From the June 2011 issue of Tech Decisions •Subscribe!

Yesterday’s Toys; Today’s Tools

There is no shortage of statistics available for the growing popularity of mobile technology. Personally, the one I found most interesting is that every day, more than 3 million hours are spent playing Angry Birds, a game that began its existence on the iOS mobile platform. While no insurance app is ever going to rival the popularity of flinging wingless birds at green egg-stealing swine, insurers are counting on the power of mobile to impact their claims operations.

“The mobile environment is rapidly evolving in terms of the number of devices, capabilities, and usage,” says Jill Rasmussen, assistant director of marketing Web development at Amica Insurance. “Mobile is a space our customers are in, so it’s a space we need to be in as well.”

Yet according to Karen Pauli, research director in the insurance practice for TowerGroup, just a few years ago, insurers didn’t have a claims strategy around mobile technology. In a 2007 report, she stated that insurers were “slowly” bringing on mobile technology solutions to assist field workers with claims operations, noting that “the process has lacked focus and forward momentum.”

Today, the situation has changed. “Since 2007, the majority of carriers have at least gotten engaged in creating strategies and developing a holistic approach to claims mobility, whether for adjusters, customers, or both,” says Pauli.

Anand Rao, principal in PwC’s Diamond Advisory Services, observes that the development of mobile is following the same path of other Internet-enabled technology. Deployment starts with information delivery, evolves to include transactional features, and finally transforms insurers’ operations.

“On the claims side, we have seen the most development of mobile technology around providing information, with carriers only recently moving into the transactional arena,” Rao says. “The opportunity for transformation is still in the future.”

Surprisingly, Pauli credits the coalescence around mobile strategy with increased activity in legacy claims system replacement and rehabilitation. “Once you have a modern claims system, you have data that is usable and accessible to many platforms. You can create highly integrated claims processes that involve mobile technology,” she says.

Consider Amica, where an upgrade of its back-end claims platform to Guidewire’s ClaimCenter gave the company a foundation on which it could build a customer-facing mobile claims app, deployed first for iPhone in 2010.

“We wanted a seamless experience for customers where they could log in [from a mobile device] and have minimal data entry on the front end by prepopulating as much information as possible. On the back end, we wanted information that customers entered to automatically populate the claims system without requiring rekeying,” says Lisa St. Onge, assistant vice president in claims at Amica.

ClaimCenter uses the Guidewire’s Web services API to make it possible for external systems, like Amica’s iPhone app, to create that seamless connection, something that couldn’t have been achieved easily with the carrier’s legacy claims platform.

THE MOBILE ADJUSTER

Insurers have two constituents to serve in deploying mobile claims technology: adjusters and claimants. Adjusters are by definition mobile. For them, the value of technology lies in delivering the “3 Cs:” communication, collaboration, and consolidation.

Key goals of communication in the claims space include the ability to transmit claim assignments and information to adjusters instantly and to eliminate adjusters’ need to revisit the office to complete essential tasks. “We are seeing mobile technology being used more and more by claims adjusters to perform tasks that would have either been manually handled or would have required follow ups,” Rao says.

“This includes using smartphones or other devices at the spot where the loss occurred, getting additional information from the home office, and communicating with third-party providers to handle claims on the spot. That has a significant impact on shortening the claims cycle,” he says.

Farmers recently completed a pilot iPhone program is planning on deploying iPhones to all its field adjusters. John Radgowski, IT director for Web and mobile application at Farmers Insurance, sees communication as a big benefit to the technology upgrade.

“We will integrate those devices with our dispatch system to get assignments and other directions to the smartphones. We can also get information back from adjusters in the field that we can use, such as notifying customers of the ETA of their adjuster. It’s powerful, bidirectional communication,” Radgowski says.

Mobile technology is also delivering enhanced colaboration capabilities. “It’s already standard operating procedure for most carriers to have mobile capabilities for adjusters to do necessary claims tasks, such as writing vehicle damage assessments or taking measurements and pictures. What is really going to make a difference is providing them enhanced access to collaboration platforms, documents and files, even basic email—just allowing them to do business without having to get back to their land-based office,” says Pauli.

“Insurers have discovered the value of mobile devices in collaboration in the claim process,” Rao says. For instance, an adjuster investigating a suspicious claim or a type of loss with which he is not familiar could use a phone’s video recording capability to transmit footage from the loss site and collaborate with home office staff or other experts in real time to get the right questions asked at the scene.

The third objective for insurers is device consolidation—replacing a tape measure, camera, voice recorder, cell phone, and more with a single piece of technology. “The idea is that by using an iPhone, we can reduce the amount of equipment in the field. That creates costs savings and efficiency,” says Radgowski.

“Equipping [adjusters] with iPhones also has the potential for the expanded use of business apps they’ll have access to,” he adds. Farmers is developing a number of apps for its adjusters, which Radgowski declines to detail for competitive reasons.

Insurers are currently in the evaluation stage regarding tablet computers, which have exploded in popularity in the consumer market in recent years. According to an April 2011 report by Gartner, sales of tablets such as Apple’s iPad will more than quadruple from 15 million worldwide in 2010 to 70 million in 2011 and nearly 300 million in four years.

“We believe they [tablets] can potentially replace laptops, but right now ruggedness is a challenge,” says Mark Hofmann, claims technology manager at Esurance. “Currently, we use ruggedized laptops that work well for us. Being outside, on the job site, or out in the weather are considerations of usage that we need to take.”

“We use iPads heavily in our claims training, but we haven’t found a way to ruggedize them for the field,” says Radgowski. “At some point, I can envision all our field reps having a tablet as a supplement to their laptop, but the heavy data entry will probably still be done via laptop.”

There are ways to deploy tablets in rough applications. In the secondary market, there are any number of rugged tablet cases, including ones made by OtterBox, Hard Candy, and Trident that are popular with construction firms.

Yet the future of tablets—whether iPads, Android-based, or Widows-based devices—in claims departments remains unclear. “The mobile tools of the trade in claims still tend to be the phone and laptop,” Pauli says.

THE MOBILE CUSTOMER

Some have questioned whether it pays to develop mobile claims technology—either mobile-optimized Web sites or downloadable smartphone apps—for a process that most people will do, hopefully, very infrequently. However, the University of South Carolina’s i3 program, which studies the insurance technology industry, predicts that in the near future both smart-phone apps and mobile Websites will be capable of a full range of insurance transactions, from quoting and buying insurance to making claims.

“The number of transactions on the claims side is low compared to the number of other activities customers are doing,” Rao says. “But if you look at the value of having a claim adjudicated more quickly because of being able to file a first notice of loss or collect claim data via mobile, it can have a significant impact on the value customers perceive they obtain from a company.”

“Insurers may get more bang for their buck with adjuster-focused technology, but they get more marketing flash with customer-focused apps,” Pauli says.

Esurance currently allows glass claims to be reported via its mobile app, available for iPhone, Android, and Windows 7 devices. The app provides a seamless process for both customers and Esurance, with claim and coverage data automatically transmitted to the insurer’s glass repair partner, HSG.

Currently, 12 percent of all claims reported by Esurance customers using online channels are glass claims processed through mobile devices. However, the company remains cautious of extending mobile reporting to other lines. The issue, according to Hofmann, is that customers are not claims adjusters.

“We want to ask enough questions so that we can intelligently process the claim, yet not make it a frustrating experience for customers,” he says. “We have a top-notch claims reporting process for customers according to JD Power, and we don’t want to impact that. We don’t want someone to spend 20 minutes entering information into a mobile phone to begin a claim or, worse yet, entering that and then having to give more information to a call center rep just to get started.”

Hofmann says that Esurance customers have expressed greater interest in receiving claims status updates via mobile than in reporting claims. “Nobody enjoys having a claim, but they enjoy receiving and even sharing claim status,” he says.

Customers can use Esurance’s Repair-View functionality via a smartphone app or mobile Website to get status updates and estimated completion dates of repairs in real time, receive and view photos of car repairs in progress, and send those pictures to friends via email or Facebook. Customers can email the car repair shop directly for more information or call the shop or their claims adjuster with the push of a button.

“We’re constantly looking for ways to provide more, and more effective, communication and collaboration through mobile devices. We’re also looking for logical extensions of capabilities to mobile devices, such as e-signatures and real-time notifications,” Hofmann says.

ON THE OTHER HAND

Other carriers have jumped feet-first into the world of mobile claims reporting. Farmers—known for its fleet of high-tech Mobile Claims Center busses—allows customers to initiate a claim for either auto or home using its Farmers iClaim app for iPhone, Android, or Blackberry devices. First released in October, 2009, iClaim was developed fully in house by Farmers in about 90 days. The current version was released in early 2011.

Customers use iClaim to enter basic loss information and contact details. That information flows back to Farmers’ first notice of loss system, which triggers a callback by a Farmers HelpPoint service agent to the customer. That call happens within 15 minutes, according to Radgowski.

Policyholders can also submit driver and vehicle information and upload photos of the accident or property damage. The iClaim app also includes a three-dimensional modeling component, where users can tap on a rotatable vehicle image to indicate areas of damage and provide additional detail.

Future upgrades of iClaim will include electronic funds transfer (EFT) integration, which will enable policyholders to take a picture of a voided check to enroll in EFT for claim payment. The company is also working with several of its third-party vendors, including towing and glass companies, to create tighter integration for push-button data transfer capability between the phone and the repair provider.

In November 2010, Amica launched its iPhone app, developed for the insurer by Five Mobile. That launch was followed by a launch for Blackberry and Android platforms in January 2011.

The app project was driven by the claims department. “Claims was the first proponent of going into the mobile app space,” St. Onge reports. “We also wanted customers to be able to have claims capabilities in a connected or unconnected state. Customers who have just had an accident, for example, can collect information from the other driver even they are offline and then send that information to Amica when they establish connectivity.”

Amica’s app lets customers file an auto claim for physical damage, theft, towing, glass, or injuries. Homeowners claims can be filed for property damage or personal injury. Web services prefill policy data to the app, and integration with ClaimCenter generates a claim number and returns it instantly to the customer after a new claim is submitted.

Amica’s app also lets claimants enter detailed information—screen after screen of it—about a claim using either text input or voice recorder. This information isn’t required, but customers tend to complete it. “We are impressed with the detail and quality of information being provided,” St. Onge says. “Our experience is that we are getting many photos of vehicle damage, which gives the claim handler a good starting point.”

BENEFITS

But just how well used are mobile claims apps? For Amica, it’s too soon to say. “We’ve been pleased with the results, but the app is fairly new,” Rasmussen says, declining to state specific usage figures.

Even with its suite of capabilities, Farmers’ iClaim is used infrequently: just a few claims a week on average, or a handful a day if there is a severe weather event. Claims reported via iClaim are split about 50/50 between auto and home.

That doesn’t surprise Pauli. “Let’s face it. If someone has had a serious claim, they want to talk to somebody,” she says. ” First notice of loss on a phone, that’s good, but you have to develop apps with an eye toward practical functionality.”

But Radgowski says the ancillary benefits of iClaim to Farmers should not be underestimated. “There are several parts of the value proposition,” he says. “We wanted to give adjusters a leg up—another tool to use. There’s also a marketing value to having the app out there. And on the backside, it gives us the ability to collect more information on a claim.”

That last benefit points to a growing future of using mobile tech to help in claims investigation. “From the insurers’ point of view, mobile capabilities can make a big dent in the loss cost by providing more claim detail and by shortening the length of time it takes to process a claim,” Rao says.

“By receiving additional information from customers up front, it certainly improves our overall efficiencies in claims handling,” St. Onge says.

Rao says customer-facing mobile claims technology also has a benefit to fraud-fighting. “There is padding that occurs in claims because people go back home, talk to friends and family, and then slightly exaggerate their claims,” he explains. “That padding can be reduced if more people will use the mobile device to collect information on the spot about the extent of damage.”

Rao also sees promise in the application of additional mobile technology, such as augmented reality and telematics, to field claims adjusting. Augmented reality (AR) refers to overlaying additional information onto a real set of data when seen through the camera on a mobile device.

“You might have an accident scene where you take a picture of the license plate and an AR app overlays information regarding the vehicle, insured, and other information,” Rao says.

For instance, in a home claim, a user could take pictures of damaged content or property and be able to overlay that with information about the replacement value for content as well as the location of the closest retailer. However, that technology is still in the developmental stage.

“Currently, no one has written software specifically for insurance, but we have seen it in other applications,” Rao says, such in travel apps that overlay identification and navigation information on a real-world view.

Rao believes that telematics, being explored by some insurers for underwriting and policy rating, will move into claims thanks to smartphones and other mobile devices.

“On one hand, we will see more telematics capability embedded in vehicles and other equipment. On the other, mobile technology adds geospatial information to the equation,” he says. “That will start to play into claims analytics and litigation. There is the possibility of using a telematics device to reveal not just the speed of the car, but its precise location at the moment of loss.”

GOING FORWARD

“The mobile channel is becoming one additional channel for claims filing and processing,” Rao says. “However, it will take some time for people to get used to filing claims by using a mobile app.”

The i3 program projects that, by the end of 2011, more than 1 billion people around the world will own smartphones or other mobile devices such as tablet computers, noting that mobile technology is already altering customer expectations around many insurance processes, including claims. This points to the growing impact mobile technology will have on insurers’ claims operations—and the potential of a widening rift between the mobile haves and have-nots.

“There are still carriers out there that give adjusters a cell phone and an estimating tool and say good luck. Others are still doing paper estimates and having to reenter them,” Pauli says. “Those carriers are the furthest behind in mobile technology, but they also have the most to gain from making the investment in it.”

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