Welcome to the world of no-touch claims handling. Imaginethe scenario of being involved in an accident, snapping photos ofthe damage with your smart phone, submitting them to an insurancecarrier portal, and then receiving electronic payment withinminutes. This may very well be the future of insuranceclaims.

According to National Highway Traffic Safety Administration(NHTSA), there were 5.4 million car crashes in the United States in2011. Fatalities totaled 32,885—the lowest in 62years. Preliminary figures for the first three months of 2013point to the ongoing trend in traffic-relateddeaths. Based on statistical projections it released lastmonth, NHTSA anticipates a 4-percent decrease—or 7,200 deathscomparted to 7,530 reported last year. Althoughfatalities rose in 2012, they declined by about 26percent from 2005 to 2011, NHTSA adds.

Safer Cars, Higher Claims Costs?

Presumably as cars get safer, the number of people killed orseverely injured will continue to decline. The trade-off forsafety, however, will be higher repair costs. Thishas the potential to result in a fundamental shift in the waya certain subset of claims are handled, giving rise to low-touch orpossibly even no-touch processing.

Does this have negative implications for claimspersonnel? To the contrary; it would free up existingstaff to accomplish more complex, meaningfultasks such as digging deeper into personal injury protection(PIP) claims or investigating potentially fraudulentactivities.

So, just how would the no-touch environment work? The keyto success lies in the triage process, whereby predictiveanalytics, such as that being developed by MitchellInternational, would be able to accurately predictoutcomes in claims within a specific degree ofprobability. Consider, for example, a PIP claim beingpresented by an insured who sought immediate medical care after theaccident. What if an insurance carrier had the capability toknow this would be the first and onlybill? Rather than assign an adjuster to make contact with theinsured, process the payment, and cue the diary for follow ups,the bill could be routed to an automated queue for anelectronic payment to the medical provider. On the other hand,predictive scoring can help identify those claims with a highprobability of exceeding policy limits regardless ofclaims-handling efforts. These claims may also warrant “hands-free”adjudication, but not without careful monitoring.

No- and Low-Touch Auto Claims

This has the potential to hold true for physical damage claims,as well. Whereas some accidents will always require certainkey investigative steps, others may not. A significant numberof car crashes involve clear liability with no bodilyinjury. The no-touch approach provides insurance carriers withthe capability to create loss reporting apps that can be downloadedto smart phones. When the carrier issues a new policy,instructions are placed on electronic insurance ID cards to guidepolicyholders about what steps to take following theaccident.

This “card” is represented by an icon on the smartphone. The insured would then select it after afender bender and follow the instructions. He or she couldsnap pictures of both cars, obtain the information of the otherparty, and submit the claim. The carrier may then initiate theclaims process, immediately arranging for transportation and arental car. In a likely future state, these tools will blend theautomation based on technology with simplified human interaction.For example, the extent of deformation or damage may best be minedfrom analysis of the image itself combined with a short verbaldescription recorded by the claimant on his orher smartphone.

The insurance carrier will have the ability to leverage a numberof technological tools to rule out fraud or pre-existing damage;the photos of the damage can be scanned for metal deformation torecreate the accident and virtual estimatics could generate aninstant estimate. Electronic payment would be sent to theinsured bank account of record. As part of the reportingprocess, the claimant EBT routing instructions could also begathered.

Of course, these types of claims are a subset of allclaims, which will also benefit from improvements intechnology. Consider the situation of disputed liability whereboth parties use their own carriers. While the insured may bethe beneficiary of a low- or no-touch handling process, tools suchas Mitchell's ClaimIQ could be used to determine liability. Inaddition, such tools can potentially interface with applicationssuch as E-Subro Hub, to resolve disputes between carriers.

Moving beyond predictive analytics, consider the implicationsthat further advancements in black box technology may have indetermining driver behavior and vehicle motion leading up to, andduring the accident. Having the ability to harness suchtechnology during claims investigations involving situations ofshared liability or injury cases could have significantimplications on how claims are resolved.

By capturing information about speed and braking, recognizingmetal deformation and principle direction of force and g-forcesexerted on vehicle occupants, more accurate injury assessments canbe made within a statistically valid degree ofprobability. Being able to biomechanically refute certainclaims will provide positive outcomes for the premium paying publicin general, who today is faced with rising costs even though themajority of motorists very rarely, if ever, make claims.

There are a few certainties in life: death, taxes and change.The latter is really the only constant with which wehave any control. Those who embrace change tend to be theinnovators. Of course, it is the innovators who become industryleaders. They rapidly gain marketshare from those who hold onto the status quo, which is very pervasive in the financial andinsurance industry. But with each passing day, technology isadvancing. Those who leverage technology to make their peoplemore efficient and their process more robust are virtuallyguaranteed of gaining a significant competitive edge in themarketplace.

Christopher Tidball is a casualty claims consultant withMitchell International and the author of multiple claims processimprovement books.

Keith Peterson is the vice president of analytics atMitchell International.