Claims transformation should be about more than making processes faster and cheaper. Andy Stevenson explores five steps to help claims leaders challenge assumptions, prioritise the right opportunities and ensure transformation delivers lasting value for customers and the wider business.

Claims transformation is all about the dilemma of needing to solve the problems of today whilst providing the right solution for the opportunities of tomorrow.

Many claims transformation programmes begin in the same well-intentioned place: shorten cycle times and reduce overall effort and cost for all parties. These objectives benefit both customers and providers and naturally lead to ambitions around digitising journeys and automating processes to make claims handling faster and better.

But are these necessarily the most important opportunities to pursue? Are they conclusions drawn from evidence, or assumptions based on conventional thinking? And will solutions that are available today still look like the right solutions in one, three or five years’ time?

Today marks the point at which technology is the most advanced it has ever been, but it also marks the point at which technology was the least advanced when we look back to today from the future: how far away is operationalising quantum computing?

Ultimately, these questions can be distilled into a single challenge:

How certain are we that we are solving the right problem?

Claims organisations are sophisticated in measuring and optimising the metrics that run the operational business today. They generally know what is working well and what might improve if changed. However, they may have less depth relating to customer experience or long-term effectiveness, making it harder to know with confidence whether transformation activity is addressing the most important opportunities.

The danger is that transformation becomes a race towards efficiency whilst losing sight of effectiveness, despite effectiveness potentially offering the greater long-term opportunity. Clarity on the exact reason for the investment should be achieved prior to defining the transformation activities.

Step 1: Prove You Are Solving the Right Problem

Customer centricity is often at the heart of transformation initiatives. However, obtaining evidence about what actually matters to customers, and how this influences their choices, is complex.

The objective of managing a claim is not just achieving an operational outcome but also understanding and providing the activities and experiences that create customers who are loyal and who advocate for the business.

An individual customer’s circumstances and values can materially influence how a service is perceived. As a result, some commonly held assumptions, such as ‘digital, faster and self-service are better’, may not always hold true. Healthcare embodies this as ‘treat the patient, not the injury’. Prior experience is great, but it needs to be applied to the specifics, not generally.

There may be deeper emotional drivers with a stronger influence on how customers remember an experience; respect, inclusion, confidence and reassurance, for example. Understanding these factors could unlock more powerful outcomes, but that intelligence needs to be gathered deliberately and interpreted carefully.

Listening to customers provides the strongest starting point. Surveys, social media and other feedback mechanisms all offer valuable insight. The challenge is that these channels are often dominated by extremes. One-star and five-star opinions naturally attract attention but may not accurately represent the broader customer experience. There is a temptation to react strongly to complaints to ‘fix’ and make sure it never happens again, but this should be a measured approach so that the wrong levers aren’t pulled too hard.

At the outset of determining a customer experience strategy, the most important test is knowing whether the right questions have been asked before using the data to direct transformation activity. This approach helps avoid confirmation bias of easily believing what we thought we already knew.

Step 2: Reframe Claims as a Strategic Asset

The activities of a claims function are often described as “processing claims”. While convenient, this description is both reductive and misleading.

Claims clearly have an operational role, but their strategic value is far broader. It manages what is often the largest outflow of cash from the business. It controls what is frequently the largest risk to the balance sheet. It represents one of the most important customer contact points and therefore one of the strongest influences on brand perception.

Claims also own the richest source of intelligence regarding how products perform in the real world. Viewed through this lens, the transformation opportunity becomes much more significant.

Claims transformation can enable earlier identification of emerging risks, improved visibility of product weaknesses, deeper understanding of systemic customer issues, optimisation of supply chains, better insight into loss trends and stronger understanding of how wider socio-economic events impact portfolios.

Technology can provide many of these capabilities within the claims function itself, but the greater opportunity often lies in creating stronger feedback loops between claims and the rest of the enterprise.

Galvanising the organisation around this broader perspective helps make investment in claims transformation more understandable and more widely supported. There is much more at stake than building a leaner claims operation; we are not seeking to make claims cheaper, but instead more valuable.

The opportunity is to recognise the full value of claims transformation so that the full benefits can be realised before seeking investment.

Step 3: Form a View of the Future Before Choosing Technology

There will always be a next-generation technology around the corner. Whatever is delivered today will, in some respects, appear outdated tomorrow. Yet technological choices still need to be made to solve problems and achieve business objectives.

The rapid evolution of AI has intensified this challenge. Organisations increasingly find themselves trying to determine what should reasonably remain human work in the medium term and what can ultimately be delivered through technology alone. But this is not primarily about the actual doing of work, but about how decisioning is best done.

Answering this question helps to shape our thinking around what a future claims platform needs to do. Does it need to manage documents? Does it need screens for humans to navigate information? Is there a need to build extensive control dashboards? Or will AI undertake much of that activity independently, consistently, within regulatory and policy guidelines, quietly in the background?

Similarly, what will the future claims workforce spend its time doing? The discussion here may not be what AI can do, but what humans are uniquely able to do.

Importantly, assigning more responsibility to technology does not automatically imply less human interaction. In many cases the opposite may be true. The delegation of processing and decisioning activity to AI may create more time for valuable human engagement; leadership, development, cultural alignment, relationship building, negotiation, areas where humans look like the most appropriate technology choice.

Organisations do not need certainty about the future to move forward. However, having some firm opinions about the division of responsibility can provide significantly greater confidence before making any decisions on the deployment of technology.

Step 4: Prioritise for Impact, Not Just Process Flow

Breaking transformation into smaller initiatives makes sense. When we consider large, multi-year programmes that deliver little visible business change until completion, our appetite is understandably limited.

The temptation within claims is often to follow the claim lifecycle and treat this as the natural transformation roadmap. This usually creates a linear sequence beginning with claim notification, progressing into investigation and beyond.

However, from a prioritisation perspective, there may be more impactful places to begin. One example might be focusing on the portfolio of claims that is already open. Improvements implemented here can potentially benefit every relevant existing claim immediately, rather than applying enhancements one claim at a time into the future.

In this way, improved access to claim information, better customer updates or supply chain enhancements offer a much faster and broader impact.

When deciding what to transform first, customer pain points and internal frustrations are often used as guideposts. These can provide valuable insight, but it is important to recognise that they are primarily evidence of what is not working today. The question is whether the objective is simply to repair a broken process or to create a genuinely transformed way of working.

The mindset that identifies today’s problems is not always the same mindset needed to design tomorrow’s solutions. Organisations are often asking the people who are best at doing a job today to reimagine a world where that job no longer exists. The typical transformation team is assembled for its expertise, like experienced practitioners, technologists and change professionals who understand the current operation in depth.

This knowledge is invaluable in understanding where the organisation is today and what constraints must be addressed – but expertise can also create limitations. Previous failures can discourage exploration, familiarity can narrow perceptions of what is possible, and attachment to current operating models can unconsciously shape future designs.

The simplest way to address this problem is to collaborate across teams and expand the diversity of perspectives at the table. Building new partnerships across the claims spectrum can provide valuable insights, finding new solutions to existing problems. Crucially, the customer is often underrepresented in these discussions, with their perspective provided by proxy rather than direct involvement. But focusing on perspectives from outside the industry, or outside the function, can unlock more breakthrough thinking.

Step 5: Prevent Transformation from Drifting Off Course

Even where organisations clearly understand the customer challenge, recognise the strategic opportunity, have formed a vision for the future and identified sensible priorities, delivery still needs to be navigated carefully.

Complex initiatives involving many stakeholders often develop equally complex governance structures. In some cases, information becomes confused with insight and direction.

Steering groups commonly adopt familiar mechanisms, such as update packs, RAG status reporting, risk logs and action trackers. These are established tools and proven approaches, but their value is not in the artefact itself. Their value depends heavily on how effectively they are used and whether the right voices are genuinely being heard.

Several dynamics can help decision-making teams remain effective:

Focus on what remains to be done
Progress reporting often concentrates on completed activity. In reality, the most valuable discussion is frequently about what has not yet been done, because that is still capable of being influenced and improved.

Be clear about what is needed
The volume of information presented to governance groups can make it difficult to identify the issues that genuinely require attention. When decision-makers feel they have to hunt for the issue, trust and dialogue begin to erode. Required decisions and outcomes should be clearly signposted to avoid these challenges.

Provide a neutral perspective
Supplier interests, reporting structures, political considerations and previous investment decisions can all influence discussions. Creating space for a neutral perspective can help ensure alternative viewpoints are explored appropriately. What should be tested is not whether the information exists, but whether the people making decisions genuinely understand its implications.

Conclusion

The next phase of claims transformation is unlikely to be defined purely by task automation. Instead, it will increasingly focus on how technology supports better decisions and how those decisions ultimately improve customer and financial outcomes.

The organisations that succeed will stop viewing claims as a process to optimise and start viewing it as a source of customer understanding, operational intelligence and competitive advantage. These organisations will rely on customer feedback scores as indicators of success, becoming better at understanding how decisions influence outcomes and what genuinely drives customer behaviour.

At the same time, traditional boundaries between claims and underwriting begin to blur. Both functions are critical for pricing, product evolution, supplier performance, portfolio management and outcome analysis. At the same time, new opportunities emerge to rethink how work is divided between technology and people.

The question for claims leaders is therefore not simply how to automate more activity. It is whether they have enough confidence that they are solving the right problem in the first place. Whilst there is risk in moving too slowly in transformation, there is potentially more risk in moving quickly in the wrong direction.

Andy Stevenson Partner in the Consulting & Technology division of Davies