David Rix is the co-founder and CEO of Administrative Claim Service, Inc (ACS). After founding Administrative Computer Consultants, Inc. (ACC) in 1982, David began ACS in 1993 with a mission to provide after-hours statements and transcription services to insurance companies. We asked David to share a bit of what he’s learned over the past 30 plus years in the industry, and asked him about where he sees it going.
ACS Blog: For those who don’t know much about ACS’s history, I was hoping you could tell us a bit of your personal memory of how the company got started? What led you personally to come to a decision that there was enough space in the industry for what you wanted to offer?
David Rix: Well, we felt that what we wanted to offer an improved policyholder experience. Our focus was on improving the claims process by helping client companies gather information in a professional, courteous, and efficient manner. In the early 1990’s, you could see that there was an outsized need for that kind of help. The realization that service was key to retaining insureds was still in an embryonic form and beginning to be managed in different ways. We thought we could improve the way these companies were perceived when insureds and claimants were in their “hour of need.” We’re still doing that today.
The backbone of ACS is still those administrative services. But after more than 25 years, the needs you meet now must have changed significantly from the ones you met then. Can you tell us a little bit about your approach to change?
I’m sure there are a number of ways to approach change, but for me it’s listening. Listen to clients, listen to employees. You need to understand the bottlenecks that take place in your own organization, and you need to pay close attention to what your customers want. We’ve survived because we’ve made a point of being aware of what our clients need to maintain a competitive edge, and we’ve worked to ensure our services supplement those goals.
We’ve also worked hard to make sure that the people behind those services are heard. You don’t get one without the other.
Let’s get nostalgic for a moment. As you look back, what do you feel has changed the most in the services that you originally offered versus what you offer now? Did any of the changes feel like a major shift for the company?
Initially, we were focused on sending teams of statement takers into insurance companies when their full-time adjusters were leaving for the day. They would take recorded statements and create summaries while on the premises. That worked for about a decade, but it became an increasing risk for insurance companies to have third-party employees at their sites after hours. Technology was changing, too, and remote work was becoming a more widespread practice.
We did have a major shift, though. We developed our digital recorded statement service, now our Hosted Media Service. This service allowed client adjusters or representatives to take their own recorded statements through their telephones. The service also included hosting these digital recordings on our website for access at anytime. The recorded statement service was ahead of its time then, and is still an important service for us today.
Was recorded statement service something that you had imagined before, and then the technology became available? Or were the two occurrences more or less concurrent?
Actually, the idea came from a potential client. The technology was available at the time, it was just a matter of imagining and developing the service.
Would you consider tech the driving factor for most of ACS’s changes?
Most definitely. The internet and the ability to take electronically recorded statements and store them online transformed the niche of recorded statements from cassettes to digital audio files, transformed paper claims to electronic claim files. It changed entire departments.
That’s still happening, and we are still required to evolve. Our services have to keep pace with technology in order to provide our clients with that edge. For instance, insurance companies are working to analyze massive amounts of data to improve the claims process, the customer experience, assessing risk. We happen to host a lot of recorded statement data. If our clients want to analyze it, we should be able to accommodate that.
Do companies usually come to you with a pain point looking for a fix, or are you looking more towards innovating?
I think we have to be proactive in looking ahead. There is still a need for our more traditional services. Some companies are ahead of others in adapting to technology, but as a services company, we have to be ready to complement our clients’ initiatives in the services that they outsource. If we’re not ready to do that, we run the risk of losing clients.
Also, the services that are born from proactive research and development endure for a greater length of time than those where a client has a particular pain point they’re looking to fix. They’re often temporary, and the company is likely working on their own solution to solve it in the long term.
Proactive, innovative services often respond to client needs in completely different ways than they were envisioning. Often times, this can make them less expensive or disruptive than what they imagine. That’s always the standard for what we try to do.
Speaking of innovating- there’s a lot of imminent changes on the insurtech horizon. Automated voice transcription, AI, data analytics, vehicle automation, climate change: the list goes on. You’ve already mentioned a few. Are any of these of a particular interest to you?
I think the entire P&C insurance industry is keeping an eye on all of those you mentioned. There’s a bottom line effect for every one of those, so that means we’re interested, too.
For me, personally, it’s the development of the autonomous vehicle. I own an electric vehicle that has a software beta available for autopilot. I keep an eye on such companies as Waymo LLC, a subsidiary of Alphabet Inc., Tesla, General Motors; anyone who is forging the autonomous vehicle path.
Waymo is fascinating. They’ve started a self-driving taxi service in Phoenix, and they’ve begun a commercial self-driving car service called Waymo One which uses an app in a limited area of metropolitan Phoenix.
What it means for the insurance industry is fascinating. As the software and design improves, will insurance move away from the major insurance companies to the manufacturers? Are states and towns going to become more liable due to road conditions, traffic signals, and pedestrian crossings? Will they indeed reduce the number of accidents? Discussion around these questions is really interesting, and I don’t know that we have enough empirical evidence yet to predict all of the outcomes.
Of all these upcoming technological changes, which do you feel will be the most disruptive to the industry?
Of all the ones you mentioned earlier, I know it’s not really a technological change, but I think climate change has the greatest potential to be disruptive of insurance going forward. You’ve written two articles for this blog about how that’s already happening. In the last 100 years, the sea level has risen somewhere around 8 inches due to the melting ice caps. These caps are consistently shrinking, and they are not growing back over the course of the year. I’ve seen predictions that the sea level will rise as much as 20 feet by the end of the century.
I hate thinking about that. I’m from New Orleans.
Yes, that’s an area that has some reason for concern. All coastal regions have some reason for concern. There are a lot of businesses, residences on our coasts. Extreme weather and the rising sea level potentially will cause the most disruption to the insurance industry.
Are you sure that you don’t just have a bias about the sea? I’m seeing a lot of boats around your office.
No! The ocean has a mind of its own and cannot be tamed. I love sailing, but that has nothing to do with climate change. We would be foolish to ignore the signs and trends emanating from climate change data and to carry on as normal without regard to them.
Compared to some of the giant companies you service, ACS is relatively small. Do you still feel confident you can keep up with industry change?
Yes. For one thing, we’ve been in business for 25 years. We have seen one challenge after another as the industry has evolved and service has been identified and emphasized. All the “disruptions” you mentioned are events that need to be understood and adapted to. That poses a challenge, but it also provides opportunities. As long as we understand the trends that are occurring and the technologies that accompany them, we will be in a position to adapt the company and our services.
Not to give away company secrets, but can you tell us anything about what you expect the next innovation would or could be from ACS?
Technological advances in the past twenty years have not seen concomitant advances in security and confidentiality within the public and private sectors. Seemingly we read every two or three months of a massive data breach in a large company that should have had the technology and means to protect their personal private and financial information. Additionally, the proliferation of web-based services brings user headaches with all the usernames, login names and passwords. Dual authentication is now a requirement. The insurance industry spends billions of dollars each year on supplemental outside services that require employees to access vendor websites. Remembering login credentials and keeping them private and away from malfeasance is an art unto itself.
We understand the issues insurance companies face in this area, and we offer clients a secure way of entering our systems without the need to remember passwords or other credentials. Our security has been audited by ISO 27001 professionals and our employee and system security is considered best in class. We consider that to be a cost- and time-saving measure that improves productivity and user experience. And we’re prepared that as new technological innovations occur within our field of service, our security will evolve accordingly.
Some people feel that advances in technology come at the expense of employees: losing job opportunities, finding their skillsets less useful, etc. What are your opinions on that thought?
I think it’s true that some advances come at the expense of employee jobs, but others also create job opportunities. In the service industry, the loss of jobs due to technology advances could very well be offset by the gain of jobs resulting from the same advances. Good employees will never be replaced. There will always be opportunities for them, provided they are willing to learn and be flexible in their employment.
As I mentioned, technology innovations will result in the evolution of different service offerings. Such services will need some sort of employee oversight and interaction. These advances are inevitable, and they should not be feared. If understood, they represent an opportunity for the entire company.
Last question: you’ve been doing this for years, but you keep coming to work with determination and passion. Where does that come from? At the end of the day, what still gets you excited about tomorrow?
I enjoy working with and listening to people. There is nothing better than taking an idea and developing it to the point where it is seen as adding value to others. I experience a great satisfaction from that. I think that everyone involved does.
I also enjoy the challenge of learning. I suppose if I tire of learning, then it will be time to move on. But you know the foreseeable future offers tremendous change, as far as harnessing social media to your advantage, using the improvements in technology to advance your services, adapting your services to industries that care about the environment. There are many challenges and opportunities. Hopefully I have good health to keep on tackling them.