(Image credit: Adobe Stock.)
The insurance claims process is rapidly being transformed from analog to digital as industry economics and customer expectations demand such a change, and as technology enables it. Not only does digitization provide impressive cost savings and satisfy the expectations of a growing number of “always connected” consumers, but it delivers a host of other benefits described below.
Digitization is typically and logically accompanied by its technology siblings—artificial intelligence, advanced analytics, machine learning, natural language processing, bots, process automation, newer and soon to be born additions to this growing InsureTech family. InsureTech providers of many types have emerged seemingly overnight to provide a dizzying array of new technologies to support claims innovation within established carriers and enable new insurance entrants at the same time.
Selected examples of these include:
- CCC Information Services, a leading U.S. information provider to the automotive, insurance and collision repair industries, is working to combine auto injury causation software with telematics expertise and overlaying casualty claims management assets to meet the needs of the rapidly transforming auto insurance claims industry
- DropIn, Inc. provides an on-demand, live video platform for more precise underwriting risk assessments, speeds claim resolution, enhances damage estimate accuracy, and reduces indemnity and loss adjustment expenses. Users can access and utilize streaming video and high-resolution photos captured directly by customers or via a crowdsourced independent contractor network using commonly-available InsureTech tools, such as smartphones and drones, to achieve insight into the complexities of auto and property damage for enhanced decision-making.
- EagleView provides aerial imagery, data analytics, property data, and GIS solutions related to millions of residential and commercial properties for local and federal government agencies as well as the infrastructure, insurance, solar, and construction sectors
- Livegenic provides cloud-based, real-time patented video solutions to property and casualty insurance organizations connecting every part of the claims ecosystem. The Livegenic platform streamlines communication between in-house and external adjusters, appraisers, contractors, and policyholders, provides field video loss documentation capabilities, and delivers customer self-service solutions.
- OnSource provides insurance companies with claims and underwriting photo inspections through intuitive smartphone apps and a mobile website. Policyholders and claimants use self-inspection apps, Instant Inspection’s chat website, or their managed network of thousands of photo field inspectors and quality assurance analysts.
- PartsTrader, an automated repair parts bidding and procurement platform, connects thousands of collision repair shops with repair parts suppliers of all types to reduce the cost and cycle time in the $15B U.S. repair parts market segment. The PartsTrader platform allows repair shops to search and compare multiple suppliers at the same time and to work with suppliers competing for their business.
- Snapsheet utilizes proprietary technology to optimize virtual auto physical damage claims operations, giving insurance adjusters the tools they need to provide a seamless experience to their claimants
- WeGoLook, in which Crawford & Company, one of the world’s largest independent providers of claims management solutions to insurance companies and self-insured entities recently acquired a majority interest, provides on-demand field inspection and verification services. Using its web and mobile platform the company empowers a 30,000+ mobile workforce, known as Lookers, to collect and verify information and fulfill custom tasks for businesses and consumers alike in insurance and other verticals.
While this is all good news—and represents an inevitable development—for insurance carriers, their supply chain partners, customers and for other stakeholders. However, what is at risk of being overlooked in this rush to a more efficient, streamlined claim process are the preferences of individuals that buy and use insurance services. At the most critical times in the insured claim cycle, these individuals require the reassurance and comfort of a personal touch.
The auto claim is a case in point and a perfect example. Many claims processes, mainly those that take place in the background such as those listed above, are well-suited to the cold efficiency of technology, automation and digitization. But the auto claim is frequently preceded by a totally unexpected, disorienting and sometimes traumatic auto accident. This is the moment when the consumer most needs and depends upon their insurance carrier.
In 2016 there were about 190 million registered passenger vehicles on the road in the U.S. In the same year, more than 15 million auto accidents occurred involving 18.5 million vehicles. Stated another way, about one out of every ten cars on the road was involved in an accident. On average, every driver can expect to experience an auto accident once every ten years, most minor in nature but others involving serious injury or even death. Sadly, there were 40,200 traffic fatalities in 2016.
The Anxiety of Auto Accidents
We are never fully prepared nor do we know exactly what to do when involved in a traffic accident. The experience is unfamiliar and confusing. A battery of questions immediately come to mind: How much is this going to cost me? Was this my fault? Could I have prevented it? How will I get where I was going? Whom should I notify first? Is anyone hurt, including me? and so on.
Historically, a police officer would typically show up, review the scene, ask the drivers several questions, make some notes and direct the vehicles off the roadway to a safe location or if necessary call a tow truck or an emergency vehicle.
Then you would need to follow an often frustrating, protracted claims and repair process; call your agent or carrier; get the car to a body shop, arrange for a rental car, make numerous calls to the shop and the adjuster to see when your car will be ready and then reach into your pocket to pay your deductible even after paying your insurance premiums faithfully for all those years.
But things are rapidly changing and this scenario will soon be a thing of the past. For one thing, 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 upon the police always showing up after an accident in the future.
Insurance companies are addressing some of their challenges by using new technologies such as those listed above that make the auto claim and repair process simpler and faster. Many carriers offer smartphone apps that include claim reporting capabilities enabling drivers to take photos or videos of the accident damage at the scene (or later from home) and upload them to the carrier who assesses the damage and schedules the repair often in minutes. Some companies are paying drivers electronically on their smartphones and closing out the claim in mere hours. However, for those who believe that younger policyholders prefer technology to human contact, the recent J.D. Power 2016 U.S. Auto Claims Satisfaction Study reveals that only 7 percent of millennials prefer digital channels to report their claims and concludes that technology cannot fully replace humans during the claims process, even among millennials.
Bridging the Gap between Accident and Claim Report
The one missing piece is what happens immediately after an accident occurs and before your insurance company starts to process your claim. Not everyone has a smartphone, is tech savvy enough or understands the importance of reporting the accident immediately to their insurance company. Auto accidents can be traumatic. Many people can be involved, in your vehicle and in other vehicles. Differences of opinion between drivers about the facts or what caused the accident are not unusual. Without the presence and authority of a police officer, people are left to cope with all of these issues on their own. And, since almost 80 percent of vehicles damaged in auto accidents are safely drivable, there’s no logical reason to have to stay at the scene once your information is exchanged with the other driver(s).
To address these new realities, innovative programs has emerged to bridge the gap between the accident and the claim report. One such solution is the Collision Reporting Center (CRC). These facilities provide drivers with the assistance, advice and support they need at the critical time following an accident. The CRC is a partnership between local police departments and privately managed reporting centers. The model initially emerged in Canada 20 years ago when the insurance industry and police joined forces to solve a mutual challenge. Today the operation manages 32 Collision Reporting Centers in partnership with 53 police departments across Canada and serves 80 percent of the Canadian auto insurance industry. Recently the operator expanded into the U.S., opening its first Collision Reporting Center in Roanoke, Virginia in the fall of 2016 with plans to open several more centers in the near future.
Comfortable and Safe Environment
At the Collison Reporting Center, drivers involved in an accident provide their individual accounts of what happened and other information while professional staff take digital images to document damage. The information is reviewed by an on-site police officer at the CRC and is immediately sent to the driver’s insurance company where a claim is initiated and processed. Drivers are provided with a customized instructional guide from their own carriers describing what to do next and a private room where they can make a phone call to their insurance company or family members. The Collision Reporting Center provides a comfortable and safe environment, eliminating the need for drivers to wait on the roadway.
As we move toward self-driving automobiles and the elimination of most accidents, we will see many innovative accident and claim management programs emerge that can bridge the gap between the auto accident and resolution of the claim process. Collision Reporting Centers are an excellent solution to these needs—they provide personalized customer service and a human touch with the power of technology making the auto accident reporting process as non-intrusive as possible into our busy lives.