The majority of insurance companies employ a “fast track” process to assess and manage Property and Casualty claims.
The fast track claims management process requires minimal involvement by the insurance company. Typically, in the case of a vehicle being in an accident, the adjustment tasks would be carried out by a repair centre. Next, an insurance company adjuster would assess the damage and then make a decision on whether the vehicle is repairable or should be written off as a total loss.
Yes, fast tracking is a quicker claims handling process than the traditional, manual, paper-based method used in the past by insurance companies, but it’s not much better.
Why the fast-track claims management process isn’t good enough
When a claim is being processed there are two main parties involved: the claimant and the insurance company. Each party has different needs.
So what matters to the claimant?
Well, first, they don’t want to be referred to as claimants. They are policyholders. As a result, they want to be treated as valuable customers. That means when they need to leverage that policy in their time of need, they want an exceptional customer experience; an experience where:
- they are proactively informed and always engaged with where they are on their claim journey
- they want to be able to convey critical claim information very easily and quickly
And, most importantly, they don’t care about the claims management process; they only care about the outcome of their claim.
So what matters to the insurance company when it comes to the claims handling process?
In the majority of cases it’s things such as:
- making sure there is reduced workload on employees
- making sure that the claims management process is as streamlined as possible
- making sure the overall claim is reasonable in cost
- the ability to verify and validate information
- ability to make decisions regarding the claim very quickly and autonomously
- not taking on bad customers and paying out for claims that are unjust or unreasonable
- preventing soft and hard claims fraud
The fast-track claims management process helps address and improve some of the customer experience needs of the policyholder and some of the cost, efficiency and validation requirements of insurance company, but unfortunately not the majority of them.
In order to address what’s lacking, more and more insurance companies are transitioning to a touchless claims management process.
Why the touchless claims management process addresses all the customer needs
The touchless claims management process is where claims are automatically or electronically managed end to end. It gives customers the ability to use their smart phones to capture invoices, take pictures of damage, fill in forms, and minimize the information that needs to be filled into the forms. Then, using artificial intelligence (AI) technology, insurers can automatically decide whether or not a claim should continue through the process and go into conclusion.
The touchless claims management process wouldn’t be possible without the emergence of telematics, i.e. the black boxes that are installed in vehicles. These devices, which are continuously recording critical driving data, can be used to inform the insurer of exactly what is happening at any given point in time. This is especially relevant and helpful when a vehicle is involved in an impact (i.e. accident).
Thanks to telematics technology, insurance companies are then able to leverage the efficiency of AI.
First, the telematics black box provides the data. The AI system analyses the data and then makes a claims decision quickly and autonomously reducing the workload on insurance company employees.
By connecting telematics, to AI, to a customer experience management solution, insurance companies are able to create a touchless claims management process and the makings of something extremely powerful.
If claims decisions can be made as autonomously as possible, “insurance companies can reduce their overall cost and loss adjusted expense by about 50%,” according to Dheeren Gorecha, UK and Ireland Presales Leader for Quadient.
Examples of the touchless claims process in action
To appreciate the differences a touchless claims management process can make for both the policyholder and the insurer, here are couple of use cases.
Use Case One: Trustworthy John
A policyholder named John Smith is driving down the street when he gets blindsided by a truck carrying a dumpster.
John’s insurance company is automatically notified of the accident by the telematics device (i.e. black box) in John’s car. This triggers the sending of a proactive claim request to John so he can confirm that he has been involved in an accident. Once he does, the AI system decides what the most appropriate way to handle his claim is, and then sends John a simple, three-question claim form to fill in.
After the claim form has been completed and sent back, the AI system conducts some analysis, comparing the information John has provided against the information that has been gathered by the telematics device.
The facts align so the AI system generates a finalized claim report autonomously authorizing the vehicles repair, a car rental and the dispatch of a tow truck.
Use Case Two: Soft-Fraud Randy
A policy holder named Randy Longmire is driving down the street when he too has a run in with a truck carrying a dumpster.
The telematics device in Randy’s car notifies the insurance agency of the accident and the insurance company immediately sends a proactive claim request to Randy so he can confirm that an accident has taken place. Randy does and he receives the three-question claim form from the insurer.
This is where Randy’s scenario starts to differ from John Smith’s.
Randy fills out the form but claims he was driving only 5 miles per hour and for just 30 minutes. He then sends back the form.
The AI system compares the information that Randy has supplied against the data that’s been collected from the telematics device.
The two sources don’t jive.
According to the telematics device, Randy was driving 32 miles per hour not 5 miles per hour and had been driving for 60 minutes not 30 minutes.
The misalignment of the numbers triggers the system to re-route the claim to a human adjustor who takes a deeper dive to make sure the report was properly filled in and that the data from the telematics device was accurate.
Once the adjustor completes his investigation, the adjustor notifies a claims handler in the back office that Randy is a high risk claim and could be trying to commit soft fraud. The claims handler investigates further in collaboration with the adjustor. When the investigation is complete, the claims handler determines that Randy was attempting to commit soft fraud and his claim is denied.
Everybody wins with a touchless claims management process
With a touchless claims management process, insurance companies can improve their customer experience because they will be able to respond quicker to customer needs and requests, keep policyholders proactively informed and process their claims up to 50% faster.
For insurance companies, a touchless claims management process means enhanced efficiencies, streamlined claims validation, a reduction in fraudulent claims being processed, reduced costs and happy customers who are more likely to renew each year.
To learn more about the merits of implementing a touchless claims management process, view the on-demand webinar, “The Art of the Possible: Future-proofing Claims”.