Video Quick Take: Crawford & Co.’s Rohit Verma on Why Digital Transformation Needs to Happen in the Insurance Industry


Julie Devoll, HBR
Welcome to the HBR Video Quick Take. I’m Julie Devoll, editor for special projects and webinars at HBR. In this episode, we’re joined by Rohit Verma, CEO of Crawford & Company. We’ll discuss digital transformation in the [insurance] claims sector. Rohit, thank you so much for joining us today.

Rohit Verma, Crawford & Co.
Thank you, Julie. It’s a pleasure to be here.

Julie Devoll, HBR
Rohit, what makes digital transformation such an important focus right now in the claims industry?

Rohit Verma, Crawford & Co.
Well, Julie, digital is everywhere. But if I were to pick specifically on claims, I would say that there are three factors that are driving the push toward digital. The first one is that we’ve got a real demographic cliff that is facing us.

A significant portion of claims professionals are eligible to retire today. And more of them will be eligible to retire next year and the year after. And we are truly at risk of disruption due to the unavailability of qualified staff in the industry. So having digital solutions that can help us stem that is extremely important.

Second, you have the changing consumer mindset. Consumers today can do all aspects of their life digitally. They can buy groceries, they can manage their financials. Even some of the tasks that they’re required to go to the bank for, like depositing a check, they can do on their own. So it’s only a matter of time before their expectations for claims and insurance will be similar.

And finally, several studies, including a recent one from McKinsey, have shown that insurance as an industry has seen the least amount of operational efficiency. And we believe that this has largely been the result of lack of adoption or slow adoption of digital in the back office. So those three factors make it extremely important for digital to be at the forefront of claims today.

Julie Devoll, HBR
How fundamentally, would you say, is this changing the way the claims management sector functions?

Rohit Verma, Crawford & Co.
It is going to change the function considerably. Again, if you look at digitization, we believe that the digitization of the inspection process is going to be critical today. There’s a lot of workforce deployed who actually go and physically inspect buildings and claims outside.

We believe that by digitizing, we will be better able to leverage data. Digitized data can be used for analytics, inside development, decision making, and so forth. And finally, we’re seeing early signs of AI-based adjudication, but I believe that’s extremely nascent still and needs a lot more work.

Julie Devoll, HBR
So how is the shift changing the customer dynamic? And what does that mean for Crawford?

Rohit Verma, Crawford & Co.
Customers are becoming more and more inclined to having their results come to them pretty fast. If I have a house where the roof is broken and water’s coming into my house, I want that done pretty fast, fixed pretty fast. Also, customers want to make sure that they can actually talk to someone because [submitting a] claim is a very emotional experience.

But they don’t want to talk to someone to slow down the process. They want to talk to someone to understand what’s going to happen, how fast the claim can move, what the experience for them will be, and what the process for them will be. So I believe that consumer demand is changing pretty significantly. And as we see more millennials start to buy insurance, as they’re entering into this space, I think you’re going to see that monumental shift come and be accelerated even further.

Julie Devoll, HBR
What do you see as the greatest impediment for any organization to realize its digital vision?

Rohit Verma, Crawford & Co.
The biggest impediment that I see organizations have, having consulted too many insurance companies in my past, having worked at an insurance carrier in my past, and now as a service provider working with several insurance carriers, is one mindset. Do you have a mindset to change? Do you have a mindset to shift from being a digital migrant to being a digital native?

We in the insurance industry are really digital migrants. We started our work on paper. I still remember that time, talking to adjusters, and underwriters used to talk about the first time a computer came into their office in the ’80s and ’90s. And it was an office of 20, 30 people, and one computer being there.

And they all wondered what they’re going to do with the computer. So we are as an industry, digital migrants. So I think the mind shift is really important. Second, having a clear agenda for digital—doing digital for actual simplification of what you want to do with your customers, or what you want to do with your employees, or the value that you want to create versus doing digital because it’s the new thing to do.

And third and finally, who has the mantle for driving digital transformation? Is it the CEO? Is it a chief data analytics officer or a chief data officer or a chief digital officer? Or is it embedded in the transformation agenda of a BU leader? And I think having that clarity of roles and responsibilities is extremely important.

We at Crawford have embedded it as a transformation agenda item for our business unit leaders, led directly by me working with them. For us, we know that our digital journey is really important. So that has to be driven from the top across the business and not by someone specific sitting outside the business.

Julie Devoll, HBR
How has the Covid-19 pandemic and the transition to remote working accelerated digital transformation in the claims sector?

Rohit Verma, Crawford & Co.
It’s not just for the claims sector. I would say it’s for broad business all around, right? If you talked to any CEO, or CIO for that matter, and you said you want to work 95% or 99% of your workforce remotely, their answer would have been, it’s a two-year-, three-year-long project. You need HR involved because you need new policies. You need infrastructure involved.

And most companies, including us, did that in less than two weeks. We moved 95% to 96% of our workforce to being remote. And when you do that, you also have to think about what processes need to change.

And there has been a real acceleration in that process. You know, 12 months ago—maybe not 12, but maybe 14 months ago or 16 months ago—if you asked someone, is a global pandemic on your list of top three risks, some of them may have had it. But I can tell you that most people whom I talk to didn’t have that in their top three risks.

They had it in their top 10 somewhere, particularly after the avian flu outbreak a few years ago. But having a global pandemic of this scale was not on anybody’s list. I think that those things have changed today, and the pandemic is a major risk that everybody will have for the foreseeable future, even when we are into this new normal.

And to really get over the pandemic, digital will be a key piece. We’re doing a lot of our inspections remotely using handhelds, using other remote sensing technologies. And we believe that the movement will continue.

A simple stat: Before the pandemic, we had a 6% or 7% take-up rate on a self-service app. Within two months of the pandemic, that went up to about 35%. So we’ve seen a pretty clear and organic increase in the use of remote tools and self-service tools as a result of the pandemic.

Julie Devoll, HBR
Then what new skills must be introduced? And how do we create a working environment that enables these skills?

Rohit Verma, Crawford & Co.
If you have to move to digital, like I said, you first need to make sure that you have someone who is driving that. In our opinion, it should be the business unit leader who’s driving digital. The second skill set, what I call it, is business architecture. It’s not a term that is often used.

But business architecture is that as you think about your business, and as you think about digital as a new enabler, how will you architect that business? Why would it look different? How would it look different? And I believe that’s a skill set that’s interesting because it really takes someone who understands technology and understands detail business and can bring it together. And that’s something that we’ve done, where we’ve invested in a few leaders, where we’ve put them in roles where they’ve spent time in the business, they’ve spent time in technology, and now they are truly becoming the business architects for us as we think about this new normal.

I think another thing is change management. Today, we have many generations who are at work and, I mentioned this before, where you have digital natives and you have digital migrants. How you bridge that gap, how you bring them together, and how you drive that change agenda are extremely important.

I speak with a number of chief claims officers who are driving this transformation agenda. And a big thing for them is how they manage change. So those are probably the few things, I believe, that will be extremely important, relevant, as we move toward this.

Julie Devoll, HBR
The industry is populated with many of those who aren’t digital natives. How do you bring them across the aisle?

Rohit Verma, Crawford & Co.
Constant communication. Constant communication of why. Why are we doing it? Why does it matter? What is the impact it’s going to have on our value proposition? On our customers?

I think that message has to be continuous. And again, that’s the reason why, I believe, it has to be driven by the CEO or a business unit leader. Because they have to make sure that the business rationale for moving to digital is clear to everybody and that everybody understands that this isn’t a new project, this isn’t a one-time thing that we’re doing, but this is a new mindset that we’re moving toward. And you either have to get on the bus or you have to decide that this is not a bus you’re going to board.

Julie Devoll, HBR
As an organization with over 9,000 employees around the world, how do you ensure that you strike the right balance between digital efficiency and hands-on experience?

Rohit Verma, Crawford & Co.
There’s a lot of literature that has been written and studies that have been done. And there’s also discussion that digital will eliminate the insurance adjuster or digital will eliminate some insurance professionals. I personally don’t believe that.

I personally believe that digital is going to change the way we work, but it’s not going to eliminate the work we do. Because the work we do is… like I said before, [submitting a] claim is an emotional experience. And having an actual person, who can demonstrate empathy and can talk to you, is extremely important.

So as I think about the 9,000 people whom we have, my discussions with them, which I have often, and my focus on them is to see what is our envisioned future, what is the new ecosystem that we’re going to operate in. And as we think about that new ecosystem, as we think about that new envisioned future, digital is going to simplify that ecosystem and really help us reimagine that ecosystem. And if we don’t participate in that, then we will miss the boat. So that’s the messaging that has been going to our 9,000 people who are behind this digital transformation that we’re undertaking. And frankly, they themselves have been champions of this when they’ve been pushing us to say we need to be digital, we need to make sure that our value proposition is differentiated against our competitors’.

Julie Devoll, HBR
What is the potential in the claims environment that digitalization has yet to unlock in your view?

Rohit Verma, Crawford & Co.
Well, I think digital has a lot to unlock. Let’s take an instance today, where an adjuster would have to potentially spend hours at a home that has been damaged by, let’s say, a tornado or a windstorm, doing external measurements, getting on a ladder, and probably spending two, three, or four hours sometimes at a location to do that. But now we have technology that lets them take seven or eight pictures from different angles of the house.

And it would render a complete 3D sketch for them, which would include measurements, which would include even what type of construction it looks like, almost do a report for them. And that’s a huge unlock for us.

Second, many people know that we have a company that we acquired a few years ago, WeGoLook, which allows us to deploy resources to remote sites. Our average driving distance in the U.S. is just over 10 miles now. So we can really deploy staff, a lot of staff, very quickly at locations because they are digitally enabled.

We pass them the assignments through their mobile phones. They’re able to look at the assignments. Sometimes, we can pass them a short training video if there’s a specific thing that they’re looking at. They can go to that site within a matter of hours, as opposed to days, get the pictures taken, and get them to our desk adjuster, who can then start working on them. I think there’s a huge potential to unlock.

There’s also a potential to unlock in terms of leakage. Right now, any chief claims officer would tell you that their biggest concern is leakage. There’s a huge potential to unlock customer satisfaction because your speed of adjusting the claim moves faster. And again, if you talk to any chief claims officer, they will tell you that the longer a claim takes, the more expensive it becomes.

And then finally, there’s an element of policy retention. If you are able to satisfy the customer in their greatest hour of need, when they’ve had a claim, in terms of the quality of the claim handling, the responsiveness of the claim handling, then you get to retain that customer. And one of the biggest costs in the claims industry or insurance industry is customer acquisition.

So I believe those are all pieces that get unlocked as we move to more and more digital solutions. But we can’t do that at the cost of empathy and the human touch that are so important. I just want to make sure that I continue to underline that.

Julie Devoll, HBR
Rohit, this has been a great discussion. Thank you so much for joining us today.

Rohit Verma, Crawford & Co.
Thank you, Julie. I really enjoyed talking to you and I look forward to seeing you again soon.

Julie Devoll, HBR
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