Modern Claims 24 - rradar Pullout

CLIENT INTERFACING SIMPLIFYING THE LAW

GARY GALLEN We should be looking at becoming business enablers and performance enhancers, so that we are filling the potholes in the road before the customer gets to them, rather than there being a focus on insurance being used to fix the axle afterwards

01 Modern Claims

March 2017

CLIENT INTERFACING

GARY GALLEN One of the largest complaint areas in professional services is around a lack of communication and sharing of knowledge, as Gary Gallen explained when he spoke to Modern Claims about how technology, specifically machine-learning, can facilitate the availability of information and the understanding of law.

Q A

What are the typical features and capabilities of a machine learning system in 2017?

There is arguably no such thing. Artificial intelligence, chatbots and machine learning are all much used terms as is now the title of cognitive solutions. Neural networks, predictive analytics, natural language classifiers, robotics and visual recognition are all further examples.

It has been reported that by 2030, about 30% of the population are at risk of losing their jobs to automation. People are reporting that these different types of machine learning systems are going to take peoples livelihoods away, much as the JCB revolutionised construction.

There needs to be a recognition that advances in technology are not to be ignored, and instead of change being an anxiety, we must learn to have better attitudes towards change and technology. We must embrace it and re-frame where the human still adds value and is still important; we move our scope of work and what the value proposition is as a business, but it doesn’t necessarily take away our livelihoods and prevent us from working.

I am certainly an advocate for understanding the opportunities that technology can bring and using it to shape a destiny with people still very heavily involved.

Some ‘typical features and capabilities’ that we are used to seeing are the basic chatbot structure, for example when booking cinema tickets, the way that the bank contacts you to verify certain transactions, and virtual assistants emerging like Siri, Cortana and Alexa. These are linked to artificial intelligence machine learning.

The one we are seeing arrive the most and the fastest into our lives is the natural language classifier.

It is fair to say we’re only just scratching the surface with the use of machine learning and cognition solutions.

Q A

How can machine learning be adopted by claims professionals to improve their workflow and efficiency?

I throw the claims professionals net wide because there are a number of people in that broad category. A claims professional starts with the underwriter; the person that designs, creates and introduces the policy. There then needs to be more joined up thinking between the people in the supply chain that service the policy for the insured; it’s not just the solicitors in a courtroom dealing with a claim, with the underwriter being detached from a more complete solution.

One way artificial intelligence can assist is by asking: What is the business behaviour? What does the business need to know? What information can we provide to the insured to manage risk? What education can we provide?

Workflow and efficiency can be increased with the use of technology because we need to share knowledge amongst the different people that work with a business. How can that knowledge be blended between the different professionals to

02 Modern Claims

We should be looking at becoming business enablers and performance enhancers, so that we are filling the potholes in the road before the customer gets to them, rather than there being a focus on insurance being used to fix the axle afterwards identify the risk and provide relevant insurance? We should be able to say this insurance premium now provides you with access to a knowledge, education and training and support tool that shows you how to manage against and mitigate all of your issues.

The rradar methodology is to take all that locked up knowledge from all those different claims professionals, then use it with the technology to analyse the information, put together better solutions and education programs and provide it to a business pro-actively. It should be an open access platform as well; it should

March 2017

CLIENT INTERFACING

As a group of professionals, surely we cannot continue doing the same thing year in and year out and expect behaviour to change.

We need to work and communicate effectively and share knowledge, experience and expertise together not be knowledge that costs a fortune to obtain. As claims professionals, we should be looking at becoming business enablers and performance enhancers, so that we are filling the potholes in the road before the customer gets to them, rather than there being a focus on insurance being used to fix the axle afterwards.

Q A

What are the challenges in establishing a new technology with the claims sector, and how are these addressed?

With a great degree of stubbornness! Persistence is required to drive any kind of change. I’ve been working with brokers, insurers and customers for over twenty years, prosecuting, defending and investigating. This has given rradar the opportunity to speak to different people in the claims professional arena and say, “these are the businesses that are coming to us with the problems, these are the things they think they are insured for, but we are increasingly having to point out that they are not. These are the size and scale of premiums that they’re having to pay that keep escalating”.

As a group of professionals, surely we cannot continue doing the same thing year in and year out and expect behaviour to change. We need to work and communicate effectively and share knowledge, experience and expertise together. All we’re doing is handling the payroll. The customer is the employer and pays our wages. That customer has a right to expect something that is solution led rather than problem led.

We have to be more anticipatory, we have to be more predictive, and we have to be more in advance of the difficulties. The data has patterns in it, it has trends in it, and we can use that to better inform and educate our customers.

The challenge was talking to enough people to prove the model in a small way, with three or four ambitious brokers initially and an underwriter working in a small way sector-bysector, proving that the model worked.

The law is built on common themes; I don’t mean this to denigrate Parliament and our legislature, but they are not ambitious enough to constantly pass completely new legal concepts every time they pass a new piece of legislation.

There is a huge amount of similarity in legislation and the behaviours it is intended to manage, as well as the policies and procedures that are expected of businesses. Can we not group those similarities and make policy and procedure simpler? We can point out the simple common threads along with the differences that are required for an organisation to prove understanding and compliance. Whether it’s health and

All we’re doing is handling the payroll. The customer is the employer and pays our wages.

That customer has a right to expect something that is solution led rather than problem led

March 2017

safety, employment or bribery and corruption issues, we are simplifying this process.

I’ve been trying to develop this with other law firms for over a decade, but it was only when I resigned and re-mortgaged my house that I was able to create the culture and build the technology from scratch, without the anchors of an already existing practice.

Q

Do you believe that the legal sector has been historically slow to adopt new technologies, and if so, to what do you attribute this?

A

Simple answer: yes. There are anxieties in the legal profession.

Technology in many ways can behave like the law; it has a language of its own, it has its professionals and experts, and perhaps they’re not great at communicating to others in order for people to understand it and embrace it, similar to law.

When I was in the courtroom, I learned very quickly that if I wanted to communicate something to the magistrate or to a judge, if I don’t use very simple language and simple steps, I lose my audience. It’s the same when talking about the code and the language of technology. We are simplifying insurance, simplifying the law, the technology, and blending them together with the skill of teaching and educating. That is rradar in a nutshell.

If we had asked our customers or colleagues what they wanted, they would have said a faster horse, akin to the great Henry Ford quote; they would not have asked for a motorcar to be designed.

We have a similar challenge in developing this new platform to speed up and effectively provide education and advice.

Q

How can machine learning technologies be implemented to improve transparency and clarity of legal services for consumers?

A

I learn a huge amount from my children; I have a son with special educational needs, and I try to understand his difficulties and how better to communicate with him everyday.

We find that by working through colour, use of pictures or reconfiguring a computer keyboard to get rid of the standard, traditional ‘Qwerty’ keyboard, we can make things accessible for my son. We try and teach our children to do the right thing, to learn and to be diligent at school, but when they leave school to enter the big wide world we forget it’s simply a bigger classroom and to be successful it’s still about education.

However, we’re not helping to educate and we’re not sharing knowledge in the way we should do, so people don’t understand the law. Why don’t we take the fantastic skill that I’ve seen in the classroom in teaching my children, in particular the experts that are willing to find ways to help children with special needs find their place in the world, and simply scale that back and continue an education process to democratise the law?

This is a personal example, but for me it shows precisely how we should be looking at technology to distribute and provide education to people far more effectively.

The law is supposed to help people, not tell them no and stop them. Since when did we get so arrogant, expensive, distant

Modern Claims 03

CLIENT INTERFACING

Technology in many ways can behave like the law; it has a language of its own, it has its professionals and experts, and perhaps they’re not great at communicating to others in order for people to understand it and embrace it, similar to law and complex, and retain this language and its mystique, when the law is supposed to open doors and help?

Q A

How will machine learning affect the everyday consumer over the next few years?

An analogy I like to use is records and CDs. When developing the iPod, Apple saw the need for a small device that you can take anywhere, anytime, anyplace and listen to any kind of song that you’re interested in. They knew they must find a way to get that to people simply and smartly, to make their lives better and easier.

This is similar to the law. A huge amount of the law libraries and catalogues can be categorised, titled and simplified.

We can allow it all to be downloaded and accessed. And in the same way that all of our families use eBay, Amazon and iTunes, we should be able to say to people that if they’re on a building site and asked to do a job that needs advice, and potentially requires a risk assessment and a method statement, they should be able to ask Grace and get help.

You will be able to ask a focused question and get a focused answer, and it will go and search legislation and bring you that material.

Currently, the legal profession is looking at using technology to improve their own performance internally, but not by providing a technology and putting it directly in the hands of the customer. So if the customer comes to them with a query, they will use the fantastic artificial intelligence machine learning to help give that lawyer or adviser that information quickly, but they will then pass on a large fee to a customer.

There is still delay and a greater cost in there. What we’re saying is that technology should be folded into a solution with the law and put in the hands of the customer.

Q

Do you see automation ever completely replacing claims professionals, or will the human element of claims always be necessary?

A

No, the human element will remain vital. When you’re thinking about loss, distress, business reputation, something people have built up, like a family business or large corporate business, and things you invest in, work on or are committed to, there is a connection with another human being. There is empathy, emotion and there is caring. If a business is in trouble, they will want to see somebody and they will want human interaction.

Technology is an enabler. It will mean that certain types of repetitive work, advice and material will be taken over by computers, but we are intelligent enough to reframe and reshape the way in which we work and focus on talking to people more effectively.

We have to accept as professionals that the biggest areas of complaint about the legal and insurance professions are failures to communicate regularly, effectively and speedily about a client’s case and the claims we handle. Let the machines take some of that pressure away and embrace technology to more effectively deal with those issues, and then we might have fewer complaints as we can focus on client communication and support.

04 Modern Claims

Q A

What will be the ‘next big thing’ in technology that the claims sector should seek to adopt?

Anything that facilitates more transparency in all that we do; technology should allow sharing of knowledge, by making the content dynamic, engaging, accessible and simple, because people learn in different ways. We should not be frightened to have a conversation with people; professionals should start sharing knowledge between each other to give a better solution to business, as we are still too disjointed.

The use of virtual, augmented and mixed reality solutions are certainly going to develop, as is gamification.

Q A

What’s next for rradar and for Grace?

In May we launch Grace to AXA management liability policy customers, providing them with HR and employment advice services. The management of people is still the biggest advice area and one of the biggest claim areas that the whole sector faces. We have video and e-learning modules that will also be launched, along with some gamification tools to engage staff. We want our clients to realise that working with us is a constant and never-ending improvement journey, where we will be adding products and services every month.

We will then be driving more engaging kinds of teaching and learning experience forums. We have customer loops, as I call them, where we talk to a sector and group of customers, they then help us design an advice package, and then we code, develop and put together technology for them to test. What I see for Grace is more of those designer legal services, designer claims and designer insurance services; professionals shouldn’t assume what people want and push it on them, they should be taking their knowledge and giving it to the customer, and then with the customer design specifically what the customer wants in the way they want to consume it. We also find it hugely important to engage with the employees and the client’s business as a whole, not just the organisation’s leadership.

What Grace will be is dynamic and flexible; the more you talk to her, the more she understands you and the smarter and more focused advice she can provide. So the business can have a predictive adviser and support network that builds around them. It is not just a tool for the business owner to look smart, it also goes to their managers, senior staff and employees and gives them insight and information as well. The business owner often finds that people need to understand in order to do things in the right way, but they need something to engage them; we’ll give it to them.

GARY GALLEN is Founder and CEO of rradar.

March 2017

CLIENT INTERFACING

CASE STUDY Castles, Courts and Christmas A

crisp Christmas morning. Up early, beat the traffic, a good parking space. A black coffee and a quick check of the running order.

Unsurprisingly, they stood by their decision and refused my client his liberty by not allowing him bail pending an appeal before a judge in the crown court.

Last. We were the last case of the day. This would be difficult for my client. Justice makes you wait. She rarely hurries. She weighs and balances for weeks, months and even years. And when the day of judgment comes, you wait again until most of the day is done and gone.

My bail hearing 48 hours later, however, before a judge had been more successful. My client was released immediately pending another sentencing hearing two weeks later. No promises, though, that imprisonment was off the table when back for sentence.

The law likes to pause. It does not like to be hustled and bustled, chased and pressured like pretty much every other aspect of life. It stands rigid, tall and resolute against the tide and wave after crashing wave of ceaseless booming change in the world.

And so to Lincoln. A beautiful city. The magnificence of the Cathedral looking over the Crown Court set within Lincoln Castle. Formidable and imposing‌

A check of the watch. Still quite early. Client still not arrived. I always like to be there first. Nothing more stressful for a client than an appearance in court. All the weight of waiting, the anxiety of anticipation mixed with the primitive raw emotion of fear is plain to see.

How do you encourage, support and convince a person to voluntarily submit to attending at a place and waiting to be told whether their freedom was about to be removed and they would be handcuffed, led away and imprisoned? I had done it now many hundreds of times, but to me, it was still much more than just part of the job.

These are the real lives of real people, and believe me, they can pretty much always tell whether you genuinely really care or if you are just there to make up the numbers.

My client this day was due for sentence. I had represented him many times. In fact, many of his family and friends had made my professional acquaintance.

This client, Lazarus I shall call him, had a criminal record.

Minor skirmishes with the law. Bumps and scrapes but never been to prison.

Until this case. A case of assault. A late night, public, alcohol-fuelled assault. And an admitted assault.

My client never denied what happened. He had cooperated from the outset. And justice had reacted uncharacteristically swiftly as a result. The magistrates handed down an immediate custodial sentence.

My client knew it could happen. I had told him so. Although his story was compelling, his behaviour recognisable. I listened to the decision and reasons given for such a lengthy sentence. I knew it was unfair. Instinct told me it was wrong.

I have seen the hardest and most experienced clients shrink and feel the weight of justice around them when waiting in the tight, narrow corridors and cells from centuries before beneath the Castle.

The courtroom, too, no less intimidating. Huge, highceilinged, solid, wooden and chill. And where justice is trusted to sit, no less impressive. More solid wood, beautifully carved and jutting out into the midst of the courtroom, commanding attention.

Six cases heard before us. Six people leaving by a different exit. Six sets of sometimes angry, often crying, often confused partners and friends, leaving to return to Christmas freedom. Some related to the accused, some the victim.

Our turn. Formal, opening introductions made. Justice speaks: I have read the papers. I am minded to pass a noncustodial sentence.

Recognising my client was provoked, was defending his girlfriend, he was struck first but was more capable of defending himself, having been a boxer, so over-reacted.

And had spent two nights in prison.

No need for me to interrupt. Client relief. Thank you.

Out of court, out of the castle. Into Christmas. Family, gifts and laughter. A marvellous Christmas fair held in the castle grounds. Two worlds, separated by the width of a brick.

The consequences of our behaviour can be far-reaching, the impact of the law intimidating. So can we tell these and other stories, pass on the lessons they contain and help people understand that actions have consequences?

Sometimes slow, sometimes swift. Can lawyers and justice become teachers and educators, helping simplify and avoid pitfalls? Can we enable and empower?

There is the challenge.

A quick conversation with my client in the dock whilst the handcuffs were being applied. We wish to appeal the decision immediately and apply for bail, the court was told.

Never an easy situation. To ask three people who have just agreed upon a fixed course and decided to imprison a man to reconsider within a few moments is tense and difficult.

05 Modern Claims

Sharing knowledge, using technology to touch real people, connecting real people, not replacing people.

GARY GALLEN, Founder & CEO, rradar.

March 2017

CLIENT INTERFACING

DAVID WILLIAMS David Williams believes the insurance industry is ripe for technological change that will transform the way it interacts with consumers. Modern Claims spoke to David about the form these technologies may take, and how they will alter the structuring, benefits and value of policies.

Q A

How do you foresee the role of automation in insurance evolving in the next few years?

When talking about automation, it is important to split it down into the key areas and different applications.

One element is the robo-adviser; the automation of the interaction with the customer. The second is artificial intelligence and the final one, which is often described as artificial intelligence, is machine learning. They are all progressing at different level; if you look across at other industries, some are already using robo-advisers. If you speak to people based in the more technological companies, you will often speak to a robot, and it won’t be a stilted non-interacting voice at the other end; if you rang up with a relatively simple query, you will genuinely think that you are dealing with a polite and efficient human being. Some processes are truly automated in all senses of the word.

Machine learning is something that is probably more advanced than a lot of people think. Machine learning, to me, isn’t true artificial intelligence. To me, machine learning is where you are running calculations, and you’re looking at what is happening and you’re looking for predictability and patterns. When I see artificial intelligence, I see something that is truly able to make decisions; it understands the nuances and is less dependent on the format that the questions are asked in. That is where something like Grace comes in, because that is absolutely based around true artificial intelligence, and as a result it can provide much better answers and service than a machine would have in the past.

Q

What are the challenges that exist around implementing automation in insurance, and how can these be tackled?

A

The biggest one is the insurance companies themselves, because our structures aren’t desperately nimble. We don’t like to try things out because we are a regulated industry. We have also got massive mainframe systems, and accounting, finance and reporting systems on the back of those. Therefore, the idea of replacing those with modern technology, robotics and artificial intelligence is really difficult.

If you’re changing technology and you want to get the maximum benefit, you have to change your processes as well. People are worried about technology replacing jobs, and people, especially in the claims area, don’t like change.

This is one of the reasons why we are pleased to be working with rradar and Grace, because one of the best ways to be able to progress in these areas is to partner up with other people that aren’t burdened by that historical legacy, and that are also a bit more nimble and innovative than a big corporate giant like ourselves.

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Your digital native will expect to do everything on a tablet or mobile phone. They won’t say that it’s amazing, as frankly it is what they’re getting in every other business and industry

Q A

Do you predict automation will be met with acceptance or scepticism by insurance customers?

I have spoken to robo-advisers and I have finished the conversation and found that I have been genuinely unsure whether I have been speaking to a human or a robot. If we were talking to customers about it, then yes they would be sceptical.

Technology is advancing at a tremendous rate, and a lot of the benefits are going to come from things that customers won’t desperately understand or care about. In order for us to improve our pricing, analytics, claims settlement or provide advice in a way that the customer wants it, which is to say quicker, easier and cheaper, then that is all the customer is going to care about.

I think there is scepticism, but once customers have experienced it a few times and are gaining the benefits, then that will fade. If you look at Grace as a specific example, we are able to give customers something that previously they would have had to pay hundreds and thousands of pounds for; they aren’t too sceptical about that, are they?

Q A

How can automation alter the perceptions of insurance and legal services from digital native consumers?

One of the ways that we are able to get people interested in our industry is by talking about the technology that we are using and the progress that we are making. And that, if you are a digital native, is what you expect.

Insurance companies are not known for being at the forefront of technology or using it. We are seen as being very old fashioned. The big difference is that it enables us to offer the interactions in the way that these people want and expect; if we couldn’t use robotics, artificial intelligence and machine learning, then the costs of being able to interact would be so much more expensive, and we would be prohibited.

March 2017

CLIENT INTERFACING

What we should be doing is looking at what the best people in consumer-orientated industries are doing with technology There will be some people that don’t want to interact in any way other than the old fashioned way, and that’s fine, but your digital native will expect to do everything on a tablet or mobile phone. They won’t say that it’s amazing, as frankly it is what they’re getting in every other business and industry. However, I believe that they are currently getting an experience that is slightly archaic.

Q A

Are there types of automation currently being utilised by other industries that could benefit insurers?

One of the massive advantages will be the use of robotics in terms of handling simple queries. If you go back ten years or so, I remember when I came into claims and we were doing some analysis of the calls that we received; eight out of ten people were calling just to check on the progress of the claim. Yes, you can do that online, but sometimes you just want to pick up the phone.

For example, Amazon’s Alexa is a device that you can speak to and get it to do certain tasks; it is much more convenient.

What we should be doing is looking at what the best people in consumer orientated industries are doing with technology.

The other aspect is that we need to build interactions for our customers, rather than avoiding them because it is expensive or a hassle; that’s why people don’t trust insurers. If we can use this technology to find ways to interact, then that’s going to help tremendously.

Q A

How might automation change the levels and types of employment in the insurance industry?

You could argue that there are dangers this could be a fad, like offshoring. We still use offshoring, but we use it now for internally facing elements. What we found was that people wanted to speak to people that understood their social environment. If someone wants to interact with a human being and they are prepared to pay a higher price, then we need to make that available to them.

But if you are targeting the lowest possible cost of delivery, then there will be a huge use of this technology and a substantial reduction in jobs.

Where we are already using machine learning and artificial intelligence, in pricing and underwriting for instance, we’re not reducing job numbers at all. We are using that on top of what we have currently got. The world is producing ever more data, which will be built into pricing and product innovation, and there it will be doing new work rather than taking anybody’s job away.

need to sell more than that promise to pay, and we need to be working out what our customers want and then delivering that to them. I believe that by better understanding the technology it will help us to come up with new ways of being able to offer a better service.

When we talk about connected homes, there is the argument that the insurance that you currently buy will not be fit for purpose going forward. I wonder if what we need to be providing, going forward, is a broader service of which insurances parcel it all together. To do all of that, we will clearly need to be using those automation technologies much more than we have in the past. Although the majority of this work may be done automatically, the proposition, development, fulfilment and structure that falls outside will need to be done by human beings. I believe that the claims space will be one of the biggest areas impacted.

Q A

How will Grace improve the service AXA offers to its customers?

It will hopefully transform what customers think about AXA. Rather than just getting customers to pay for something that they never see any benefit from, they will immediately have an interaction with something that AXA is providing. They will feel that they are getting value, and that then begins to transform the relationship. There will be a massive cost saving for people that are using Grace. The fact that they have it available so easily will cause them to use it.

A lot of the problems that we see, in all areas of businesses that we interact with, could be avoided. If it is slightly inconvenient to get that advice, or it is expensive or complicated in some way, you don’t do it. I think Grace provides not just a cost efficient solution, but it encourages people to use it, and that will transform and benefit businesses.

Q A

What other types of automation will AXA seek to adopt in the future?

We are looking at all sorts of technology, such as autonomous vehicles. We are involved in three government-backed consortia specifically looking at driverless cars. We are trying to understand the technology and the benefits there because we believe they will deliver safer roads. We think that will bring down premiums and that is something we should be encouraging.

DAVID WILLIAMS is Technical Director at AXA Insurance.

As an insurance company, we want to do more than being someone that you just pay some money to from time to time; we want to become a true partner with our customer. We

March 2017

Modern Claims 07

“What is the meaning of Equality?�

One result.

One answer.

Visit rradar.com/grace for more information