Liberty Mutual thinks digitally for customers, claims reporting

Digital Insurance spoke with Andrew Palmer, CIO of global retail markets at Liberty Mutual, about his latest role in his 10 years with the company. He is overseeing global retail and small commercial policies, supervising teams from each of these fields. Palmer talked about bringing IT and business teams together to apply technology to customer service, claims and design of policies.

What’s your vision for insurtech?

Andrew Palmer, CIO global retail markets, Liberty Mutual

It's pretty clear that insurance has been powered by actuaries for centuries. Very quickly in the last two decades, that's pivoted to being powered by tech and data. We view that as the new battlefield for insurance. The winners will be the ones that can put the best math into the market, the fastest, wrapped in the best customer experiences. My vision is about how to transform how we work, to bring the business and IT teams together and start solving problems rather than just having the actuaries going off and doing their math, while the IT team's just trying to take costs out on the backside. Bringing these two teams together is really about using tech to develop new business models, to experiment more, to test faster and to create less friction in customer experiences. Data is so important for getting predictions to apply to the market.

Does Liberty Mutual apply new technologies to marketing to customers, implementing policies, or other functions?

It's all of the above. The first big lever is how do you reduce operating costs? In our contact centers, for example, we are using a lot of web chats and chatbots and SMS texts to take out costs and reduce call volume, but also accelerate the processing for our customers. Frictionless customer experiences driving mobile adoption has been a huge lever for us. It’s how customers can do that buying experience more seamlessly through their mobile apps. How do we have the same kind of parity if you will, between our phone centers, as well as our online digital capabilities, and find ways to incent? That gets back to the operating cost, but we've found customers in digital experiences have higher transaction net promoter scores than customers that are calling in.

It's not because our reps aren't super friendly and nice and responsive, just that the bar for digital experiences is being set by industries outside of insurance. People have just this higher level of expectation from how they transact on Amazon or how they interact on their social media accounts. So that kind of expectation.

The third bucket I would put in there is we build products obviously, but insurance is a big distribution game and we have many channels for distribution from outbound call centers to websites, to partners, to still some brick and mortar installations. So how are insurtechs and digital gonna disrupt all those different channels? Forever, insurance companies would build a storefront and spend a lot of time, money, marketing dollars to that storefront and send people into those individual relationships. We're using tech now to embed our insurance products into lots of different ecosystems and lots of different experiences. Think about buying a car. Imagine a world where you turn on your car and you can buy your insurance right in the dashboard and it's paid for and linked to your account, and all the risk factors and your driving behaviors are all embedded there. That's the next level of disruption. That's pretty exciting.

What part of Liberty’s operations is most technologically advanced? Is it something that helps reach that customer service ideal you describe?

Where we're probably furthest along is in customer service. The banking industry was an early advocate of creating self-service online to knock out calls to try to make those really good experiences. So our capabilities in the chatbot space, as well as in mobile app capabilities to let people add cars to their policy and update drivers, all that self-service, is probably the furthest along.

The next frontier where there's a lot of opportunity is processing all the claims. That’s a very high-touch interaction where someone's calling in, we're making a lot of judgments, we're collecting a lot of information about what happened to the vehicle. That's probably the most ripe for modernization, machine learning, autonomous decision-making and a lower touch experience with the customers.

What do you see happening with applying technology to handle claims in the field, with advances such as sending drones into the field to document floods or accidents?

Imagine a world where in an intersection we have cameras hooked up in 5G so that the cars are talking to the cars, the cars are talking to the cameras, the cameras are venting information up into our claim systems, all in real-time. When there's an accident, all of a sudden we know which two cars were in the accident. The car itself is inventorying all the damage. So it's starting to process that first notice of loss to the front end. It's light or serious, scramble out rescue equipment, call the police, send in medical services, start engaging the counterparty insurance company and then, scramble them an Uber, scramble them a tow truck. All of this can really improve the customer's experience.

The next step is getting that data closer to us, to start processing claims. Then we'll know a lot more about what happened in the accident and how to keep our customers safe, but we'll also be able to get after fraud and some of the other things that are actually a pretty big hit in our business, as you can imagine.

What's the potential to reduce fraud or inaccuracies in claims reporting?

We quickly get into data privacy issues here, but if you buy a Tesla, it has 13 cameras and one of the cameras is kind of at your face, so you can know everything that's happened around the car and in the car. And if that data were made available as part of a claim to prove that the vehicle wasn't on autopilot and the driver had their hands on the steering wheel–and that a person just walked behind the car and fell over. They never even touched the car. There's computer vision analytics that we can do in and around the car, that is obviously hugely helpful. And then you bounce that up against the data that's coming out of the other car. This is getting way down the road, but if you bounce it up against the other car in the collision, you can reconcile who is at fault. Did someone miss a red light?

Down the road, if both vehicles are autonomous, what kind of rules were broken within the accident? That level of detail and data coming out of the car is gonna be super important. The technical challenges--one, partnering with the OEMs who have the data today. Even the most basic cars are collecting all this data. Two, how do you move that data? And that's where 5G is so exciting. It's very hard to get that data unless you have a high speed network, much faster than what 4G and things we've had before would provide.

Another use case I’m excited about is when there are young children becoming new drivers. The safety applications for this will be huge for teen drivers and for parents and how you integrate that into decision models or warnings back to the driver. When I was a kid, way back when, my parents just put me in the car and they didn't see me for a couple hours. We're getting better with apps and certain tracking or whatever, but how do you put in safety technology that's making decisions? Maybe even interacting with the car and limiting speeding? Or if it's noticing driving erratically, causing some proactive interventions, which is encouraging from a safety standpoint.

Are there ways that technology is being applied to modernize or improve upon what you offer to small businesses policy-wise?

The line is blurring between personal insurance and small commercial insurance, which is inevitable. If you're an Uber driver and all of a sudden you go onto your personal insurance, but then you want to get back on the clock and pick up people, it's your time. Especially as you move more and more into the gig economy, those lines are going to get blurred. So I'm viewing the small commercial market very much like the personal market in that small businesses are gonna want that self-service digital capability. There's just a lot of variation in the commercial products that make that standardization a bit harder, which is an opportunity for us, but it's a bit of a headwind from a distribution standpoint.