Julian Stainton, chief executive of private medical insurance (PMI) insurer WPA, said although automation and the use of artificial intelligence (AI) could drastically cut down the waiting time when making a claim, too few companies are embracing this technological trend.
Mr Stainton said: "Legacy systems are the bane of all financial services businesses. We are in a period of constant revolution but large financial firms seem to suffer from 'corporatitis'.
"The attitude towards tech innovation is 'It's okay, but there's nothing wrong with the tech we have'. It seems many big commercial insurance companies still run on green screens and mini mainframes. They're simply sweating the assets to maximise the profits."
Mr Stainton, whose company has been using AI in the claims process for nearly a year, drastically cutting down processing times, added any idea of "revolution and change from within" is "nearly always resisted in corporate environments, because the bosses suck their lemon drops and say 'we've always done it this way, so why change?
For too long insurers have been like moles, burrowing underground without seeing what the clients' expectations of service are. Julian Stainton"It's not conscious but people think machine learning might sweep away a lot of jobs. Turkeys do not have a good record when it comes to the celebration of Christmas.
"Just so, there is a corporate and social inertia when it comes to the insurance industry, which is resistant to machine learning and AI."
According to Mr Stainton, while WPA has been using automation, this will never replace the human element of empathy, understanding and providing a listening ear, which he said is crucial when dealing with clients making a claim.
However, technology helps give people what they need, when they need it, he added.
"For too long insurers have been like moles, burrowing underground without seeing what the clients' expectations of service are."
The reason WPA automated the claims process is was that people expect an immediate answer and need providers to be clear over what is, and what is not, covered.
Mr Stainton said: "There are between 600,000 to 900,000 different potential factors to build into a claim now: medical conditions and their increasing complexity, data protection, or the number of GPs and consultants.
"Medicine has become staggeringly complicated so we cannot just say 'yes' immediately, as this means we have committed to an indefinite liability."
But instead of putting a claimant through a "long-winded" process of telephone calls, he said the experienced staff can use the AI system to help speed up the claim.
"This juggles all the variables and, within about four to six minutes, the machine has found out the name of the GP, the client can validate it, and a few questions later, the staff member can authorise a claim with quality, accuracy and certainty."
According to Mr Stainton, since the AI-based engine was implemented, 99.1 per cent of people calling can get authorisation for a claim on the spot. He said the mean time it take for authorisation is 6 minutes.
Earlier this month, Mark Holweger, managing director for Legal & General Insurance, said the firm was exploring ways to use data intelligently to cut down on the need for so many questions before people can get an indicative quote.
He told FTAdviser: "We have an old adage in the industry that protection is sold, not bought but I think this is a self-imposed obstacle.
"With all the technological innovation available, we can break this obstacle down and help provide advisers with tools to start that protection conversation."
In response, Damian O'Connor, managing director at Roxburgh Financial Management, said: "If the tech can engage people in protecting themselves and their families, it’s a good thing.
"It does need to be reliable as there’s no point giving someone a quote if the recognition software is way off and needs to ask a whole other bunch of questions too."
simoney.kyriakou@ft.com
