Allstate made headlines recently when itannounced in its Q2 earnings call that it had downsized 500employees in multiple geographies.

Allstate attributed the job losses to QuickFoto Claim, itssolution for virtual claims processing, and a cursory reading ofthe articles that followed could reasonably result in theconclusion that technology just killed more jobs.

Related: 6 trends that will change insuranceclaims

However, for those with a deeper understanding of the claimsprocess, the perception that job losses were the direct result ofimplementation of virtual claims technology does not ring true.

Tracking employee productivity is a challenge with legacy systems, so when field staff are notoptimally deployed, carriers commonly hone in on fixed cost staffresources as the problem. In reality, robust virtual methods are anopportunity to better allocate resources.

Building a successful virtual claims operation requiresattention in two major areas: change management and employeeredeployment.

Related: Liability claims: Emerging technological influencesto watch

Don't rebuild the airplane while trying to flyit.

The desire to adopt new technology is finallycatching up with the need, but insurance carriers' legacyinfrastructures pose a challenge.  Their existingtechnologies are not friendly to most of the new tools that areavailable to streamline and improve the claims workflow, sointegration is becoming more difficult at the exact same time thatpressure builds to adapt to evolving consumer expectations.

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Faced with this challenge, some carriers are making the decisionto forgo outsourcing and build virtual claims processes internally.However, the challenge with this philosophy comes down to expertiseand trade off decisions. Given the number of challenges(Distribution, Data and Analytics, Pricing, Digitization) insurancecarriers face, is there enough change management expertise totransition from traditional to virtual claims processes?

Traditional technology providers have never handled a body shopnegotiation, processed a virtual claim, or even taken a customercall. These knowledge gaps can drain carriers' resources in thelong-term.

Because they are under increasing pressure, carriers who aredeveloping solutions internally are compelled to launch beforefully developing strategies around new protocols. And becauseclaims processes are a constantly moving machine, this tactic isequivalent to simultaneously rebuilding an airplane while trying tofly it.

A more tested path to avoid "rebuilding the airplane while inflight," carriers should pursue is a strategic plan for changemanagement with a partner who possesses both an understanding of theindustry and the technology background to handle deploymentchallenges. This approach can offer a path to fully leveragepersonnel and mitigate job loss, while offering carriers the mosteffective plan for streamlining claims processing.

Related: 4 technologies that are revolutionizing theinsurance industry

Consider the customer when it comes to newtechnology.

Technology is capable of providing a completely virtual claimsexperience, but a completely virtual experience will not be theperfect fit for every customer or every situation. Instead of attempting to go completely "touchless," carriers couldconsider opportunities to revamp consumer interactions to ensurethat consumers are treated the way they want to be treated.

For example, a claims experience does not need to end with abill or receipt in a consumer's mailbox. The conclusion of the claims process is an underutilized opportunityto surprise and delight consumers with a personalizedinteraction to reinforce a positive experience.

On the other end of the spectrum, consumer interactions can berevamped to ensure that particularly sensitive or difficultsituations, such as mechanical failures, vandalism, or CAT responseare handled by field employees.

The least disruptive, and most effective, integrations of newtechnology require change management and redeployment of employees,factors that go hand-in-hand with each other.

If carriers choose to update their technology, eitherindependently or with an InsurTech partner, it's important tounderstand that disruptions such as job losses would be the resultof on-the-fly change management, not implementation of newtechnology.

CJ Przybyl ([email protected]) is president and co-founderof Snapsheet. Andy Cohen ([email protected])is the company's COO.

See also:

Market trend: Improved customer service andengagement

The 3 stages of the P&C insurance softwaresystem selection process