Picture the scenario: An autonomous-equipped vehicle belonging to a 20-something insured is involved in a non-injury accident. With a couple of clicks on the smartphone, accident-related information gathered through telematics and mobile applications is instantly transmitted to the insurance carrier’s claims processing system, which blends information about the accident with specifics about the insured and claimant to complete the loss report. Additionally, data elements from the police report populate the claims processing system automating the liability decision to allow the carrier to automate the damage assessment via its claims app that collects damage photos from both parties and simplifies the damage estimate process. If the claim meets approved criteria, the insured is notified electronically and the claims are paid—without any carrier employee intervention.
Does this scenario seem far-fetched? It’s not. A few months ago, a large national auto insurer announced that it was ceasing the use of drive-in claims service in some states. Instead, it will use a virtual claims process that utilizes customer photos.
Technology advancements, combined with changing customer preferences and a shifting insurance carrier workforce, are driving an evolution within the auto insurance industry toward “touchless” claims processing. And while not every claim is appropriate for a touchless approach, self-service options and increasingly automated claims processing practices are definitely on the rise. In fact, a recent LexisNexis study reveals the following insurance carrier insights about industry trends:
- Data and analytics will be used routinely to automate FNOL within the next three to five years.
- Telematics data is likely to be used in claims investigations with the next five years.
- Customer preferences (especially among Millennials) are driving an increasingly automated claims handling approach.
There’s good reason to pay attention to these trends. Automated claims processing has already proven to deliver carrier benefits such as increased efficiency, reduced loss adjustment expense (LAE) and faster cycle times. As customers come to expect the convenience of digital in every aspect of their lives, automated claims processing can improve customer satisfaction, too. All of these benefits could grow exponentially as carriers migrate from traditional high-touch practices to more virtual low- to no-touch practices.
Consider five reasons your company should evaluate beginning a journey toward touchless now:
- On-demand service is at an all-time high – As mobility becomes ubiquitous, carriers must be easily accessible from wherever their customers are. Smartphones are playing a significant role in the self-service, virtual claims handling process.
- Most consumers are always connected – Advancements in telematics are promising ease-of-use, the potential for more competitive premium pricing and increased accuracy in assessing risk. Telematics also make it easy to connect to driver or vehicle data for fast service at the time of claim.
- Digital capability is a must-have for today’s service providers. The Millennial generation is becoming a dominant force in the marketplace and demanding digital capabilities in every aspect of life. Insurance claims processing is no exception if carriers want to attract this segment’s business.
- Doing more with less requires automation. Collision claims frequency and severity are both on the rise, meaning there is more work for claims professionals to do. Additionally, rapid retirements among the baby boomers in claims departments are creating a significant knowledge and experience gap. To address this challenge, carriers will need to apply their human resources where they can deliver the greatest value. Fully automating non-complex claims is a strong step in that direction.
- The Future is now. Technology innovations such as autonomous vehicles and connected cars are coming at lightning speed. IT cycles tend to require long lead times so improvements planned for 2019 and 2020 need to begin now. Many original equipment manufacturers (OEMs} have publically announced plans for full autonomous vehicles as early as 2020 while connected cars already exist today.
The question one may ask is when should I begin my automation journey? Based on feedback from industry leaders we are hearing that leading companies are already engaged in the planning phase for rapid claims automation. Most say that 2018 and 2019 strategic planning is already underway, so now is the time to begin preparing for the future of claims automation.