Digital claims intake is advancing just in time for a less predictable world
Insurers are deploying new technologies to get facts fast, streamline response and aim to recalculate risk on the fly.
Hurricanes inflicted a record amount of damage on the Atlantic coast in 2017, with flooding becoming an increasing danger with each new year in places like Houston. Wildfires wiped out unprecedented swathes of California in 2018, and the fires have returned this year along with power blackouts to avoid yet more fires.
Stepping away from weather, autonomous vehicles are inching onto city streets, where accidents and risks have largely been predictable for decades. The only predictable aspect of our changing climate and communities is volatility.
So how can catastrophic commercial insurance, or even automobile insurance, which rely on past data for predictive analytics, respond? We’re seeing insurers deploy new technologies to get facts fast, streamline response and aim to recalculate risk on the fly.
In fact, in a new NetClaim survey of insurance professionals, when asked, “Where do you believe digital transformation will be focused most in 2020?” a plurality of respondents (42%) said digital transformation will be focused most on claims intake and management, 33% chose underwriting and investing, while 25% chose marketing and distribution.
Digitalizing the claims intake process
While the line of thinking in the industry is that marketing and sales are where digital can help, the truth is that digitizing the claims intake process could actually transform the industry in a more impactful way. The contact centers we know today don’t have to stay the same.
With new technologies, processes that once took days now take minutes. By deploying advanced computing in insurance claims intake, contact centers are moving toward getting accurate data nearly instantly. As humans take the calls, robots can be developed to successfully combine this data with weather reports, social media posts and on-the-ground sensors.
Understanding the difference between wind damage, flooding, and the new dimensions of fire risk can make new risk profiles more digestible.
In minutes, a picture of what happened can be created — helping insurers determine what damage was caused by wind, flooding, or bad property management. And this improved process shows risk managers what’s coming next, allowing them to reassess the situation rapidly.
Auto insurance
This evolution is intuitive for catastrophic claims that may be driven by climate change. But what about mundane fender benders, or automobile collisions with pedestrians or cyclists on our city streets? The principles for handling uncertainty with storms hold true for cars and trucks.
What we’re seeing with the intake process could be a roadmap for other unprecedented insurance challenges like self-driving cars. They have great appeal because they offer the potential for fewer casualties and injuries as a result of fewer accidents.
But not zero accidents. And one question is how insurance will cover the ones that do happen.
Today, responsibility and liability hinge on drivers’ behavior at the time of the collision. Insurance is mandated, and carriers pay the damages. But what if there is no one behind the wheel? What if the error was the result of faulty computer code? And how will you determine what caused the error in the first place?
Making the situation more difficult is that actuarial statistics — the bedrock insurance is built on — aren’t yet available for autonomous vehicle coverage. It’s a catch-22: Without data, you can’t have insurance. But without insurance, you can’t get on the road to produce data. This likely is behind another result of the aforementioned survey.
When asked, “What types of insurance are likely to see digital transformation first and feel it most intensely?” most respondents (62%) answered auto. Industry insiders believe digital transformation will take place around claims intake and auto.
A new era
Survey respondents see a new era of machine learning and artificial intelligence setting up in claims intake to help insurance professionals reduce claim costs, automate and improve underwriting results and increase operational efficiencies. Software-as-a-Service (SaaS) platforms can boast datasets comprised of tens of millions of claims, which can be complemented with multiple economic, health, and litigation datasets.
This robust aggregation of data provides out-of-the-box claims and underwriting precision, and it can be continuously refined with client-specific data over time.
The predictable may be less scary, and more of an opportunity.
Haywood Marsh is general manager of NetClaim, an insurance claims reporting and distribution management business.
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