One of the hot topics in 2022 was insurance claims inflation. The twin problems of supply chain shortages and the sudden jump in the cost of getting repair work carried out extended the time frame for many claims, which increased the average cost substantially. As everyone in insurance knows, claims is ultimately its own eco-system, with several different specialist companies involved in things like vehicle recovery, valuations, storage, roofing, plastering etc. Then you have another set of medical, legal and other expert service companies in helping out in the personal injury claims sector.
But as inflation pressures ease slightly in 2023, it’s worth looking at your digital claims chain, to see where partnerships can really bring benefits in terms of closing down claims that bit quicker.
ONE STOP SHOP
There is something to be said for insurance brands partnering with companies that can manage things like non-fault motor claims from start to finish. AX Automotive recently renewed its partnership with Somerset Bridge and the deal means that repairs, hire and total loss is all wrapped up with one company. This has the benefit of not causing delays whilst quotes, or waits for parts, hire car queries etc act as bottlenecks between separate companies, which can happen.
MOTORING INTO AN AI FUTURE
Marc Rothchild, Head of Claims at Xceedance offers these insights;
“By using tightly integrated technology and AI you start to get improvements in accuracy before the claim has even been made. If you are collecting higher quality data such as the type of vehicle, the insured’s location, and coverage terms at the binding process and then feed that information into the claims platform, you start a much more accurate claims journey.
Much of the information, such as the location of a vehicle crash and the extent of the damage, is now being self-entered by the insured using videos and pictures captured on smartphones or directly from devices in smart homes. This information tends to be much more accurate than if it comes from a third-party such as a broker.
The level of self-inputting or self-service at first notification of loss varies by carrier and line of business but in some risks, such as personal auto or homeowners’ property claims, it can surpass 15%. We have also seen higher utilization in workers comp where a single point person, such as HR or safety management, directly submits claims on behalf of their injured workers.
AI is also improving the accuracy throughout the claims cycle, like when an insured checks on the status of a claim or in the processing of payment. We are evaluating new AI technologies in the coming months, and I think we are going to be very pleasantly surprised. AI will not be responsible for the entire claims journey in the near future, but the foundations are being laid to enable increased reliability to speed up portions of the claims process and enhance claims data accuracy going forward.”
In the home insurance sector Verisk and Tractable have been working together in 2023 to automate much of the damage assessment process. The system is a cross-over from Tractable’s work on auto claims and uses a similar process.
Launched last year, Tractable’s AI property solution allows policyholders to submit photos of damage through a mobile-friendly, web-based app. The AI, trained on a large database of claims and damaged property, then quickly identifies, classifies and measures the property damage, enabling automated estimates to be generated on Verisk’s Xactimate® platform. It’s a great example of how two pieces of software can dovetail together to produce a win for insurance brands – and customers too.
TRENDS, GOALS AND DATA MATTER TOO
Rich Tomlinson, CEO at Percayso Inform, sees a huge value in shared data via partnerships. Sometimes saving time and money is best achieved by understanding the common goals involved within the claims chain.
“While the ultimate goal of any partnership is to achieve a successful and mutually beneficial outcome, we believe this lies not only in bringing the right people and businesses together but also through creating an enjoyable and productive process for both parties. So as far as we’re concerned, the journey with our partners is just as important as the final destination. At every stage of the relationship, we encourage honest dialogue and information sharing as a means upon which to build a true partnership that brings significant value to both parties.
Another integral part of the journey is our responsibility – as we see it anyway – to deliver timely market insight and identify trends which may impact on our partner’s business and the specific objectives of the mutual goal. While some may not view this as a normal part of the continuous engagement and support they provide, for the team at Percayso, this is standard practice across all of our partnerships.
Here are some thoughts from Gavin Peters, VP Marketing, Genasys Technologies;
“Many insurance administration providers will say they can do everything and do it all as best-in-class. They can’t. At Genasys, we have a strong ecosystem of top-tier partners who buy into our ethos of making insurance easier for our customers. We do this through genuine innovation and provide a competitive edge as specialists in their respective technologies, whether that’s data enrichment, policy rating or payment gateways.”
PARTNERSHIP PAYS OFF
“A brilliant example is motor incident reporting and management solutions provider Xtract, who we were actually introduced to by another partner. As soon as we met the team and dug deeper into the product, we knew that as a combined offering, we could add huge value to motor customers. Xtract’s technology makes it really easy for drivers to provide all necessary incident details, including a visualisation of the incident and information from all parties involved, and auto-populates telematics data (where available) to augment the driver report.
“Once we’d agreed to partner up, we integrated in less than two weeks. A fantastic benefit of working with partners who, like us, have well-designed open APIs. With this rich, accurate data plugged into the Genasys claims administration platform, the claims handler can open up the claim and straight away make sense of what happened, how, who’s at fault, and even whether or not the vehicle is repairable. They’re able to make better informed decisions more quickly, which is good news for the claims handler, the customer, and the insurer. It removes a lot of the friction and frustration for everyone.”
For brokers, one important consideration is how well insurance brands accomplish the processing of customer data and settlement of claims. If that falls down, then often the broker gets blamed by the customer, even though it isn’t something that a broker or intermediary can control.
The solution, which could help your renewal ratio, is to check the brand reputation of the underwriters and big insurers. One way you can do this is by using tools like the Digital Bar from Pancentric. This offers scores on the digital journey offered by various big insurance names and whilst it isn’t the whole story, it does offer clues as to which brands perform best online. In a world of smartphone/web based insurance purchasing, policy admin and claims images uploads carried out by app, ultra smooth digital skills really matter in terms of fighting claims inflation.
AUTOMATION IS YOUR FRIEND
Thomas Hauschild, CEO, (pictured) at omni:us, feels that automation can make claims not just faster, but more accurate.
“Insurers are increasingly trying to automate the claims process to increase operational efficiency through administrative cost reduction, but also to optimize on indemnity spent. Claims departments are often dealing with long lasting claims backlogs, particularly stressed at peak points such as February in the UK when they see the highest levels of flood claims. Digital technology allows claims departments to automate time-consuming claims set-up and investigation.
We see automation as being like a ‘super employee’ – a digital claims adjuster who can work 24/7, 365 days a year. Technologies such as machine learning can be used to read, comprehend and act upon a large variety of received claims across channels. These can range from emails and inbound calls all the way to traditional mail.
Technology can take care of manual tasks, freeing up adjusters to focus on high value customer touchpoints as well as investigating higher severity claims. In our experience, 55% of claims can go fully automated from first notification of loss through to final settlement. Around 35% of claims can be semi-automated to require a sign-off from a claims adjuster. In these instances 80% of the claim set-up and settlement has already been completed by the technology.
Insurers can typically see a reduction in costs of 25-35% if they automate the claims process. Automating claims also leads to a higher decision accuracy because adjusters are often on the clock and can’t investigate all details for low-medium severity claims due to time pressure.”
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