Touchless claims’ impact on the future of collision repair

The more insurance and collision repair companies adapt to new technology, the better prepared they will be for future claims.

Technology can produce more timely and economical claims, and it also gives artificial intelligence the ability to peer into historical data of claims with similar vehicle damage. (Photo: Shutterstock)

Automation has quickly become a disruptive force in the automotive property and casualty (P&C) insurance industry. Introducing artificial intelligence (AI) as a customer service driver, educating professionals about all the advanced automotive technologies unveiled by automakers, and sharing data across a plentiful number of platforms is just the tip of the iceberg.

But the benefits far outweigh the growing pains of shifting to new processes and workflows as an insurance professional. And more than ever, adjusters and appraisers must align their procedures with the collision repair facilities performing work on vehicles as it relates to complete, safe, and quality repairs for the ultimate benefit of the consumer.

This history of claims

The claim-processing model has drastically changed the way policyholders handle auto collisions. In the past, the customer needed to work with several individuals from both the insurance and collision repair side to have their vehicle repaired. From phone calls back and forth regarding the damage appraisal to identifying (and agreeing upon) the cost to repair, both the facility and carrier typically spent an extensive amount of time resolving the claim.

During the estimating process, if both the estimator and technician were not up to speed on the latest in proper repair procedures, as defined by the automaker, when identifying the repair plan, that could decrease the facility’s key performance indicators (e.g., cycle time, length of rental for the customer and increased supplement frequency).

The average time traditionally spent on managing a claim and finalizing the claims payment is about a month, but it could last several months given the specific scenario and damage. Today, utilizing new technology available for businesses and consumers, the payment of a claim may be issued within 24 hours of being filed.

Today’s technology: Touchless claims

Eliminating the drawbacks of the traditional claims process for both the insurance carrier and collision repair facility, a new way to file a report has been identified: “touchless claims.”

Carriers of all sizes have been working with software companies on app development to empower consumers — estimators and claims adjusters alike — to file their own claims on their mobile devices by taking photographs of their damaged vehicle. These images are uploaded through the carrier-specific application, and the claim is then initiated. Some carriers also allow consumers to file a mobile claim, whether it’s a total loss or cosmetic repair.

Benefits of using touchless claims

Not only does this technology produce more timely and economical claims, but it also gives artificial intelligence the ability to peer into historical data of claims with similar vehicle damage, which in turn may increase damage determination and estimation accuracy.

According to CCC Information Services (CCC), the company has been working with deep learning (DL) and machine learning (ML) technologies since 2011, and states that the DL algorithms in place show that today “it is 90% accurate in predicting when an insurer will declare a car a total loss through analysis of a photo of the damaged vehicle.” And CCC hopes to continue improving its accuracy.

In addition, CCC shared that a few of the applications provide features that aim to support the collision repairer. Pattern recognition technology accommodates the technician in purchasing parts for the vehicle, such as if they order a license plate frame and a front bumper, the software suggests a hood front seal. This increases the likelihood that the technician will order all parts needed at the same time, which then will work to help the estimator perform their job quicker while reducing shop delays from missed parts in the estimating process.

Nonetheless, there are several important considerations. First, advanced technology and material vehicle procedures may dictate an increase in the cost to repair. According to Mitchell International, there is currently at least one ADAS feature in 92.7% of new vehicles available in the United States. This requires the need for touchless claims to be integrated but also requires collaboration between collision repair facilities and insurers. This not only impacts collision repair facilities and their bottom line but also may increase policyholder premiums for carriers. In addition, with the human element of customer service slowly diminishing, will AI be able to provide the empathy or “human touch” some consumers desire/? An offset to increased premiums may be a decrease in expenses on the carrier side with the use of this new technology. But only time will tell.

Future of the industry

While automated customer communication, as Mitchell International calls it, sweeps throughout the insurance industry and in repair facilities, the future will rely on an “inter-industry” of sorts that works together throughout this new era. It will also require a mix of human interaction (HI) as well. Mitchell’s article shares a similar sentiment on why it’s important to still find a middle ground with AI and HI.

“According to Insurance Nexus, ‘Customers want choice in how and when they engage, as well as the information they receive, but, during a claim, when a distressing loss may have occurred, the importance of human empathy cannot be understated,’” says the article.

More efficient workflow

Carriers are also recognizing significant, more efficient workflow through AI functionality and self-service options, considering that nearly 50% of all claims reported are categorized as cosmetic, which then can be processed through an automated solution according to Solera’s research and work. Overall, this provides potential financial savings in a range of fields, which enables the workforce to be more focused on complex claims processing.

Solera’s self-service claims technology automatically generates a line-item estimate with repair, replace, and related operations, including labor overlap considerations, based on damage identified by artificial intelligence and rules specific to each carrier. With large carriers managing thousands of vehicle claims every year, automation of even half of these claims could be a significant advantage.

Further down the road, we may see repair facility customer service representatives adopting estimator/adjuster roles as a means to integrate communication — and expertise — for the consumer’s benefit. What better way for all parties involved to benefit from a single person with all the information and skills required for proper repairs?

Per a webinar facilitated by CIECA, an integrated collision customer service representative could handle:

This can also provide beneficial outcomes for both the carrier and repair facility, including:

While challenges still remain (e.g., talent, resources available in-facility and with the carrier), the more insurance and collision repair professionals adapt to this new wave of technology and conventional information sharing, the better prepared we will be for claims management in the future.

As technology and claim-handling processes change, I-CAR is adapting as well. Research into these new systems and processes will dictate the next phase of the insurance version of the Professional Development Program™ (PDP), which is well underway. Significant enhancements to the PDP for collision repairers have been finalized and will launch shortly.

Keith Going (keith.going@i-car.com) is principal of insurance business development at I-CAR (Inter-Industry Conference on Auto Collision Repair). 

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