Verified inspections can help insurers with hurricane season in the COVID era
Some forecasters are predicting an 'active' season this year with approximately 20 named storms in the Atlantic alone.
The effects of the coronavirus shock have already had dramatic economic consequences, and all indications point to its continuation for the foreseeable future. The virus has stunted the fast-paced movement and interaction of people throughout the world, countries, and even locally. Cities have been quarantined, sport stadiums are emptied, and much of human interaction has ceased globally. It is hard to capture how much the slowdown in the movement of people will impact the global economy, but U.S. gross domestic product has already contracted by 4.8%, and most experts have predicted one of the country’s worst economic slowdowns.
Many businesses and industries — like service — are a shell of themselves and have stopped activity. Others — like insurance — remain essential security for the general population and must carry on regardless of the challenges today. Maintaining business operations as normal is difficult for insurers today, and despite innovation in the industry, it still struggles to address balancing digitization with due diligence and fraud prevention.
While direct writers account for 66.5% of the homeowners market, 31.6% of business is still written through agents and brokers, many of whom operate from brick-and-mortar storefronts. That’s a singular hurdle during a pandemic when consumers are under strict safer-at-home orders. Without the technology or digital infrastructure to support online operations, agencies may take months to recover from COVID-19’s financial impact. Plus, as the economic downturn translates to more unemployment, insurers across the board may expect an overall reduction in premium revenue.
Although parts of the economy have (or soon will be) re-opened, it is clear that social distancing and safety precautions are here to stay for the foreseeable future. This new normal will become increasingly complicated for insurers and the insured during the current hurricane season. While we can never accurately predict just how devastating the 2020 season will be, some forecasters are predicting an “active” season this year with approximately 20 named storms in the Atlantic. It is likely wise to heed the warning considering four of the five most damaging hurricanes in history took place in the past eight years; three (Maria, Irma, and Harvey) in 2017 alone. Considering the obstacles we are already facing, we must consider how insurers will respond to a natural disaster during the COVID crisis.
The technological benefits
Technology, specifically verified remote inspections — also known as Controlled Capture imagery — is one potential tool to maintain safe, efficient service and prevent opportunistic fraud that accompanies natural disasters for insurers. At the same time, it can also help facilitate safe and rapid underwriting and online binding to get homeowners insured as quickly as possible before hurricane season begins. Verified inspections hold a variety of strategic benefits over in-person inspections that will be necessary at this time.
From a client experience, Controlled Capture technology allows the insurer to seamlessly request real-time verified photography from the insured through a mobile software application without any sign-up or account creation. For example, when the insured submits a claim or seeks a policy, the insurer will instantly send a text message with a “smartlink” enabling the insured to self-document/record their property or claim on their own time and speed. Customers no longer have to miss work or cut into leisure time to meet with an adjuster or underwriter. This is especially important during the COVID era where social distancing is paramount. In sum, the insured is empowered to move at their own pace.
In terms of trust, the technology performs 22 fraud-detection and fraud-prevention tests on every photo captured in a matter of seconds. This enables carriers to have full trust and faith with the images they receive, while simultaneously rooting out and preventing fraud. In many ways, this type of technology can be more effective than in-person inspections that lack reliability and can be subjective. Finally, the cost of such technology is a fraction of that of in-person inspections and third party monitoring services. This allows carriers to cut costs, deploy human resources elsewhere that may need in-depth review, and re-allocate savings into other resource-strapped areas.
An example of verified inspections in the field
Kin Insurance and Truepic have partnered to deploy this type of technology on a variety of appraisal and underwriting cases. In doing so, Kin Insurance is able to protect its clients from any unnecessary exposure during the COVID crisis — a top priority. In a short time and ahead of hurricane season, Kin and Truepic have successfully captured over 3,000 verified images and videos throughout most parts of Florida in virtual verified inspections.
It’s common, especially in catastrophe-prone states like Florida, for home insurance companies to require a home inspection before (or shortly after) binding a policy. These inspections ensure the home meets underwriting requirements and formalize the home’s condition before a policy’s effective date. This helps deter fraudulent claims for damage that existed before the coverage began.
By equipping homeowners with Truepic’s virtual inspection technology, Kin is able to help customers get their inspections done professionally and easily. It also helps customers adhere to social distancing orders because there’s no need to bring an inspector into their homes.
All of this translates into a faster, cheaper, and, most importantly, safer way to deliver insurance services in the COVID era.
Businesses and industries are facing new obstacles and challenges as the world continues to grapple with the impact of COVID-19. The insurance industry is no different, and maintaining safety, efficiency, and diligence in this brave new era is critical. We also have to consider how these obstacles will evolve and likely become more challenging during hurricane season. Closing the trust gap in digital images and videos through verified technology is one tool that helps meet the needs of customers in this changing world.
Craig Stack (craig@truepic.com) is the president and co-founder of Truepic. Kyle Fox (kyle.fox@kin.com) is the director of underwriting for Kin Insurance. The views expressed here are the authors’ own.
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