SMA LT Claims Perspective 02-11-15 FINAL

Claims Transformation: New Benefits via New Paths
© 2015 SMA All Rights Reserved www.strategymeetsaction.com Page 1
An SMA Perspective
Claims Transformation:
New Benefits via New Paths
Featuring as an example:
L&T Infotech
An SMA Perspective
Author: Denise Garth, Partner
Published Date: February, 2015
This perspective is based on SMA’s ongoing research
on transformation and modernization in insurance.
L&T Infotech has purchased distribution rights.

An SMA Perspective
Table of Contents
The Changing Face of Claims Transformation 3
Required Business Capabilities 4
Modernization 4
Optimization 4
Innovation 4
Required Technology Capabilities 6
Modern Architectural Foundation 6
Capabilities for Claims Transformation 7
About L&T Infotech 8
L&T Infotech Company Overview 8
Breadth and Capability 9
Strategy Meets Action Commentary 10
About Strategy Meets Action 10
About This
Perspective
This SMA Perspective is
a summary of SMA’s
ongoing research on
transformation and
modernization in
insurance.
L&T Infotech has
purchased distribution
rights for summary
results of selected
research and opinion.
This is not paid-for
research.

An SMA Perspective
The Changing Face of Claims Transformation
The digital revolution is driving transformation in every industry and having major impact
on every process and every interaction. Insurance is no exception. The implications for
the industry are profound, opening the door to new possibilities for success, creating new
opportunities to engage and delight the customer, providing new options for collaboration
and partnership, enabling new products and services, and even offering new concepts for
and approaches to risk management. Digitalization and emerging technologies are
changing the game. And, there are major implications for the claims arena – the area of
the business that represents the moment of truth for the customer, the point where the
insurance company’s promise is experienced.
Embracing new technology is no longer a choice. It is a business imperative. For most
insurers, tangible and far-reaching transformation is required – a shift in traditions and
thinking. Transformation takes a holistic approach, involving a reevaluation of traditional
claims business assumptions and models, identification of new ways to deliver an
exceptional customer experience, the definition of innovative and optimal ways to manage
risk, and consideration of the supporting IT systems and delivery mode.
It is no longer enough to implement a modern claims system that just speeds up existing
processes, streamlines existing transactions, supports existing products, and automates
current behaviors. Leading insurers must find inventive ways to extend modern claims
operations. Hence, they are capitalizing on new tools, technologies, and data using
mobile, cloud, collaboration, smart analytics, third-party data, geospatial intelligence,
Internet of Things (IoT), drones, aerial imagery, and more – all with the mission of
optimizing today’s business and innovating for tomorrow’s advantage.
This shift empowers changes in fundamental business assumptions and behaviors that
create substantial and meaningful changes in outcomes. The basic management focus of
claims moves from a reactive response to proactive care and avoidance of loss. The claims
mindset shifts from pay-the-claim fast to mitigate and/or prevent the risk and eliminate
and/or reduce potential damages. Emphasis shifts to engaging and providing real value
to the customer with new services by helping manage, reduce, or eliminate their overall
risk. Response to catastrophic events is proactive, with overt actions that save lives,
secure properties, minimize damage, and comfort customers.
Insurers investing in claims modernization are creating a transformational foundation with
the future in mind. It is an investment in creating greater business value and competitive
differentiation. By providing a platform for capitalizing on the possibilities, it becomes
feasible to incorporate maturing and emerging technologies that help insurers make
essential changes in the way they interact with their partners and customers. The
integration of advanced analytics to improve and gain new insights is made easier. These
insights can then be used to manage the risk portfolio proactively while servicing claims
in innovative and engaging ways.
The result … insurers are positioned to transform their business models to predict rather
than detect, to alert rather than react, and to prevent rather than restore. Modernization
and transformation enable the delivery of new value propositions and leading-edge, value-
added services that encompass safety, security, protection, mitigation, prevention, and
more.
Digitalization and
emerging technologies
are changing the game
in insurance – opening
up new possibilities for
success. Insurers are
creating greater business
value and competitive
differentiation with
investments in claims
modernization,
optimization, and
innovation.

An SMA Perspective
Required Business Capabilities
Transformation of claims requires a comprehensive understanding of the business and
technology trends that are influencing the evolution of business capabilities for the entire
claims value chain. Insurance companies should view and assess their claims processes
and operations with both an inward and an outward focus. This requires extending the
historical focus on internal operational efficiency to claims effectiveness across the entire
claims value chain, including interactions with supply chain vendors, business partners,
data providers, and customers. These comprise the very connections that play an
increasingly important role in redefining claims outcomes.
Modernization
Today’s digital reality demands that legacy business assumptions, processes, and
information points, as well as systems, technologies, infrastructure, and IT delivery
methodologies must be upgraded or replaced. Claims transformation is much more than
just replacing legacy with a modern core claims system.
Transformation requires establishing a flexible, agile, and scalable foundation that enables
business capabilities to be quickly updated or extended, positioning claims for optimization
and innovation. In today’s competitive environment, claims modernization has become a
table-stakes business requirement.
Optimization
Once a foundational modern claims environment is established, insurers can begin the
optimization of the environment, moving beyond basic efficiencies to notably improved
effectiveness. In an optimized environment, internal and external claims workflows are
enhanced and streamlined. Mobile and self-service capabilities are created. Portals for
collaboration of all parties are implemented. New data sources and analytics are
integrated into the business processes to enable enriched decision making. Together
these new capabilities redefine customer engagement.
Optimization accelerates the insurer’s progress along their transformation journey. It
gives them the ability to reach higher levels of excellence. It gives them the power to
optimize the business in many varied ways, from how decisions are made to how work
gets done, how services are delivered, and how interactions are managed. An optimized
claims environment positions for innovation.
Innovation
An optimized claims operation facilitates the integration of maturing and emerging
technologies to create an environment that radically transforms claims. Leveraging the
Internet of Things (IoT) can help with risk mitigation and even eliminate risk while
creating new services that generate new revenue. Drones and aerial imagery can provide
real-time data for faster alerts and claims assessments. Advanced analytics can decrease
fraud, enhance risk management, speed claims assessments, and maximize supply chain
efficiencies. Innovation is the game changer – creating competitive differentiation,
Transformation of claims
requires a focus on
effectiveness across the
entire claims value chain
using both an inward
and an outward view.

An SMA Perspective
eliminating or reducing losses and risks, and establishing customer excellence that
together position an insurer as a market leader.
Transformation is a crucial undertaking in today’s increasingly competitive environment.
Claims transformation, the journey from modernization through optimization and
innovation, impacts every aspect of the business, internally and externally. Trans-
formation enhances and redefines interactions and relationships with the customer,
product and service offerings, risk models, pricing, and business and revenue models.
Figure 1. Claims Transformation Business Capabilities
As shown in Figure 1, the critical, required business capabilities for far-reaching claims
transformation impact many areas:
 Mature claims management processes across the value chain create efficiency,
effectiveness, and ultimately competitive differentiation. Capabilities extend beyond
modernization to embrace collaboration with partners and customers, to enhance
overall risk management, and to deliver expanded value to the customer.
 Excellence in repair management combined with broader capabilities helps mitigate
and prevent loss occurrences. Requirements include the ability to integrate and
incorporate maturing and emerging technologies to better assess, manage, and
eliminate claims and risk; improve fraud detection and management; effectively
manage subrogation; and maximize salvage.
 Exceptional, compelling customer service that is personalized extends care and
concern beyond just a response. Excellence requires the ability to offer proactive
service and anticipative, value-added action.
Source: Strategy Meets Action 2015

An SMA Perspective
 An expansion of the customer experience provides channel choice through an omni-
channel environment. Customers expect more than multiple channels; they want a
consistent, compelling engagement through any channel they choose – from self-
service portals to mobile, call centers, agents, and more.
 Advancing from rules-based workflow management to analytics-driven intelligent
workflow management yields results in optimum workload balancing, smart routing,
collaboration, superior case management, and insightful decision-making.
 Maximized operations deliver efficiency through straight-through-processing,
effectiveness with optimized operations, and differentiation through embedded
analytics-based intelligence.
 Robust CAT management (the ability to proactively prepare for, assess, and respond
to both the predictable and unpredictable catastrophe situations) is augmented by
technologies such as geo-analysis, visualization through drones and aerial imagery,
and advanced analytics-driven intelligence.
Required Technology Capabilities
The modern claims solution is not a standalone system. It must integrate with other core
systems, as well as maturing and emerging technologies, to create a differentiated and
competitive claims environment. The technology environment requires a foundation that
will allow insurers to expand and extend claims capabilities as their businesses evolve and
new technologies emerge – a foundation that will help them respond to today’s rapidly
changing environment.
Modern Architectural Foundation
The claims technological foundation must be architecturally robust, with an expansive
configuration that is able to provide flexibility and adaptability to address new or changing
demands, technologies, and expectations. The foundation must also provide a robust
platform for integrating new and emerging technologies, like the Internet of Things (IoT),
mobile, aerial imagery, geocoding, collaboration, and advanced analytics.
Some of the results will be realized through improved capabilities that capitalize on the
benefits of the digitalization of claims, while creating more innovative ways to optimize
claims adjustments, detect fraud and recoveries, and collaborate with providers in the
supply chain. Other results will be apparent in the ability to better contain losses, mitigate
or eliminate risk, and gain deeper and more useful insights to enhance the customer
experience across the process.
The underlying foundation will enable claims thinking and action to transition from
reactive to proactive and from restoration to mitigation and prevention – and at the same
time create more frequent and value-added customer interactions that drive value and
loyalty.
A modern claims solution
must integrate easily
with existing and new
systems as well as
maturing and emerging
technologies to create a
differentiated and
competitive claims
environment.

An SMA Perspective
Capabilities for Claims Transformation
As depicted in Figure 2, the technology capabilities required for far-reaching claims
transformation include a variety of critical elements. Many of these involve technology
enablers that create a flexible, adaptable, and scalable environment for building,
augmenting, and expanding the foundational modern claims solution.
Figure 2. Claims Transformation Technology Capabilities
Insurers need the following technology capabilities for claims transformation:
 Modern technical architectures leveraging SOA principles accommodate plug-
and-play solutions that can be quickly integrated and deployed. These flexible
architectures facilitate the easy exchange of data from a wide variety of sources.
 Dynamic configuration capabilities enable the agility needed to manage future
demands and needs for personalized claims management, proactive FNOL, and digital
claims management.
 Platforms for easy integration of maturing and emerging technologies let
insurers capitalize on existing and rapidly emerging technologies. The ease of
integration facilitates the ability to experiment, pilot, and implement new technologies
that create highly optimized and differentiated business capabilities. For example, the
use of technology-aided collaboration allows insurers to readily and effectively interact
with agents, brokers, adjusters, and customers jointly in a real-time environment –
creating a personalized and customized experience. Another example – integration
with IoT technologies (such as sensors embedded in machinery, farm equipment,
crops, vehicles, clothing, and wearables) gathers new data and information that
opens the door to new offerings, new services, and new revenue while helping to
manage risk, loss, and customer expectations.
 Scalable infrastructures prepare insurers for quick responses and adroit reactions
to unexpected claims situations and new opportunities, and in doing so create
competitive advantage. The elasticity and agility that is required to respond or grow
with the needs of the business will be there when it is needed.
Source: Strategy Meets Action 2015

An SMA Perspective
 Dynamic integration of new and real-time data, as well as big data, will help
insurers differentiate and compete. This is a major difference-maker – one that
reshapes claims outcomes.
 Flexibility to integrate advanced analytics into the claims processes makes it
possible to significantly improve decision-making and capabilities in the area of loss
prediction, mitigation, and prevention.
 Intelligent and intuitive workflows augment rules-based workflow management
with analytics and intelligence, making the management of workflows much more
dynamic. The routing of work and the assignment of cases can be automatically
orchestrated based on accurate knowledge and even system-generated wisdom.
All of these critical technology enablers furnish a platform for creating, leveraging, and
deploying innovative approaches for the management of claims. Visualization tools,
embedded advanced analytics, automated workflows and rules, emerging technologies,
and others contribute to decision-making excellence that impacts all areas of claims at
the macro and micro levels. With change happening so fast, new options for accelerating
the claims transformation journey are essential.
Fortunately, there are new ways to make major progress on the journey in a shorter
timeframe. Some of these options are possible thanks to powerful frameworks and
blueprints that define foundational capabilities, help pinpoint requirements, and lay out a
customized transformation roadmap. Jumpstart capabilities are available in the form of
kits and solution accelerators that can help fast-track the journey.
Because the industry is rapidly maturing and gaining experience, claims expertise and
best practice insights are emerging and available to help others on their journey. Forward
thinking solution providers can offer partnership environments for achieving
transformation, with some even offering facilities that can be used as an innovation
incubator – an opportunity to experiment with, prepare for, and respond to emerging
trends and technologies.
About L&T Infotech
L&T Infotech is a fully-owned subsidiary of Larsen & Toubro (L&T), a US $14B engineering
and technology conglomerate that is one of India’s oldest and most respected companies.
L&T was founded over 75 years ago by two Danish engineers – Henning H. Larsen &
Soren K. Toubro. Over the seven decades of its existence, L&T has built a reputation for
being an organization that is financially sound, possessing a strong engineering culture,
driven by world-class process and quality standards, and governed by a values-based
management style.
L&T Infotech Company Overview
In concert with its parent’s values and culture, L&T Infotech has focused its energies on
providing premier technology services to its chosen market. With annual revenues of
about US $850M and over 18,000 employees globally, L&T Infotech is ranked by
NASSCOM (association of Indian IT and BPO industry) as the 8th largest software and
There are critical
technology enablers that
provide a platform for
creating, leveraging, and
deploying new
approaches for the
management of claims,
offering new ways to
make major transforma-
tion and modernization
progress in a shorter
timeframe.

An SMA Perspective
services exporter from India. Headquartered in Mumbai, India, L&T Infotech operates
through 14 delivery centers and 22 sales offices around the globe.
L&T Infotech is organized along industry verticals. The dedicated insurance business unit
offers a wide range of IT solutions and services across the insurance value chain. The
insurance business unit is the fastest growing vertical within L&T, experiencing a CAGR
of over 30% for the last ten years, with over 90% repeat business. With a pool of over
3000 associates serving more than 20 leading insurance players globally, L&T Infotech is
focused on the P&C, Life & Pensions, and Health market segments, delivering over 15,000
person years of work for various customers over the last 12 years.
Breadth and Capability
L&T Infotech offers a comprehensive set of services for the claims life cycle ranging from
assessment through modernization, optimization, and innovation – all grounded by a deep
knowledge of and expertise in claims capabilities across the value chain. Their claims
transformation framework provides a broad structure that includes assessment, planning,
blueprinting, realization, and optimization, underpinned by organization change
management. This framework supports their focus on four critical claims capability pillars:
customer experience, operational efficiency, loss containment, and CAT response
management. L&T’s partner network, toolkits, competency center, and innovation lab fuel
and enhance the breadth of their experience and capabilities, ensuring that the claims
transformation journey evolves to meet new business and technology trends, while
balancing efficiencies and effectiveness to redefine claims outcomes.
Figure 3. L&T Infotech Claims Transformation Framework
L&T Infotech helps insurers progress on their claims transformation journey from
modernization to optimization and innovation, enabling the delivery of new value
propositions and leading-edge, value-added services.
Source: Larsen & Toubro Infotech Ltd

An SMA Perspective
Strategy Meets Action Commentary
The claims transformation journey, from modernization through optimization, is an
increasingly crucial undertaking in today’s fast-paced, rapidly changing, and highly
competitive environment. Tomorrow’s leading insurers are implementing a modern claims
system foundation that can be extended by capitalizing on new tools, technologies, and
data to optimize today’s business while innovating for tomorrow’s leadership advantage.
L&T continues to deepen their claims expertise and capabilities, positioning them to help
insurers accelerate their pursuit of claims transformation. SMA observes an expanding
and evolving trend where insurance companies capitalize on the strengths of partners like
L&T, finding them critical for incubating and piloting new capabilities and new
technologies. These new capabilities and technologies can then quickly be brought to
market to offer value to both the customer and the insurer. Insurers that are serious
about defining and pursuing a claims transformation strategy should consider L&T
Infotech and their expertise and offerings – a framework of transformation capabilities
that can be used to guide and power their claims modernization, optimization, and
innovation journey.
About Strategy Meets Action
Strategy Meets Action (SMA) is dedicated to helping the business of insurance modernize,
optimize, and innovate for competitive advantage. Exclusively serving the insurance
industry, SMA blends unbiased research findings with expertise and experience to deliver
business and technology insights, research, and advice to insurers and IT solution
providers. By leveraging best practices from both the management consulting and
research advisory disciplines, we take a unique approach – offering an unrivaled set of
services, including retainers, research, consulting, events, and innovation offerings.
This SMA Perspective is a summary of SMA’s ongoing research on transformation and
modernization. L&T Infotech has purchased distribution rights for summary results of
selected research and opinion.
Additional information on SMA can be found at www.strategymeetsaction.com.
Contact the author Denise Garth, SMA Partner at 402.963.0198 or
dgarth@strategymeetsaction.com.
Tomorrow’s leading
insurers are
implementing a modern
claims system
foundation that can be
extended by capitalizing
on new tools,
technologies, and data
to optimize today’s
business while
innovating for
tomorrow’s leadership
advantage.

SMA LT Claims Perspective 02-11-15 FINAL

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