When faced with changing dynamics or imminent disruption,business executives tend to respond in one of three ways:

1. Many will simply do more of what they've always done, puttingtheir tried-and-true “success formulas” into hyper-drive.
2. Others will wait for the “dust to settle” before takingaction.
3. A few bold explorers will seek out innovative newsolutions.

“Quick fixes”

Faced with falling profits caused by rising collision repaircosts, claims counts and accident severity, many auto insurers aretempted to choose Response #1. Despite the availability of moderntechnology platforms that can dramatically lower costs and improveadjuster efficiency, claims managers may be tempted to rely on the“usual suspects” — quick cost-cutting fixes that have worked in thepast. But this time around, these quick fixes may cost autoinsurers more money than they save. Worse: they may also damagecustomer service and retention efforts.

From 2008 to 2014, auto claims managers were accustomed torelative consistency in loss payouts. Auto insurers enjoyedrelatively flat accident and severity rates, as well as decreasingloss frequency, thanks in part to high gasoline prices.

But times have changed. Starting in 2015, gas prices beganplummeting, which encouraged more Americans to hit the highways andled to an increase in accidents. Add to this an increase inaccident severity rates, fueled by rising repair costs, and it'shardly surprising that major auto insurance companies are nowbleeding money.

So what can claims managers do?

Tech-based solutions

They can turn to modern, technology-based solutions.

Instead of relying on the same old cost-cutting methods (e.g.,trying to reduce vendor fees, cutting corners and asking staff todo more with less), they can adopt modern technology that lets themunify the claims process by integrating all its vital componentsinto one platform. Adjusters now have a wealth of data at theirfingertips, allowing them to settle claims faster and moreaccurately. In turn, this helps them deliver better customerexperiences — experiences that will encourage more customers torenew their policies.

Adopting the new platforms will require claims managers to adopta different mindset, one that focuses on measurable, long-termoutcomes instead of short-term “phantom savings.”

Caveat: Tech solutions must be intelligentlyapplied

Although new technologies can improve both the accuracy andefficiency of adjusters, it's important to realize that thetechnologies themselves are not a panacea. In fact, dispatchingthem as cost-cutting cure-alls can produce truly disastrousresults.

For example, some auto insurers are aggressively usingself-service mobile apps in ways that are completely inappropriatefor this method of inspection (MOI). (The apps allow vehicle ownersto take their own photos of vehicle damage. Estimates are thenwritten in-house or by an outsourced vendor.) Self-service andphoto estimating solutions have their place, but using them withoutregard to accident severity or claim facts is guaranteed to producebad results. It should come as no surprise, therefore, that someinsurers have been drowned by tidal waves of supplements afterwriting almost every damage estimate from vehicle owners' photos.This is an example of why technology must be intelligently appliedgiven the inherent inaccuracies of a photo estimate beyond simpleniche type losses.

Sooner or later, every claims manager will need to embrace amodern unified claims platform. By integrating systems such asACD's AutoLink®, auto insurers gain the ability to intelligentlydispatch and route claims efficiently. Through easy-to-use moderntechnology, ACD is able to connect clients with the proper MOI foreach claim to achieve the best outcome — every time.

It is the intelligent application of these visionaryplatforms that makes them such powerful cost-containment tools. Andunlike the quick fixes of yesteryear, their benefits are immediateand long lasting.

Ernie Bray is the CEO of ACD.