It's not surprising that 2017 will be remembered as the landmarkyear for the digital transformation of claims processing within theproperty and casualty insurance industry.

After all, it was the year we saw the use of drones for homeroof inspections, auto appraisals via photos, customer video chatsand bots used in claims processing. While many of these solutionshave been topics of discussion in the industry for quite some time,insurers began to implement them in earnest through new technologyduring 2017.

Here's a deeper look at what we think are the top 10 reasons why2017 should be considered the kick-off year for digitaltransformation in insurance claims:

1. Big data made a big splash

While Big Data has been widely used within insuranceunderwriting for several years, in 2017 we saw multiple and variedBig Data claims applications emerge. For example, LexisNexis RiskSolutions rolled out Claims DataFill to a number of insurers whowere seeking actionable data at first notice of loss (FNOL) toexpedite the first report and collect critical data needed forclaims adjudication. This solution accelerates the claims handlingprocess. You can find many other examples of innovative Big Dataapplications within the insurance sector in this 2017 Recap blog post, written by LexisNexis CEOBill Madison.

2. The 'touchless claims' vision became real

As digital capabilities become more robust and customersincreasingly demand digital in every aspect of their lives,fully-automated claims processing is evolving into a strategicimperative. In a recap of our Future of Claims Study, you'll see that thecompelling vision of the “touchless” claim is turning into areality. Insurers are accelerating their movement along theautomated claims processing continuum in order to drive greaterefficiency, increase profitability and most importantly, deliver abetter customer experience.

3. Photo-based appraisal displaced in-person autoappraising

Speaking of touchless claims, insurer Allstate demonstrated itscommitment to a more virtual claims handling approach through theclosure of its drive-in appraisal centers in favor of photo-basedappraising, made possible through its QuickFoto mobile app claims option. Thecompany also made additional investments in other digitaltechnologies that support photo-based appraising includingtheir Virtual Assist solution for auto bodyshops. These investments are already reaping benefits for Allstatein terms of faster customer service and greater processefficiencies.

4. Drones became the new 'insurance inspector'

With four hurricanes striking the UnitedStates in 2017, drones were quickly put to work to allowinsurers to accelerate roof and exterior inspections. A drone couldalso travel into flooded areas to give adjusters access even beforethe waters subsided. There were several media spots highlightingthe use of drones in claims including NBC'sToday show, where executives Glenn Shapiro of Allstate andPatrick Gee of Travelers were interviewed about the benefits ofdrones for expediting home claims. In 2017, we learned that usingdrones can shave several days off of claims processing time, freeup human resources for more valuable and strategic tasks, and saveinsurers money.

5. Interactive features strengthened relationships withcustomers

The digital world offers a plethora of tools that can help insurersimprove every aspect of the claims process, from FNOL through closure. A veryimportant element in the entire process is the customer experience.Features such as video chatbots that can interact with customers onsimple processes, voice analytics that sense customer mood andbehavioral analytics that predict customer needs not only increaseefficiency, but also create a stronger connection between insurersand their customers.

6. Chatbots became sociable

Consumers spend a lot of time on social media, so ProgressiveInsurance is meeting up with them online. In October 2017, thecompany announced the launch of its artificialintelligence chatbot on Facebook Messenger. Prospective and currentcustomers can access the chatbot through the company's Flo'sFacebook fan page, thereby extending Progressive's reach to upwardsof 1.4 billion active Messenger users. Including these types of AIfeatures in customer outreach capabilities is likely to becomestandard practice, as insurers continue to digitally transformtheir businesses to remain competitive and better serve theircustomers.

7. Claims apps became integral to the claims processing digitaltransformation

While undergoing a digital transformation is, in some aspects,unique to each insurer, a simple three-step strategy serves as a usefulcommon template. Step three in this strategy is embracing the righttools to meet business needs. Insurers now have a broad suite ofoptions and applications available to help them digitally transformtheir organizations for the best outcomes. Options includemobile capture, process intelligence, customer communicationsmanagement, robotic process automation and case management.

8. Telematics entered its next phase

Telematics has proven itself as a foundation for usage-basedinsurance, providing valuable information to the insurer whilehelping customers become safer drivers and reduce their premiums.But the technology is far short of maturity in terms of the broadervalue it can offer both customers and insurers. This forward-thinking LexisNexis Insurance Insights blogpost explains the telematics opportunities that lie aheadin the areas of proactive customer care, process improvements andimproving data to drive better decision making. For example,telematics shows great promise for driving more efficient claimsmanagement as well as helping to prevent fraud through real-timealerts and an expedited claims cycle.

9. Accessing police records became easier and more accuratethan ever

Police reports have long been an integral part of claimsprocessing. However, accessing the reports and rekeying importantinformation from them is time consuming, can result in inaccuraciesand doesn't take into account the future value of thedata. Automated police record retrieval haschanged all that. Claims adjusters can now instantly order andretrieve police report data in real time, then automaticallyintegrate that data and its data elements not only into an existingclaim but also into the claims system for future retrieval. Thesecapabilities create greater efficiencies and also enable insightsthat can drive future decision making. Automated police recordretrieval promises to be a game-changer for the industry.

AI transformed the customer experience

Often associated with a negative event (like an auto accident ora personal property loss), contacting an insurance agent istypically not top on the list of things customers want to do. AI ischanging all of that as 2017 marked the year AI came into its ownwithin the insurance industry in a number of ways, includingproviding a much more compelling and satisfying customerexperience.

For example, the insurance industry is exploring multiple waysto leverage AI in claims to enhance the customer experience andshave days off of claims processing time. Additionally, AI enablespersonalization that enhances the customer relationship without anyhuman interaction required.

Clearly, 2017 was the year of innovation implementation forclaims. With so many promising new technologies and capabilitiesgaining traction and establishing a solid foothold within theindustry, the future looks very bright. We expect to seeacceleration in claims automation during 2018 as companies build onthe technology advances of the 2017 landmark year for launchingclaims automation.

Bill Brower is the vice president, product management,claims for LexisNexis Risk Solutions. Email himat [email protected]. This articlefirst appeared on LexisNexis Insurance Insights and is reprintedhere with their permission.