Much has been written of late about how technology — referred to as “insurtech” — is transforming insurance. While some of these solutions are actually in use, many more are still conceptual and speculative, so adoption is anticipated. But make no mistake: The majority of these technologies will be adopted in time, and they will ultimately transform the ways that insurance products are created, priced, packaged, marketed, sold, distributed and serviced. And the claims function — along with the insurance policyholders who incur those claims —is the most likely early beneficiary, with auto insurance leading the way.
In a 2017 survey of 400 North American claims executives conducted by Insurance Nexus, a significant 78% of respondents confirmed that “the American insurance claims industry is in the midst of significant disruption,” and 82% confirmed that “our executive teams are dedicated to transforming the claims function.” Claims innovation ranked as the most important project for 61% of the audience, and 60% agreed that “my organization has a specific plan for how they are going to achieve claims innovation, utilizing technology, focused on customer experience and meeting the challenges of disruption.” Note the words “utilizing technology, focused on customer experience.
Now overlay on top of all this a recent, unexpected and somewhat counter-intuitive spike in auto claims frequency courtesy of a negative by-product of gradual (but welcome) economic recovery. Most of us had assumed — wrongly, it turns out — that the recent trend of declining auto claims frequency would continue. Most expected that auto claims might even decline further as accident avoidance and automated driver assistance technology and the specter of autonomous vehicles began to appear.
Finally, add one additional element to this “perfect storm” of forces converging on auto claims: The very accident-avoidance technology whose main purpose was to reduce accidents has actually increased the cost and severity of repairing these technology-laden vehicles that become involved in accidents (frequently with older-model, less-well-equipped cars).
See also: Insurtechs Are Pushing for Transparency
While claims organizations are busy trying to figure out how to contain the rising numbers and costs of auto claims, and, at the same time, piloting insurtech solutions are trying to help, the customer experience for policyholders that have been involved in these accidents is often getting overlooked.
In an effort to accomplish cost reductions while also making the accident claim reporting process simpler and faster for policyholders, some carriers have begun providing smartphone apps for use in reporting accident claims and submitting photos of the damage. In some cases, these photos may enable the carrier to estimate the cost of repairing the damage, refer the customer to a convenient, qualified repair facility or even close the claim online with an electronic payment for the estimate amount. In fact, Allstate, the nation’s largest publicly traded auto insurance carrier, just announced that it has begun a countrywide transition from drive-in inspection centers to customer photo-estimating; the company expects the vast majority of drivable auto claims to be virtually inspected nationally in 2017.
The next wave of insurtech will introduce automation, voice recognition, artificial intelligence and chatbots to the insurance claims reporting and customer service process as these more-efficient technologies begin to replace more expensive humans. This evolution will definitely benefit carriers from a cost-reduction perspective and will likely satisfy a growing number of customers who trust — and even prefer — such digital interactions.
Drivers who use a telematics system — an electronic concierge or in-vehicle personal communications system — can request emergency roadside assistance and receive limited advice and support regarding insurance claims as the result of an accident. You may have already noticed that police in many urban markets are no longer responding to auto accident calls. Law enforcement budgets are shrinking, and police officers are busy handling higher-priority tasks, such as criminal investigations. So we can’t rely on the police showing up after an accident any more.
The missing piece in all of this is what happens immediately after an accident occurs and before your insurance company starts to process your claim. For individuals involved in car accidents who are not “digital natives” and who may be injured or just too shaken up to deal with all of that or who just need the comfort and assistance of a trained and compassionate person, innovative programs will emerge to bridge the gap between the accident and the claim report.
One such solution, originally established in Canada, is ASSI’s Collision Reporting Centers (CRC). These facilities provide drivers with the assistance, advice and support they need at that critical time immediately following an accident. The CRC is a private-public partnership between local police departments and privately managed reporting centers. Insurtech solutions are used in the CRC to electronically notify insurance carriers of collisions. The CRC provides electronic copies of written statements, vehicle damage photos and state-mandated reports needed to expedite a quick resolution of claims. Recently, ASSI expanded into the U.S., opening its first Collision Reporting Center in Roanoke, VA, in the fall of 2016, with plans to open many more centers nationally. New functionality being introduced includes electronic first notice of loss, possible total loss warnings and photo estimating.
See also: Insurtech: Unstoppable Momentum
As we move toward self-driving automobiles and the elimination of most accidents, we will see many innovative accident and claim management programs emerge to bridge the gap between the auto accident and the resolution of the claim process. The insurance industry is working hard to adapt to rapidly changing market conditions, and technology offers promising solutions as well as difficult challenges — finding the appropriate balance between efficiency and the necessary human touch in the claim process will separate tomorrow’s leading brands from their competitors. Not only can insurtech and claims customer experience co-exist, they will have to!