What does market-leading online claims management look like? | Insurance Blog

Recently, many leading insurers have used transformational solutions to improve their cyber products. With the proposed internet insurance market double to $29B by 2027we examine what constitutes the best online claims management in the market.

In this blog we will explore the complexities of cyber claims handling, the key skills that claim adjusters need, and the steps insurers must take to achieve success in cyber claims management.

The complexity of online claims

Online coverage covers a wider range of risks than most other insurance products:

1. First group placement: This includes damage to devices, damage to networks, damage to physical assets, and damage to digital assets. It also covers damage or theft of intangible assets, theft of funds, and costs associated with recovery, restoration, and repair. Financial losses due to business interruption, loss of business opportunities, reputational damage, ransomware, and fraud are also included. Additionally, costs related to investigations, notifying affected third parties, and damages to intellectual property such as patents and trademarks are covered.

1. Third party reports: This coverage includes contractual and legal liability, regulatory procedures, and multimedia liability. They also include civil damages, compensation, loss of payment cards, errors and omissions, technical liability, mixed liability, and network security and privacy liability.

If the policyholder for a comprehensive internet product is a large international business with B2B and B2C customers, handling a potential large claim becomes more difficult for claims adjusters. Cyber ​​claims, like oil spills, are catastrophic in nature, recognize no geographic boundaries, and are constantly evolving and unpredictable. Cyber ​​breaches can negatively affect businesses, communities, and critical national infrastructure, including hospitals, water and sanitation systems, and airports.

However, the complexity goes further. Cyber ​​claims pose unique challenges to today's claims adjusters due to the complex technical nature of claims, involving IT systems, both tangible and intangible assets, cybersecurity principles, digital forensics, and the ever-changing legal and regulatory environment regarding data protection, AI protection. , and privacy legislation in all affected areas.

In addition, a cyber claims adjuster must have the ability to teach and manage a team of diverse professionals, from IT forensic experts, data experts, and forensic accountants to credit monitoring experts, breach consultants, public relations experts, risk management experts, and – ransomware. attacking experts.

Cyber ​​claims processing skills

Online claims processing skills are multi-faceted and require a detailed understanding of various aspects:

Information Requirements: An online claims adjuster should have advanced, industry-recognized qualifications and typically have a background in Errors and Omissions (E&O), Commercial Liability, Political Risk, and/or Risk Management. They need practical knowledge of implementing first and third party cyber coverage, booking, assessment, and risk management processes, often gained from previous roles in cyber claims or representing brokers.

Experience Requirements: The industry is facing challenges due to limited talent. It is important for adjusters to understand the roles and responsibilities of the various professionals involved in cyber claims. Their practical experience is essential to effectively supervise and manage these professionals to ensure quick response to claims, effective mitigation measures to prevent further losses, and complete settlement of claims. Cyber ​​claims have grown in complexity and volume, but many adjusters come from business helplines. A critical skill often lacking is expertise in IT systems, cybersecurity principles, digital forensics, intangible assets, and a deep understanding of the ever-changing laws and regulations across IT, AI, GDPR, and consumer privacy. This is especially important if the insurance involves technology-based companies, where coverage is often loose and extensive.

Performance Responsibilities: Adjudicators must effectively determine the existence, cause, and scope of violations and perform critical duties in the management of online claims. This includes selecting and managing the appropriate incident response team, assessing ongoing or completed breaches, assessing the impact on the customer's business and assessing cyber security breaches. It also includes responding to compliance with current data protection and privacy laws, identifying and responding to fraud triggers, and providing feedback on documented risk controls and actuarial tables.

Customer Segment Information: Knowledge and experience with a range of customer categories, from SMEs to customers of large international companies, is also essential for an online claims adjuster. Because Cyber ​​is a rapidly emerging product and at scale in many other lines, insurers are faced with the difficult question of whether to structure their Cyber ​​claims team as a line of business CoE or whether to stick with existing CoEs focused on SMEs, mid no- market, clients from many countries etc.

Emerging risks and challenges

The task of determining the existence, cause, and scope of a breach is becoming increasingly difficult due to the extensive coverage of cyber insurance, the rapid evolution of the technology and data landscape, the catastrophic and systematic risks associated with the breach, and the implications of Gen AI. Gen AI presents new opportunities and challenges, improving capabilities for both cyber attackers and defenders, resulting in sophisticated attacks almost every day.

Strategic options for market leadership in cyber claims

In conclusion, there are four key areas to address:

1. Insurers need a claims application that supports adjusters in the effective management of an incident response team and experts. The application requires cyber qualification, which means extensive master data management to organize data points related to 100+ online applications and specific expert permission to access documents.
2. Insurers need a comprehensive and continuous development plan to stay abreast of evolving cyber risks, technological changes and especially the opportunities and challenges that Gen AI represents.
3. Insurers need a comprehensive cybersaferoom that provides a secure environment for pre-incident advice and training, incident response planning, notification services, etc. The security room should have appropriate guidelines that support engagement with independent breach counsel.
4. Insurers need continuous feedback on key claims data that informs actuarial tables and risk controls in underwriting. Market-leading insurers achieve this through growing infrastructure and architecture, so that technical rates across all variables are informed in real-time based on loss history.