Innovation and technology have played remarkable roles in the lives of millions. Think about where we would be without our smartphones, tablets, and the Internet. From a claims perspective, consider where we are today when compared to the manual processes of just a few short years ago. While this may seem amazing, the steps in our industry have paled in comparison to others in the marketplace.
It is now possible to shop without going to a store, bank without going to a bank, and travel to the other side of the globe for virtual meetings without ever leaving the home. The virtual world is upon us where things, while often impersonal, have evolved to the point where we see results with the click of a mouse.
So what does this mean for the world of auto insurance? Is there a new virtual reality for insurers? The answer is yes, and it is the concept of self-service claims.
Just as we shop, fly and communicate virtually, so too can we adjudicate claims. While not every claim will meet the model, many claims will; which in turn enables insurers to redeploy staff to more complex situations.
Automate Low-Severity Claims
Self-service claims are designed to handle lower complexity situations that do not justify the cost of dispatching a staff appraiser or an independent adjuster. Think of these situations, lower cost material damage claims that can be used to drive down severities, loss adjustment expense (LAE), and cycle time while improving both customer satisfaction and retention.
In the simple model, the accident victim contacts the insurer who utilizes a predictive process to determine if the vehicle is repairable. Based upon a variety of criteria, the claim may receive a self-service designation. At this point, the vehicle owner obtains an estimate from their shop of choice that will, in turn, work with the carrier or business partner to achieve an amicable resolution.
Certainly this may be easier said than done, right? What about fraud, pre-existing damages or inflated repair costs. In the traditional world, these would have all been valid concerns. However, with the right technology in place, all of these concerns are proactively addressed.
The key isn’t that the process will fail, but rather that the company using the process lacks the right tools to ensure success. Carriers currently using this process are seeing dramatic improvements in across the board metrics. They are also reaping the rewards of being able to have existing staff focus on claims that have traditionally higher leakage rates.
Customers are benefiting from the perception that they are in control of the process. Certainly, carriers never lose ultimate control; however this empowerment creates goodwill among policyholders who are only too happy to renew. Claimants may also be enticed by the insurer’s awesome customer service and consider switching providers.
This type of transformative philosophy will redefine the auto insurance industry in years to come.
By leveraging innovative new technology, the virtual reality of cloud estimating is now upon us. While this is just one facet of the future of claims, there has never been a better time to seize the opportunity and the subsequent benefits.
“Innovation distinguishes between a leader and a follower” - Steve Jobs