Just in time claims system upgrade helps Sasria manage ‘nightmare’ riots
South Africa’s special risk insurer Sasria modernised its claims processing systems at the end of 2020 – only months before the most expensive riots ever put massive strain on the entity.
This emerged during a webinar hosted by Guidewire Software and Hyland, in partnership with ITWeb this week.
Themba Sibiya, strategy manager at Sasria, said: “The July riots in KwaZulu Natal, Gauteng and to a lesser degree in Mpumalanga were a nightmare. In terms of costs, the Fees Must Fall protests saw us paying around R300 million in claims, and service delivery riots – which account for around 80% of our claims – cost around R800 million to R1 billion a year. The July riots are expected to cost around R30 billion, making them the most expensive in the world.”
Fortunately for Sasria, the insurer had recently completed the migration of its claims systems from legacy systems to an advanced automated system from Guidewire when the riots broke out.
Said Sibiya: “We had a 16 year old legacy system in place and wanted to modernise it with a cloud based system with APIs, which could handle large volumes of claims and large numbers of people working on the system. We implemented the claim centre solution first. The benefits of this included automation, document management, geospatial features, straight through processing and APIs, which support integration with our finance, mapping, bank, document management and vehicle values systems.”
Replacing a significant amount of manual work, the new system allows Sasria to link with banks to confirm client accounts, reducing the fraud risk; and with straight through processing functionality, claims under R50,000 are paid almost automatically with little human interaction. Geospatial features allow Sasria to identify where claims are from, giving them the ability to spot and investigate any outliers. “Where it once took almost 20 minutes to register one claim, it now takes three minutes,” he said.
This stood Sasria in good stead when the riots broke out. By the end of August, Sasria said it had registered over 95% of the claims and settled over R2 billion in small and medium claims, and a month later, over R5.8 billion in claims had been paid, with all claims under R1 million settled. Sasria expected to have settled 80% of all claims between R1 million and R30 million by the end of October, and said it aimed to ensure that at least 30% of total claim value for claims over R30 million was paid in the next few weeks.
“For us it was do or die. If we didn’t bite the bullet and go big bang with this implementation, we’d be drowning now. You’d be seeing us on the news for all the wrong reasons. By the time the riots hit us we were already on the system and had dealt with any issues,” Sibiya said.
Rene Schoenauer, director of product marketing for EMEA at Guidewire Software, said: “Events such as this unrest underline how important insurance is. Major unexpected events such as riots and natural catastrophes are emotional moments for people, and insurance needs to be there for them.”
He noted that customer expectations of insurance were changing: “It is expected to be simple, convenient, transparent and fast. Traditional systems struggle to keep pace with changing customer needs: they are challenged by under-informed claims decisions with limited data and analytical capabilities resulting in increased cycle times and leakage. Traditional systems also have limited claims automation and integration challenges, hampering claims innovation.”
Schoenauer said embedded analytics, automation and integration of insurtech apps enable insurers to continually innovate in claims, with the next evolution of insurance to providing advanced solutions in a cloud-led model to enable continuous innovation.
Kyle Blair, leader of the Global FSI Practice at Hyland Software, a document management partner of Guidewire, said: “Through the large global customer base we work with, we have identified some keys to success to responding to change. Organisations that are most successful in moving from legacy to this future proof state focus on critical journeys; empower a ‘complete view’ of data, workflows and even unstructured data; and invest in experience to reduce risk.”
“We find there are three areas most important: multi-channel capture to support engagement on any channel the customer wants to use to do business with you; automating certain steps such as activity creation; and leveraging side-by-side access with the core system to elevate the employee experience and improve the customer experience. Examples of this include email integration, with social media platforms and even text messaging integrated, with easy ways to archive and share that information and make sure it’s instantly available from the core platform,” he said.
Another example is automated notifications with priority alerts; and side by side viewing to ensure that decisions are made based on complete information with full claim data, policy information, evidence and all related correspondence. Said Blair: “System silos are still a challenge for most insurance organisations today, and we want to eliminate these to combine key information assets to reduce delays in decision making.”