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July 27, 2020

Crisis Mitigation Beyond COVID-19

Summary:

Whether at small companies or in massive industries, the ability to pivot to support new ways to work is key to sustaining operations.

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The coronavirus pandemic and its sweeping impact have been unexpected and swift. For most businesses, survival has been predicated on how nimble the organization can be in the moment — this is true for small companies and massive industries. The ability to pivot to support new ways to work has been key to sustaining operations. 

Restaurants, for example, have spun up digital payments and text-enabled curbside delivery protocols that are so well-orchestrated that we may never want to get out of our cars to pick up and pay for food again. Telemedicine ramped quickly, with online appointments growing 50%, ensuring routine and non-urgent appointments can be kept during stay-at-home orders. 

Within our industry, the adoption of mobile and AI-based technologies allowed customers to submit claims and insurers to process them without physical interaction. Photo-enabled estimating more than doubled from January to April 2020, and some carriers report photo estimates now represent more than half of their total claims volume.

It’s unlikely these experiences will revert back to pre-COVID-19 norms. If history is any guide, consumer changes during economic upheavals frequently take hold, setting a new standard and expectation. 

For example, research shows 68% of new grocery ecommerce shoppers will continue to shop online in the future, and sales for click-and-collect services, those identified as being ordered online and picked up curbside – via locker, or some other hub – are expected to increase 60% this year. Insurers can expect their consumers to continue to look for mobile claim services as well, with 84% of adults responding to a CCC survey about their recent auto claim saying they would use photo technology again to initiate a claim, citing an overall better and faster experience.    

These examples, and a host of others, demonstrate that companies responding to the pandemic by fast-tracking their technology adoption cycles and process have been rewarded with business continuity and increased customer satisfaction. 

COVID-19 is not our only challenge 

Responding to a global pandemic is – let’s hope – a rare experience. But, in the insurance business, crises happen more regularly. And while some of these may be predictable, responses will need to evolve because of COVID-19. 

For example, each year billions of dollars are spent responding to and helping policyholders recover from weather-related events. The 2020 hurricane season is underway, off to a fast start and expected to see above-average activity, with more named storms. Combine this with recent spikes in the number of coronavirus cases – especially in Atlantic states where hurricanes could hit hard – and disaster response will be especially challenging. CAT teams will face social distancing protocols and travel limitations.

Fraud gives us another example. 

Unemployment rates, while trending down, remain over 11%, and unemployment insurance claims through mid-June are estimated at 33 million. While it is impossible to know what’s going to happen next, data shows that fraud increases during severe economic downturns. 

In our new world, one gripped by an unrelenting pandemic, mounting financial pressures and rapidly changing stay-at-home orders, insurers need to continue to find new ways to be efficient and effective in their approach to service delivery and policyholder satisfaction. Embracing smart, digital tools – like those successfully employed in response to COVID-19 – can prepare insurers for the seen and unforeseen that lie ahead. 

See also: How to Lead in the COVID-19 Crisis

Innovation is the best preparation

A hurricane touches down near southern Florida, and thousands of policyholders are left dealing with house damage, potential injuries, auto damage and more. The typical response is to dispatch CAT response teams, set up triage centers and begin the business of damage assessment and claim management. Social distancing will render this response nearly impossible.  

What is possible? Equipping policyholders with a self-service mobile app that will guide them through the process of capturing a series of vehicle damage photos and answering specific CAT-related questions. Remote appraisers can quickly assess these vehicle damage photos, make near-instant total loss versus repair decisions and move the process forward without any in-person interactions. And, for vehicles declared a total loss, technology can seamlessly connect insurers and automotive lenders to expedite loss resolution and keep parties informed of the status of the claim. 

These same enabling technologies can also help insurers mitigate risk associated with prior damage claims, which can cost billions of dollars each year and affect more than 30% of policies. 

Policyholders using their smartphone camera can easily capture and share vehicle photos. AI, geo-location and damage detection heat maps work together to allow insurers to assess vehicle condition and verify location. Photos are digitally tagged and integrated into an insurer’s claims workflow for easy reference should a claim for that vehicle be filed. Inconsistent vehicle details shared at the point of a future claim – knowingly or unknowingly – are flagged for closer review. 

As we look to the future with some uncertainty, what is becoming clear is that those businesses or industries that can quickly embrace or evolve their innovation strategies are best positioned to respond to the unknown. In an era of social distancing, which is unlikely to change any time soon, digital solutions support and advance businesses while respecting calls for personal space.

We’ve certainly learned a lot from the COVID-19 and virus response. An insurer’s ability to take decisive action and advance technology decisions to support customers and employees has made the difference – can we make this a “new normal” and stand ready for anything that comes next?

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About the Author

Jason Verlen is senior vice president of products and technology at CCC.

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