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Winter 2020  Volume 16, Number 4        
 

fender bender

Insurers Handling More Auto Claims with AI

High tech is changing the way claims are processed.

More insurance companies are using artificial intelligence (AI) to process automobile claims.

The goal is to improve customer satisfaction and make the process more efficient. The process starts with a mobile app. As Aditya Sharma, head of digital marketing for Bajaj Allianz General, says, "A mobile app enables the customer to notify the insurance company from the accident site without having to contact the customer service team. It also helps the insurer to process the claim faster, thereby reducing the overall turnaround time for processing the claim." But reporting claims with apps is just one part of the process, the easy part.

Human adjusters, unfortunately, are notoriously slow at getting claims through the system. For one thing, human adjustors must physically continue to review and approve claims throughout the process, even while the body shop is starting to make repairs.

Addressing COVID Concerns and Reducing Cycle Time

The focus with claims AI is to reduce "cycle time," the time it takes to process a claim from when it's opened to when it's closed. And with COVID-19, the desire to use AI is even more urgent since AI reduces the need for person-to-person contact.

The critical step in creating useful AI claims apps involves building a sizeable database of photos of damaged cars that algorithms can use in identifying and estimating claims. One AI claims start-up, Tractable, has a database of approximately 10 million photos of damaged cars and their repair costs.

The first step for a typical auto claims app is to evaluate the claim to determine whether it's legitimate or not. Then determine the complexity of the claim. If it's not too complex, the app itself will authorize payment. If it is too complex, the claim is referred to a human adjuster.

Tractable and Elafris

Some apps, like Tractable, can go ahead and pay the claim. It works like this: Your agent uploads images of your claim, such as damage to your car, along with an estimate of what the payout might be. Tractable software then compares the images uploaded with images of similar vehicle damage stored in its database. It also checks whether the estimated payout is in the same range as payouts for other claims with similar damage. Tractable responds with its evaluation letting the agent know if it agrees with the estimate.

Another app, Elafris, handles claims with Chat software, letting customers open claims in a chatbox. The customer answers questions about the claim in the chat window and the claim is submitted to the insurance company. Customers can check back whenever they want to see the status of their claim.

In the Future the Majority of Auto Claims will be Handled by Apps

A recent study of claims apps by LexisNexus Risk solutions, which they referred to as "fast track processing," reported that companies using fast track processing are achieving 73% better results from their claims process. They attribute this to reduced loss adjustment expenses, better efficiency through reallocating personnel to more complex claims and, most importantly, better customer experiences.

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 looking 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.

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In this issue:

This Just In...

Insurers Handling More Auto Claims with AI

Do You REALLY Know What's in Your Homeowners Policy?

Are You Insuring Your Home to Value?

Why Do People in Horror Movies Never Have Insurance?

 

 


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