A claims digital transformation works best one line of business at a time, not as a single big-bang programme. Start with one line or one process, move it through intake, workflow, payments and data, then expand. Most programmes fail on people rather than technology, so change management, measures and APRA's CPS 230 obligations belong in the plan from day one.
Key takeaways
- Start small: one line of business, or one process such as intake, with a clear measure of success.
- Phase the work through intake, workflow, payments and data, and prove each phase before the next.
- According to McKinsey's 2018 survey, only 16% of respondents said their digital transformations improved performance and sustained the gains.
- People and process decide most outcomes, so handlers need to shape the new process, not just learn it.
- According to APRA, insurers must notify it of new or changed material service provider arrangements under CPS 230.
What is claims digital transformation?
Claims digital transformation is the move from manual, fragmented claims handling to a connected digital process. It covers how claims are lodged, how work is routed and tracked, how payments are made, and how claims data is captured and used. The goal is faster, more consistent and better-documented claims, not technology for its own sake.
It is broader than a system swap. A new platform that copies an old paper process changes little. The process itself has to be redesigned.
The pressure to change is real. According to Insurance Business, AFCA received 36,022 general insurance complaints in 2025-26, and delay in claim handling was the most common issue. Slow, manual processes are part of that story.
Where should an insurer start?
Start with one line of business or one process, not the whole claims operation. Pick an area with clear pain, enough volume to show results, and a team willing to lead. Define the measure of success first, such as time to first contact or Code timeframes met, and baseline it before anything changes.
A single line limits the risk. If the new process needs rework, only one team is affected. Lessons then carry into the next line.
The choice of starting point matters. A simple, high-volume line, such as home contents, shows results quickly. By contrast, a complex line such as liability may be the bigger prize, but it takes longer to prove. ClaimsGateway (claimsgateway.com) describes its approach for insurers on its insurers page.
What are the phases of a claims transformation?
Most claims transformations run through four phases for each line of business. Intake comes first, so claims arrive complete and structured. Workflow follows, so each claim moves through set steps. Payments come next, with controls and reconciliation. Data comes last, so the record of every claim can be measured and improved.
- Intake. Capture a complete claim the first time, with the information the line needs.
- Workflow. Route each claim through defined steps, with deadlines and approvals.
- Payments. Control and reconcile every payment against the claim and the policy.
- Data. Use the claim record to measure performance and find recurring problems.
Each phase should prove itself before the next starts. A workflow built on incomplete intake data inherits its gaps.
Configuration speeds the cycle. ClaimsGateway is a cloud claims, data and workflow platform whose workflows are configured without developers, so changes are owned by the business. That lets a claims team adjust a phase without waiting for a development queue.
Why do transformation programmes fail?
Transformation programmes usually fail on people and process rather than technology. Handlers keep old workarounds, managers measure the wrong things, and the new process is designed without the people who run it. According to McKinsey's 2018 survey, only 16% of respondents said their digital transformations both improved performance and sustained it.
The lesson is to involve handlers early. People who handle claims every day know where the real delays are. A design they helped shape is one they are more likely to use.
Training is not enough on its own. Old habits return when the new process is slower in practice. So teams should watch for workarounds, such as side spreadsheets, and treat them as signs the design needs fixing.
How does CPS 230 affect a claims transformation?
APRA's CPS 230 affects a claims transformation in two ways. Claims is treated as a critical operation, so changes must not breach the insurer's tolerance for disruption. And a new claims platform vendor is likely to be a material service provider, which brings due diligence, contract requirements and notification to APRA.
Change risk has to be planned. According to APRA, CPS 230 commenced on 1 July 2025. A migration that disrupts claims for days could breach the insurer's own tolerance levels, so cut-over plans need testing and fallbacks.
Supplier rules apply from the start. According to APRA, insurers must keep a register of material service providers and notify APRA of new or changed material arrangements. The CPS 230 claims guide covers the detail.
How should insurers measure progress?
Insurers should measure progress with the same measures they set at the start, baselined before change. Useful measures include time to first contact, time to decision, Code timeframes met, complaints per thousand claims, accuracy in closed-file reviews and handler workarounds still in use. Measures should be tracked by line, so each phase shows its own result.
Baselines make the case. Without a before figure, a programme cannot show it worked.
Watch for side effects too. Faster decisions that raise complaints are not progress. So pair each speed measure with a quality measure.
Frequently asked questions
What is claims digital transformation?
Claims digital transformation is the move from manual, fragmented claims handling to a connected digital process. It covers how claims are lodged, routed, tracked, paid and recorded. The aim is faster, more consistent and better-documented claims, and it involves redesigning the process, not just replacing a system.
Where should insurers start?
Insurers should start with one line of business or one process, chosen for clear pain, enough volume and a willing team. Define and baseline the measure of success before changing anything. A single line limits risk, and its lessons carry into the next line of business.
How long does it take?
It depends on the number of lines, the complexity of each and the systems involved. Phasing by line means each line can show results before the next starts, rather than waiting for a whole programme to finish. Cut-over plans also need testing under CPS 230, which affects the timetable.
Why do transformation programmes fail?
Most fail on people and process rather than technology. Handlers keep workarounds, managers measure the wrong things, and processes are designed without the people who run them. According to McKinsey's 2018 survey, only 16% of respondents said their digital transformations improved performance and sustained the gains.
What should be measured?
Measure time to first contact, time to decision, Code timeframes met, complaints per thousand claims, accuracy in closed-file reviews and workarounds still in use. Baseline each measure before change, track it by line of business, and pair every speed measure with a quality measure so faster does not mean worse.
About the author
ClaimsGateway builds cloud claims management software for insurers, underwriting agencies, brokers, TPAs and self-insured organisations in Australia and New Zealand. Every regulator figure in this article links to its source, and every vendor fact was checked on the vendor's own site on the date shown.
Related reading
- Build or buy claims software: when an in-house build makes sense.
- Claims management best practices: practices that hold up in Australia.
- Claims trends for 2026: what is changing in Australian claims.
Sources
- McKinsey and Company. "Unlocking success in digital transformations." McKinsey Global Survey, October 2018. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/unlocking-success-in-digital-transformations (read through search results, 24 October 2026)
- APRA. "Operational risk management (CPS 230)." Checked 16 October 2026. https://www.apra.gov.au/operational-risk-management
- Insurance Business Australia. "Insurer claim delays top complaints again as brokers report no change." 11 September 2026. https://www.insurancebusinessmag.com/au/news/claims/insurer-claim-delays-top-complaints-again-as-brokers-report-no-change-589274.aspx
