Self-Service Claims Management Will Change Everything

The Impact on Claims

So what does this mean for the claims industry? We need to empower the policyholder and our suppliers as the next frontier of competitive advantage. Consumers today want to control their own experience. Companies that recognize this can differentiate, customize, cut costs and rarely disappoint as the consumer will take responsibility for the tasks that we pay employees to do and the outcomes. Your suppliers today also want to control their destiny by being able to compete for your business on an open playing field through access to transparent performance data where they are ranked against their peers in real time. If you offer your suppliers the right incentives, they will actually want to know what is most important to you down to the employee level and organize themselves around how to deliver against your goals. This, however, requires a simple belief to be widely held before this transformation can take place: "Will I receive more referrals next week based on how well that I am performing this week?"

Performance-based assignments have become a reality in many other industries where consumers are making the choices based on the performance, availability, and pricing information available to them on the internet. Our industry is on the verge of being similarly transformed. One example that we are all familiar with is the travel industry. The norm used to be that we would call a travel agent who would recommend the airline, hotel, and rental car, provide a couple options and tell us why they recommended the ones that they did and then offered to book the appointment, sound familiar to the auto claims industry of today? Orbitz and Expedia changed all of this with performance based data, showing customer reviews, pricing, photos, profile data, distance and availability so that the consumer was in control of the assignment and the supplier was in control of their ability to compete on a level playing field for the consumer's business. 

The Impact on the Industry

So, what's next for our industry? Let me describe one end state vision for the industry where the policyholder would be able to take pictures of their damaged car with their smart phone, report their claim on a downloadable mobile app and upload their photos, locate the highest performing body shop in their area with the ability to filter for their preferences and to see when the shop can start the repairs, schedule the repairs and their rental car, receive status updates on their smart phone and finally receive one customer satisfaction survey with a customized electronic warranty that covered the insurer, body shop, parts and rental car company. The body shop, as one example of a supplier, would be chosen to receive the assignment based on an algorithm for peer comparison on a performance ranked insurer configured scorecard, date for when they could repair the vehicle based on an integration with the shop's management system, distance from the policyholder and ability to meet any specific filter criteria that the policyholder requested based on profile data that the supplier self-maintained online.

Performance Gateway is a supplier relationship management company that supports components of this vision with a cloud-based supplier performance management that is in use by 5 of the top 10 insurers in the industry. The cornerstone of the system is an insurer configurable scorecard where we consolidate both the supplier data that you have as well as industry data that you may not have access to in order to provide a comprehensive scorecard that can use to drive real time performance based assignments. We then provide a single platform for our 16,000 body shop customers to access their insurer scorecards on a weekly basis to identify how they are performing against what is most important for the insurance companies. This enables your supplier networks to have the right incentives to perform as well as your best staff, which is ultimately the goal of best-practice supplier relationship management.

Macro Trends

Claims frequency continuing to decline is not cyclical, as is it also being driven down by technology. A critical article to read as a claims professional is "Look, no hands, Self-driving cars are just around the corner" published in The Economist Technology Quarterly September 1, 2012. Google it. The bottom line is the auto claims industry needs a more adaptive model for where to reposition its employees as claims frequency continues to decline, pricing pressure from the internet becomes more focused on reducing loss adjusting expense (LAE), consumers expect and are willing to self-report their claim and body shops accelerate their capabilities to perform as an extension of the insurance company.