In automotive claims, the concept ofself-service is evolving as consumers, particularly those of theGeneration Y era, want to be positioned front and center—and inthe driver's seat—when it comes to having more control and betteraccess to claims and insurance information. From allowing driversto actively participate in first notice of loss (FNOL) with photos of vehicle damage, toletting them view the progress of their automotive repairs online,and offering Facebook integration for the insurance apps theyuse—insurers are unveiling a whole new world of technologyinnovation and self-service to vehicle owners today.

The driving force behind all of these advancements not onlyincludes the ever-increasing need to improve the customerexperience across the full lifecycle of the claim, but also thechanging demographics of the marketplace and its impact on the wayinsurers do business.

From Steady Evolution to Revolution

The insurance industry enjoyed a dynamic, steadily evolvingmarket environment through most of the 20th century. Ever-presentrisks, regional disasters and personal calamities would come in andout of people's lives; yet, with careful planning and attention,policies were there to rescue the consumer from financial loss.Furthermore, the basic roles of service providers and customersremained relatively stable.

The 20th century also saw the creation of government-sponsoredinsurance—social security, most notably. Additionally, privateinsurance continued to introduce innovation in the way of productsand policies. Indeed, the industry has continued producing some ofthe most forward-looking and strategic ideas in the business world.A hallmark of the U.S. insurance industry overthe last century has been its capacity for bringing financialstability to companies, families and whole classes of people thatin other parts of the world—or in other times—may not have fared sowell.                        

The insurance trends during this period showed incremental,steady evolution—not revolution. Now, we see insurance practiceschanging dramatically—and in ways that couldn't have beenpredicted. The drivers of change lie outside the industry itself.With the steady acceleration and adoption of consumer technologyand the almost overnight pervasiveness of the Internet and mobile technology, the insurance industry (along with mostother industries) has faced daunting challenges:

• With so much technology and information in the hands ofconsumers, expectations for service have dramatically expanded.
• Consumers, ready to flex their muscle in what has beendescribed as the "Quiet Riot" of the consumer revolution,demonstrate willingness, even eagerness, to participate in theclaims and resolution process.
• As consumers continue their quest for more convenience, lowerprices, and even faster service, insurance companies must addressthese concerns while also maintaining a viable business model.

Two primary factors have contributed to this seismic shift inthe insurance industry:

1. The changing demographics of the market; that is, agenerational shift from baby boomers (born 1946 to 1964) toGeneration Y (born 1982 to 2002).
2. The transforming impact of consumer technology—from smartphones, ubiquitous social media, interactive websites and"always-on" networks.

Some business and service organizations—eager to identify, serveand retain their clients—may find the current business environmentsomewhat disorienting. Others, with the support of industryleaders, technology partners and training professionals, will findthe new landscape exhilarating, lucrative and rewarding.

Let's examine the changing landscape of insurance services byfocusing on new trends and practices in a particularly dynamicsector: automotive claims.

Auto Claims Processing

Self-service may not seem like a new concept, but, theself-service model was virtually unknown to consumers 100 yearsago. Since that time, we've seen elevators, gas stations,buffet-style restaurants, ATMs, self-checkout lines, and countlessmore examples of the movement to the self-service model.

Interestingly, the first self-service grocery store wasintroduced in 1916. Entering through a turnstile, shoppers walked afew aisles and selected their purchases from several hundred itemsbefore proceeding to the checkout stand. At the time, this wasrevolutionary.

As the Internet age ushered in e-commerce, shoppers were givenunbounded selection, payment and deliveryoptions—for example, shippingpreferences—that were not prevalent in the "brickand mortar" realm.

More recently, we've seen a continuing trend to self-service inthe Internet era. The company Yelp (yelp.com), for example,represents a self-service, consumer-sourced, connected and mobilereferral engine. Yelp offers site visitors (now pushing past the100 million per month level) the ability to record reviews ofconsumer experiences and to browse reviews posted by others. Noconsumer-facing establishment—restaurants, retail stores, autorepair shops, insurance agencies, just to name a few—is beyond thereach of either favorable or unfavorable Yelp reviews.

Self-service is a trend that shows no sign of slowing down andthe Internet has proven to be its natural accelerating agent.People like self-service as a concept, as a self-empowerment tool,and as a regular practice to fuel their decision making in almosteverything they do. Self-service can also be seen as a greatequalizer. Yelp reviews, for example, can allow even the"hole-in-the-wall" eatery across town the opportunity to beconsidered, even favored, over the more prestigious or established"chain" restaurant down the block. This, again, demonstrates the"Quiet Riot" marketing concept that challenges every business tomake adjustments in how they engage their increasingly influentialcustomers.

Now, consider how this self-service trend has expressed itselfin the automotive claims sector. Although not particularly an earlyadopter of self-service, the auto claims sector is nowdemonstrating rapid progress in catering to consumer preferencesand behaviors. Today's auto insurance consumer is increasinglycomfortable staying actively involved in the claims process, wadingthrough data, embracing consumer technology, and receiving constantstatus updates. Today's drivers, in other words, really like "beingin the driver's seat" when it comes to their claims.

Insurers are finding that when consumers are involved in theprocess, less manual intervention, such as phone calls, arerequired, and customer satisfaction is higher. But it's notautomatic—this win-win situation requires making the righttechnology tools available to consumers. 

Claims Processing and Self-Service

First of all, the natural fit between the empowerment ofself-service in a data-rich world and the rising prominence ofGeneration Y (predicted to eclipse the buying power of the boomergeneration as 2020 approaches) will drive the rapid implementationof technology solutions in the automotive claims industry.

Let's take a closer look at some widely accepted attributes ofGeneration Y to see why this generational shift has such powerfulimplications, not just for auto insurance but also for allbusinesses:

• Whereas boomers evidenced patience, idealism and a competitivespirit in their early adult years, Generation Y craves immediacy,connectivity, and tolerance in a socially diverse world.
• Whereas boomers fought their way into adulthood with a healthydistrust of authority, Gen Y has retained in their early adultyears an unprecedented financial dependence on their parents. Nowadd to this Gen Y's talent for extreme multi-tasking.
• Whereas boomers took on risk—for example, credit—to achieve ahigher standard of living, Gen Y demonstrates a sense ofconservative entitlement, meaning they expect to pay less—even asthey are not only more demanding about product and servicepurchases, but they are also more reliant on borrowed familywealth.

Furthermore, these defining characteristics of Generation Y seemto hold globally, not just in the U.S. A four-phase centralEuropean study, for example, studied millennial consumers for thepurpose of better planning future service and product offerings forauto insurance. The conclusions, while noting a slightly sloweradoption rate of mobile technologies, were entirely consistent withstudies in the U.S. Even though Gen-Y consumers in central Europewere generally satisfied with the claims process, they saw room forimprovement in several key areas: the process seemed to take toolong (immediacy), the value they received did not entirely meettheir standards (entitlement) and there was a lack of transparencyduring the process (connectivity).

Claims Processes Today

When choosing an insurer, consumers will favor a company thatoffers technology and tools to enhance the customer experience —online bill payment, mobile apps for self-service, social mediaoptions, web resources, etc. Accidents — typically happening onceevery seven years for consumers — become critical events not justin terms of life and safety concerns but also because theinsured/insurer relationship is really put to the test—possiblystrengthened or abandoned as a result of the claims experience.

Traditionally, when filing a claim, a driver starts with two orthree phone calls to the insurer, the appraiser and the collisionrepair shop. The driver may even be requested to visit the repairshop to get an estimate or appraisal. Currently, we are seeing thisprocess change dramatically with the relatively recent introductionof mobile apps, which allow consumers to initiate and manage theirclaim on their own time. Technology is already becoming availableto guide people to take the exact photo that the insurer mayrequire to document the vehicle damage. And drivers can beimmediately dispatched to the collision repair shop offering thebest availability for the repair, along with a convenient locationand the highest customer satisfaction ratings.

In the aftermath of an accident, the consumer will more likelydecide to stay with an insurer if the customer experience isenhanced and streamlined with integrated mobile claim services;easy and simplified participation; a handy repairer referralengine; and overall transparency. Insurers who boldly andintelligently move into this new tech-driven approach to claimsprocessing will enjoy considerable rewards—higher retention, highersatisfaction, increased referrals, and an enhanced reputation forrelevance in a changing market.

The mere presence of technology doesn't earn these rewards,however. Insurers must develop, test and employ technology thatmeets customer expectations.  

Looking Far Ahead Into the Future of Claims

It won't be long before the tech savvy offerings of innovativeinsurers become the norm across the industry. As we move forward tothe 2020 horizon, we will surely see more and more technologyintegrated into auto claims processing. Keep in mind that rightbehind gen Y is the emerging Generation Z—even more grounded intechnology with consumer behaviors that reflect a lifetime ofnothing less than super-broadband wireless connectivity, always-onnetworks, immediate gratification and touch devices. By 2020, thepurchasing power of gen Y and gen Z will dominate themarketplace.

With innovation already delivering a user-driven experience,what could possibly emerge as new trends in auto claims processing?Consider that instead of the driver, the vehicle itself—connected,smart and properly linked to customer profiles—may initiate andmanage the claims process, keeping all parties in the loop. Choiceof repair shop, scheduling of key decision points and even postingof notifications could easily fall into the scope of vehicle-basedcapabilities.

Or consider a distributed intelligence across cars, smart phonesand other devices, mediated by cloud services that would seamlesslyact as the coordinating power behind every aspect of the claimsprocess—initiation, management, updates, resolution and anever-expanding experience archive. Even more startlingdevelopments—by today's standards—will likely come down the pike:think wearable technology that helps the driver better see twistsand turns in the road, and makes further use of augmentedreality-type innovations to guide the customer through their claimtriage and repair options.

Central to all services, and their success, will be the changingmedia and technology behaviors of the consumer. For those insurersthat actively monitor and adapt their product portfolio to addressthe changing marketplace, a solid future is assured. Byestablishing a planning horizon 10 to 20 years out, insurers willnot only meet the expectations of the current overlapping set ofgenerations, but also prepare for every "next generation" to come.Beginning on the next page, we review fourtechnology drivers set to impact the auto claims realm.

Four Tech Drivers ImpactingAuto Claims Handling

1. Intelligence

The FNOL process provides a fitting example of how claimspractices can be transformed with a measure of built-inintelligence. Ideally, as FNOL just starts to take shape,associated technologies should gather high-level information tomake sure a self-service approach makes sense for a particularclaim. In some instances, such as in cases of extreme emergency orwith complex variables, the effectiveness of self-service can belimited. But for many claims, self-service tools enrich and addvalue to the customer experience.

The intelligence surrounding self-service claims gives thecustomer peace of mind and builds trust: when an insurer canprovide a customer with up-to-the-minute account data,instantaneous identification of their vehicles—beyond make andmodel to include special factory-installed packages and options—andthe ability to communicate their claim information electronically,the user experience is optimized.

Armed with this information on a mobile device, drivers canconveniently be more involved and informed up front about the claimprocess and their predictive and recommended options forresolution, all while streamlining the insurer's end-to-endprocesses.

Claims technology providers are just catching on to this idea.Modern day innovation is helping with this by using predictiveanalytics, performed on millions of historical claims, to analyzecorrelational relationships across underwriting, policy, driver,automobile, accident and geographical data, to name a few, topredict and present the user with the best options for claimprocessing and resolution. The resulting matrix of structuredintelligence enables insurers to serve their customers faster andmore intelligently, from the point of FNOL until the claim isresolved.

2. Simplicity

When a customer has the nagging feeling that time is beingwasted or that effort is being duplicated, self-service claimsprocesses can also fail. Furthermore, the tools in play—mobile andweb-based apps—must be flexible enough to serve both inexperiencedand tech-savvy customers. That said, no matter where the driver'slevel of tech experience may lie, it is critical for insurers tokeep processes simple and transparent.

One new trend along these lines is to allow vehicle drivers totake photos at the accident scene for use in the claims andestimating process. This expedites the claim and allows insurersand repair facilities to more quickly jump into action. Usingmobile technologies, such as augmented reality, innovations existthat now guide users to take insurance adjuster-quality photoswithout having any prior experience.

This technology overlays specific vehicle outlines on top of thelive camera feed on their smart phone or tablet to help thecustomer line up the "perfect" shot before taking the photo andsending it to the insurer or repair facility. By empowering driversto take their own accurate and consistent photos of their vehicledamage, insurers are involving them as an effective participant inlaunching an efficient and cost-effective claims process. As a"member of the team," the driver has interests that align withthose of the insurer and repair facility in achieving a timelyresolution.

3. Engagement

A primary driver of the success of mobile devices—smartphonesand tablets alike—has been their intuitive and engaging graphicinterface, further enhanced by direct touch technologies. Thesedevices have given consumers higher expectations for how technologycan deliver power and speed, all in an attractive interface.Gamification—that is, the integration of gaming strategy and gamingprocesses to increase customer engagement and enhance trainingopportunities—will also impact self-service claims in the nearfuture. It could even add some fun and levity to the process.

Further, when insurers, appraisers and repair shops showcaseapplications that are sophisticated visually— with 3D graphics andmodern touch navigation—consumers have greater confidence that thevendors they've chosen to partner with for their claim are bothcapable and reliable. Indeed, the idea that perception isreality holds true in automotive claims. When that technologydemonstrates that all parties in the claims ecosystem are workingeffectively together to produce more accurate and intelligentresults, what ensues is a greater level of customer trust in theinsurer's brand.

4. Information

Once the claims process is launched, consumers need to becontinuously informed about the process. What is the process? Wheream I now in the process? What is next? Drivers appreciate regularupdates to support both the perception and the reality that "all isgoing well." Savvy insurers are already offering communication andnotification apps that strike the proper balance between providingample information while minimizing intrusiveness.

Again, putting tools in the hands of the consumer gives them thepower to monitor and manage the entire process. Responding to thecommunal, always-connected tendency of gen Y customers, a number ofinsurers even provide easy "share" tools so that customers canconveniently post car repair updates to their Facebookprofiles.

Further extending the sharing of information and taking the Yelpapproach, insurers are also providing drivers the capability toprovide feedback on their experience during the repair process.This helps the next customer crowd source a reputable andhigh-quality facility for their vehicle—and lifts the visibility oflocal, good-quality facilities with availableappointments.