Carriers today deliver claims service through 24-hour call centers, Internet portals, and smart-phone applets. Many companies also have mobile adjusters cruising the busy roads of urban areas in order to rapidly respond to an accident for their insured or other carrier. The goal is to give the insured the ability to submit the claims as quickly as possible to begin the process of settling the loss and making the claimants whole again. This approach still relies on the presence of mind of the insured to report the loss. The question to ask ourselves is: Can we do better?

We all know several data elements go into claim processing, but the simplest, most elemental claim data comes down to the date of loss/occurrence. Beyond that, carriers need more information to begin the loss process. The key elements needed to process a claim are straightforward: date, time, location, injured name, policy information, coverage information, type of claim, severity, injuries, etc. These are the elements that carriers capture through call centers, agents, portals, and apps. All are factors to moving the claim into the investigation funnel and making the initial assignment to the appropriate staff. All this data can be captured during a loss report through the methods previously mentioned, but how can carriers further expedite the process?

What's New

The latest innovation in rating is the pay-as-you-go programs offered by some automobile writers. The programs vary slightly by carrier, but the process is to track the usage through driving habits and report back to the carrier. A device is connected to the car and periodically beacons the driving information. Why can't this capability be expanded to include motion detection and impact sensing capabilities for accidents? Think about what that means to a carrier if a device can be in a car that is associated to an insurance policy. Many of the key elements of a claim can be matched to signal from a vehicle for a loss report.

In the future for our accident scene the carrier could be signaled with the key loss information at the instant of impact: date, time, location, insured name, policy information, coverage, and other information that can be used to initiate the claim. Within seconds the loss could be recorded, policy and coverage verified, and an adjuster assigned. A towing service could be dispatched to the scene, rental notified, injury handlers notified if the accident was above a certain speed, and follow up/acknowledgement initiated. The carrier could initiate the claim contact rather than waiting for contact from the insured. The claim reporting device could be developed to save the last 60 seconds of information for reporting an accident description (speed, GPS location, direction traveled, etc.). What a great way to use technology and the information you already have to be proactive in the initiation of a claim.

How does this benefit you as a carrier? Your customer service will improve because you are coming to the aid of your customer. In our scenario, the tow truck could arrive at the accident scene while the first responders are on site. You could also have your claims call center initiate contact with the insured on a mobile phone to be sure everything is OK. You can extend the contact to include calling a home or work number to let the other members of the household know that one of the other family members was in an accident.

Loss expenses will decrease because you are working the claim from the instant the loss occurs. No longer will a vehicle sit in a towing yard—you can have it moved directly to one of your preferred repair shops or taken to a salvage facility if the damage is a total loss. Your adjusters are acting to engage with the insured to make sure he or she is taken care of and medical treatment is underway.

Your fraud exposure will decrease. You have the opportunity to validate the insured's statement against the information received from the electronic loss report. Insureds may not always have a clear memory of the events right before the accident. Some insureds also do not want to admit to culpability. What if the driver in our scenario was speeding and does not admit to exceeding the posted speed limit in bad weather? You may handle the investigation differently, but you will have the facts of the loss as they actually occurred. Many vehicles have a black box under the hood to collect data, but the ability to report the loss is not included.

With a GPS device attached to the car you can also track stolen vehicles better. Currently that is a service the insured must purchase, but as the carrier you have the most vested interest in knowing where the car is located, if stolen. Minutes matter in car theft, and you can contact local police with a detailed description of the vehicle as soon as it is reported stolen.

Regulatory Issues

Any new technology concept has new regulatory issues to work out. There will of course be privacy concerns, but those are no different from the concerns attached to pay-as-you-go rating. Proper protections can be put in place not to disclose information, and the claim reporting device can only transmit when a loss is reported. Rating discounts are a way to encourage people to try out the electronic loss reporting function. Also, many states are still mired in the past and need to update laws to embrace the possibility of improving insurance and loss settlement for their residents. Education about the service is expected.

Our driver above only had to wait a few minutes for the police and an ambulance to arrive at the scene. As she was being treated for her minor injuries, her carrier contacted her to let her know that her claim was reported, the tow truck arrived to take her car in for repairs, and her husband arrived to pick her up because the insurance company called her house. Off in the bushes is a deer watching all the flashing lights. One day soon we hope this is a realistic scenario for our industry.