COVID-19 supercharged insurance industry digital adoption

The spread of COVID-19 has dramatically changed our world, upending everything from our daily routines to where and how we can work. And while these changes have created a lot of uncertainty and speculation about the future, we also are already seeing significant shifts in how we do business, and in some cases, an acceleration of change that has long been on the horizon. Mobile and digital adoption have been pushed to the forefront, even more so than they already were, creating a new normal for how business gets done across the economy.

The use of digital as a response to COVID-19 has resulted in a series of implications playing out across the claims industry that will forge a new reality. As businesses look to the future, insurers that recognize and quickly adapt to these shifts are best positioned to emerge stronger.

Here are three dynamics we’re seeing unfold:

No. 1: Digital makes interacting possible; AI is making our interactions meaningful.

At least 316 million people in the U.S. were recently directed to stay home. And while social distancing and shelter-in-place guidelines are critical in flattening the COVID-19 curve and slowing the spread of this global pandemic, they have also created an increased need for tools that eliminate historically in-person tasks such as underwriting inspections, appraisals, total loss assessments, repair estimates, and more.

Of course, mobile and digital channels are key factors in enabling these tasks to be completed virtually, but artificial intelligence (AI) is really what is advancing these interactions. It is the engine that, when used effectively, can help support dynamic experiences and provide hyper-customized insights and actions across insurance.

For example, photo estimating has empowered consumers to initiate a first notice of loss remotely using their smartphone and a few pictures of the damage. For carriers with the power of AI embedded into their workflows, the claims process can be seamlessly advanced to include an immediate repair vs. total loss prediction. If predicted to be repairable, a virtual inspection and an initial AI-powered estimate are generated, which is checked by an experienced human.

While AI on its own is not a magic bullet in solving all problems, the use of micro-AI implementations, at key strategic points in the process, exemplifies how taking an outside-in approach — one that addresses the full customer experience — can pinpoint the right moments to integrate AI. This is when you can really capture its full potential and achieve tangible business benefits.

No. 2: The insurance experience is becoming more dynamic.

Traditionally, the use of virtual technology to reach insurance customers has been largely static and primarily a way for insurers to orchestrate one-way, task-oriented conversations. To date, this technology has facilitated very linear exchanges; in a sense, the carrier defined the process (increasingly modernized with IoT, mobile, and AI) and the consumer followed it.

But, with an estimated 62% of employed Americans working from home due to COVID-19, every industry is working to expand and extend its use of virtual technologies to run their internal operations and interact with consumers.

Insurers with large call centers, for example, are facing new challenges, including how to seamlessly up-level conversations across teams that are no longer in the same office. Similarly, supervisors need to be able to quickly and efficiently scale consumer requests based on worker bandwidth, consumer needs and more.

Dynamic chat platforms in development are being pulled into market to support immediate needs for insurers to help their virtual workforces manage consumer requests at market speed. These consumer experiences are not always so linear in this environment. For example, one policyholder may have just gotten in an accident and needs guidance on specific photos that for a repair, while another might reach out to find out about repair shops that are open and get help scheduling an appointment. These requests are happening at high-volumes and need near real-time responses, making it even more critical for insurers to balance the workload of virtual staff to facilitate increasingly decentralized interactions.

No. 3: This period will mark a tipping point for payments.

As a result of COVID-19, the restaurant industry offers a great example of an industry that has quickly adapted to remain in business. One area that has seen exponential growth is curbside pickup and no-touch delivery. Consumers can now, at-scale, order ahead, pay, tip and alert the restaurant when they’re outside and ready to pick up their order, all online and without exchanging a physical credit card for a transaction. This is a drastic shift from the traditional dine-in credit card payment process that requires a substantial change in payment workflow. This new normal may never revert fully when restaurants are able to reopen their dining rooms again. People are going to expect something faster and less quaint.

On top of that, food delivery services, which were already growing and included payments in advance, launched contactless delivery and have been surging. Instacart, Walmart Grocery and Shipt saw their daily app downloads surge by 218%, 160% and 124%, respectively, compared to February levels, according to Apptopia.

In looking at these examples, our industry should take note when it comes to payments as COVID-19 just might be a tipping point. Those still processing checks will continue to feel the inefficiencies and likely fall short when it comes to delivering on customer experience. When companies from Amazon to the local pizza place can support digital payments, consumers will expect it everywhere.

What’s next?

While we may still be in the early days of the pandemic, it’s clear that for many businesses, major shifts are already taking place. It follows that many carriers are resetting priorities to accelerate greater adoption of digital tools to support claims processing in the near- and longer-term. These insurance professionals are engaged in active discussions about how new virtual tools can support more dynamic collaboration both internally and externally, introducing new levels of automation and policyholder personalization.

While extremely challenging on many levels, COVID-19 has fueled the insurance-industry evolution that was already underway. As we emerge, a new baseline for business as usual will likely be established, giving an advantage to those that have embraced the technologies once deemed ripe for tomorrow, today.

Jason Verlen (jverlen@cccis.com) is senior vice president of product management, strategy at CCC Information Services Inc. These opinions are the author’s own.

Related:

• The push to digitize insurance amid COVID-19
• How insurers and brokers are working together during the pandemic
• How state insurance departments are responding to COVID-19