as Uber or Airbnb. This led to us create a unique value proposition – a truly ‘Open Insurance’ marketplace to accelerate working innovation for insurers, MGAs, and brokers whilst helping budding InsurTechs go to market more easily.
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James: This is quite a unique product. What is the problem it’s solving, and why haven’t other providers been able to solve it (or insurers solve it themselves)?
Michael: There are three major challenges faced by insurers globally that Insurtech Gateway helps to solve:
There are insufficient internal IT resources to make solutions available to the business at the speed the business demands. Plugging new InsurTech capability into existing legacy enterprise architectures is complicated, and the more that is plugged in, the more difficult it is to support, flex and add to. Business and IT teams need more agile tools for each to be able to jointly contribute to and build/test changes to operational models or launch brand new product propositions.
As a result of these challenges, insurers have reached the limits of what they can build ‘in-house’. Insurers have historically seen themselves as the builders as well as the designers of their technology, but there is now too much complexity to master to be able to pull together everything internally. Similarly, it used to be cheaper to build in-house, but cloud computing has turned this on its head.
Many of our platform clients have adopted a new mentality – of being a custodian that ‘assembles’ solutions in the cloud by leveraging our tech, a little like the iPhone that is designed in Silicon Valley but manufactured elsewhere.
James: There’s so much talk of ‘ecosystems’ in insurance right now, but arguably, limited progress so far in building them. What are some of the blockers you see in working with insurers on ecosystems?
Michael: Legacy providers like Guidewire and Duck Creek have built eco-systems around their core platforms. There are so many problems with this model. The first is that you’re just continuing to plug new InsurTech into a legacy model that isn’t working. What you really need is a once-in-a-generation paradigm change. Legacy systems are, by their nature, ‘closed’ ecosystems so an InsurTech is only allowed in if they don’t compete with the legacy vendor, and the cost of integrating an InsurTech solution into a legacy model prevents the most interesting InsurTechs from being available anyways.
Cloud providers like Microsoft Azure, Google Cloud Platform or Salesforce also offer Marketplaces but there is a level of speculative product investment to be able to build or support solutions in each cloud provider and InsurTechs can’t afford the R&D as well as funding a B2B sales cycle. As an InsurTech Gateway Marketplace, our value proposition to InsurTechs is that we have the economies of scale to build connectors in these marketplaces that can help them go-to-market.
We are also seeing several legacy and modern PaaS providers that are interested in adding our gateway to their core offer. This supports my view that legacy systems will remain as systems of record with a focus on supporting internal needs, but the tech to support customer needs will be met by our tech in the cloud with an API integration between ‘on-prem’ and ‘cloud. i.e we don’t compete with legacy vendors but naturally complement each other. It’s nice to think that you can achieve a paradigm shift without having to rip-and-replace your existing investments.
James: What can your clients look forward to from you in the future?
Michael: We’re just about to launch a sister-brand, insurtechplatform.com which will offer gateway and marketplaces solutions that covers the full insurance value chain, from underwriting to renewals, mid-term adjustments and claims.
We’ve also been steadily expanding the number of InsurTechs, whose products we can help take to market and generate commercial deal flow. Someone once said to me that the people they found the most interesting were the people that were most interested in others. In a similar vein, we tend to focus on how we can help bring other InsurTechs to market so that as we help both insurers and InsurTechs, our own success will follow.
The Oxbow Partners View
When we last spoke with Claim Technology for a Bitesize InsurTech profile in 2020, their focus was exclusively on claims software. It is interesting that the business has taken such a significant pivot during the last year: from being the provider of a solution targeted at one area of the value chain, to enabling other InsurTech solutions across the entire value chain. This change in proposition has some interesting operating model implications for Claim Technology which they appear to be navigating. For example, they now require a capability to attract and retain other InsurTech vendors on their platform – a capability they did not previously require.
During the interview, Michael highlighted that a ‘full stack’ mentality and a lack of internal IT resources hold back organisations undertaking technology transformations. To this, we would add the challenge of a lack of clarity around the value tech can bring. How many business leaders really have full visibility over all the challenges and inefficiencies faced by their tech/IT teams? Without this clear view on the costs of current IT architecture, it is challenging to compare and contrast the potential cost savings provided by a platform such as Claim Technology.
That being said, Claim Technology provides an excellent platform from which to develop targeted POCs to prove the value that an InsurTech vendor can bring to an insurer. For a relatively low cost, insurers can access the InsurTech vendors on the Claim Technology platform and test how that vendor would work if implemented full-time. If done correctly, this could be an effective sales tool for InsurTechs to help them ‘get in the door’ at incumbent insurers.
Find out more about Claim Technology on Magellan™