Insurance technology lessons from 2017
How touchless claims processes, drones and other emerging technologies can help insurers lower loss expenses of wide-scale natural disasters.
Hurricanes Harvey, Irma and Maria; the California wildfires; and a succession of other natural catastrophes made 2017 an expensive year for disaster losses. Traditionally, the year following record-breaking catastrophes inevitably leads some insurers to reassess rate increases and possibly cease writing high-risk new policies.
Keep in mind that 2017 preceded several years of U.S. landfall-free hurricane seasons and other declining peril loss costs. Insurers should consider 2017’s extreme weather events as a learning opportunity for utilizing new technologies, data sets and workflows to cut costs and improve the claims process.
Related: Here’s how emerging technology is changing the claims process
New workflows emerge
Exploring touchless claims self-service processing by leveraging data, smartphone apps, drones, location intelligence and other technologies can help automate claims, leading to greater efficiency, reduced claims costs and a better customer experience.
Touchless claims self-service processing could be the next big disruption for minor home losses. The technology’s early successes in auto claims leverage data and analytics along with virtual claims handling tools to automate claims processes and reduce human touches.
Granted, a flooded, burned or leveled home is a more complex claim than an automobile fender-bender. Yet, there are opportunities to integrate more automation into property claims to lower loss adjustment expenses by using data to proactively deploy and schedule resources, capturing evidence of damage, expediting payments, and other efficiency gains.
In traditional claims processes, at least three people typically touch the average claim. These manual approaches rely heavily on in-field inspectors, driving up loss adjustment expense and generating lengthy cycle times. Virtual claims handling processes can reduce cycle times and the number of claims touches while also improving the customer experience.
Customers expect it as well. Self-service claims options are expected to increase over the next five years, driven initially by tech-savvy adopters, although others are becoming more comfortable with the process.
Expediting claims
Photo- and video-based mobile apps will be key to making claims automation a reality for home claims. With a couple of clicks on a smart phone, FNOL info and damage-related information gathered through an app are transmitted instantly to the insurance carrier’s claims processing system. This creates a loss report, validates the source and blends information about the loss with verified data about the insured to complete the loss report.
Virtual inspection data from the insured’s mobile app via photos or live video can provide the information needed by a remote adjuster to complete a damage assessment. If the claim meets approved criteria, the insured received notification electronically and the claims are paid—reducing the number of employee touches.
Drones are becoming instrumental tools for large-scale catastrophes, handling much of the insurance inspection role. Following each of the four major hurricanes striking the U.S. in 2017, insurers used drones to accelerate roof and exterior inspections.
Following the California wildfires, they surveyed and identified damaged communities without putting inspectors at risk. In the future, drones could travel into flooded areas to give adjusters access even before the waters subsided and provide visual access to inaccessible sites on the ground.
When combined with 3-D mapping technologies, drones can provide cost savings through their ability to survey damage to hundreds of structures in days rather than the months it typically takes a ground team.
There is no doubt that the financial impact of 2017’s natural disasters will hit insurers hard, but the innovative approaches implemented by some insurers can provide new opportunities to leverage data and analytics along with technological advances to mitigate future loss adjustment expenses and improve the customer experience.
Related: Claims handling is ground zero for customer retention
Bill Brower (william.brower@lexisnexisrisk.com) is vice president, product management, claims for LexisNexis Risk Solutions.
George Hosfield (george.hosfield@lexisnexisrisk.com) is senior director, home insurance, LexisNexis Risk Solutions.