It's not surprising that 2017 will be remembered as the landmark year for the digital transformation of claims processing within the property and casualty insurance industry.

After all, it was the year we saw the use of drones for home roof inspections, auto appraisals via photos, customer video chats and bots used in claims processing. While many of these solutions have been topics of discussion in the industry for quite some time, insurers began to implement them in earnest through new technology during 2017.

Here's a deeper look at what we think are the top 10 reasons why 2017 should be considered the kick-off year for digital transformation in insurance claims:

1. Big data made a big splash

While Big Data has been widely used within insurance underwriting for several years, in 2017 we saw multiple and varied Big Data claims applications emerge. For example, LexisNexis Risk Solutions rolled out Claims DataFill to a number of insurers who were seeking actionable data at first notice of loss (FNOL) to expedite the first report and collect critical data needed for claims adjudication. This solution accelerates the claims handling process. You can find many other examples of innovative Big Data applications within the insurance sector in this 2017 Recap blog post, written by LexisNexis CEO Bill Madison.

2. The 'touchless claims' vision became real

As digital capabilities become more robust and customers increasingly demand digital in every aspect of their lives, fully-automated claims processing is evolving into a strategic imperative. In a recap of our Future of Claims Study, you'll see that the compelling vision of the “touchless” claim is turning into a reality. Insurers are accelerating their movement along the automated claims processing continuum in order to drive greater efficiency, increase profitability and most importantly, deliver a better customer experience.

3. Photo-based appraisal displaced in-person auto appraising

Speaking of touchless claims, insurer Allstate demonstrated its commitment to a more virtual claims handling approach through the closure of its drive-in appraisal centers in favor of photo-based appraising, made possible through its QuickFoto mobile app claims option. The company also made additional investments in other digital technologies that support photo-based appraising including their Virtual Assist solution for auto body shops. These investments are already reaping benefits for Allstate in terms of faster customer service and greater process efficiencies.

4. Drones became the new 'insurance inspector'

With four hurricanes striking the United States in 2017, drones were quickly put to work to allow insurers to accelerate roof and exterior inspections. A drone could also travel into flooded areas to give adjusters access even before the waters subsided. There were several media spots highlighting the use of drones in claims including NBC's Today show, where executives Glenn Shapiro of Allstate and Patrick Gee of Travelers were interviewed about the benefits of drones for expediting home claims. In 2017, we learned that using drones can shave several days off of claims processing time, free up human resources for more valuable and strategic tasks, and save insurers money.

5. Interactive features strengthened relationships with customers

The digital world offers a plethora of tools that can help insurers improve every aspect of the claims process, from FNOL through closure. A very important element in the entire process is the customer experience. Features such as video chatbots that can interact with customers on simple processes, voice analytics that sense customer mood and behavioral analytics that predict customer needs not only increase efficiency, but also create a stronger connection between insurers and their customers.

6. Chatbots became sociable

Consumers spend a lot of time on social media, so Progressive Insurance is meeting up with them online. In October 2017, the company announced the launch of its artificial intelligence chatbot on Facebook Messenger. Prospective and current customers can access the chatbot through the company's Flo's Facebook fan page, thereby extending Progressive's reach to upwards of 1.4 billion active Messenger users. Including these types of AI features in customer outreach capabilities is likely to become standard practice, as insurers continue to digitally transform their businesses to remain competitive and better serve their customers.

7. Claims apps became integral to the claims processing digital transformation

While undergoing a digital transformation is, in some aspects, unique to each insurer, a simple three-step strategy serves as a useful common template. Step three in this strategy is embracing the right tools to meet business needs. Insurers now have a broad suite of options and applications available to help them digitally transform their organizations for the best outcomes. Options include mobile capture, process intelligence, customer communications management, robotic process automation and case management.

8. Telematics entered its next phase

Telematics has proven itself as a foundation for usage-based insurance, providing valuable information to the insurer while helping customers become safer drivers and reduce their premiums. But the technology is far short of maturity in terms of the broader value it can offer both customers and insurers. This forward-thinking LexisNexis Insurance Insights blog post explains the telematics opportunities that lie ahead in the areas of proactive customer care, process improvements and improving data to drive better decision making. For example, telematics shows great promise for driving more efficient claims management as well as helping to prevent fraud through real-time alerts and an expedited claims cycle.

9. Accessing police records became easier and more accurate than ever

Police reports have long been an integral part of claims processing. However, accessing the reports and rekeying important information from them is time consuming, can result in inaccuracies and doesn't take into account the future value of the data. Automated police record retrieval has changed all that. Claims adjusters can now instantly order and retrieve police report data in real time, then automatically integrate that data and its data elements not only into an existing claim but also into the claims system for future retrieval. These capabilities create greater efficiencies and also enable insights that can drive future decision making. Automated police record retrieval promises to be a game-changer for the industry.

AI transformed the customer experience

Often associated with a negative event (like an auto accident or a personal property loss), contacting an insurance agent is typically not top on the list of things customers want to do. AI is changing all of that as 2017 marked the year AI came into its own within the insurance industry in a number of ways, including providing a much more compelling and satisfying customer experience.