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Spring 2018  Volume 14, Number 1        
 

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What’s the Future of Auto and Home Claims Handling?

Like everywhere else the digital world is bringing changes to the insurance industry.

Shoppers and banking customers appreciate the speed and convenience of digital transactions. Now the insurance industry is moving toward delivering the same type of digital experience to policyholders who submit an auto or homeowners’ insurance claim.

In a study by LexisNexis Risk Solutions, 24 insurance executives described their company’s current and future plans for implementing “touchless” claims processing.

Currently claims processes can be divided into four categories:

Traditional: the adjuster goes out to personally inspect the car or home and prepares the estimate.

Fast Track: Claims are expedited with minimal insurance company involvement, as when, for example, a driver is instructed to take the damaged car directly to a repair center.

Virtual Claims Handling: The customer or a vendor photographs the damage and the adjuster assesses the damage remotely.

Touchless Claims Handling: The claim is reported electronically along with backup materials such as invoices and photos; the material is reviewed by humans or algorithms and paid electronically.

To assess where the insurance industry is headed in terms of implementing digital strategies, LexisNexis segmented insurance companies into three groups:

Traditional: Relies heavily on traditional field inspectors for even non-complex claims. May use fast track but not using or considering virtual claims handling

Semi-Forward Leaning: Uses traditional and fast track, along with using or considering virtual claims handling

Forward-Leaning: Uses fast track and virtual claims handling, and considering touchless claims handling.

Here’s how the companies surveyed ranked in terms of which claims-handling process they currently use:

  • 100% Traditional
  • 83% Fast Track
  • 38% Virtual

One of the most interesting things the survey reveals is that companies with a more advanced technological approach have shorter average claims cycle times. This is mainly because the claim needs to be handled or “touched” fewer times. And this can deliver big benefits to policyholders.

  • Traditional – 10-15 days (3-4 average touches)
  • Fast Track – 4-6 days (2 average touches)
  • Virtual – 2-3 days (1-2 average touches)

The Bottom Line: Better Results, Happier Customers

Companies using fast track processing report achieving 73% better results from their claims process. This is because of reduced loss adjustment expenses, better efficiency because personnel can be reallocated to more complex claims and, most importantly, better customer experiences. For companies using virtual claims handling, even more (78%) report better results.

When fast track approach companies were asked if they planned to also adopt touchless claims handling, 78% said no and only 27% said yes. However, when companies already using virtual handling were asked about moving to touchless claims handling, the “yes” response was 67%; the no’s were just 33%.

Clearly the need to satisfy tech-savvy customers, especially millennials, will drive more companies to adopt digital processes in the next five years. But the savings from reduced loss adjustment expenses, better customer retention and competition from forward-leaning competitors will also mean you’ll be seeing more digital claims processing in the future, no matter which insurance company you buy your insurance from.

Please give us a call. We’ll give you an update on how the companies you’re insured with are handling claims these days.

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In this issue:

This Just In...

What’s the Future of Auto and Home Claims Handling?

Eight Homeowners Endorsements You May Need

How to Buy Motor Home Insurance

Get a CLUE, Don’t Buy a Lemon!

 

 


The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2015 The Insurance 411. Tel. 877-762-7877. www.theinsurance411.com