Using texts & selfies for insurance claims
Insurers are using these simple but powerful innovations in a new way to lower claims times and costs.
Sometimes a simple, mature technology can reap big rewards. A case in point is property-casualty claims management, where insurers are using two established platforms in new ways: text messaging and selfies.
Ubiquitous on social media and familiar to consumers, these digital tools are just now being adopted in the claims arena. And they are paying off in reduced claims times as well as lower claims costs.
Since claims are a cost center and can eat into an insurer’s underwriting profit, claims managers are constantly looking for ways to process claims more efficiently. Insurers have harnessed technology to reduce paperwork, eliminate redundant data entry and expedite claims, but they have been slow to apply solutions that are outside their control and may pose regulatory concerns.
But as insurers become more confident of their data security protocols and feel they can meet regulatory requirements, text messaging and selfies are getting a second look.
Text messaging can save time.
Our company handles claims for Arrowhead and Brown & Brown national programs. In auto lines alone, we process 20,000 claims a year. So we know a thing or two about repeatable processes. Given that many claims, imagine how many times a claims adjuster picks up the phone in a year, and how many times no one answers!
Reaching someone by phone these days can be hit-or-miss, and the back and forth of leaving messages is a real-time killer. Emails are not always answered, either. But texting has an immediacy that consumers like.
Texting also conveys a sense of urgency. The rule of thumb is that the shorter the format, the higher the priority a message has in a consumer’s mind. So longer-format channels such as letters and emails may not get a high response, although they are often best for communicating formally.
Text messages are opened almost immediately and are great for providing quick updates and asking policyholders to check their online accounts, where they can download important information or sign off on a claim. We’ve found that policyholders like having the option of text messaging and are more likely to open texts than email.
However, texting has its challenges when it comes to regulatory compliance. Many state regulations affect claims communications, which must be carefully structured and well documented. A claims manager can’t just text a customer from his or her cell phone. So we’ve integrated a texting solution into our claims process. It looks like a text message to our customers, but it’s generated through our claims system, and everything is documented in the customer’s file.
There are several texting solutions for business available, but ensure they are insurance compliant. For example, California requires claims communications to be by “letter” or “voice,” so we’re still working through those restrictions.
Selfies reduce cycle times and payment costs
For personal and commercial auto claims, we’ve partnered with a vendor to give policyholders the option of taking photos and uploading them after an accident. It’s been surprisingly successful, resulting in payment cost savings, reduced cycle times (an average of 15 days to less than four) and an improved customer experience.
We used to send an adjuster out all the time for an auto claim. Now 60% of our customers are using the selfie service. It turns out they like being part of the process.
We knew there would be a reduction in cycle times, but we didn’t expect the average payment per vehicle would drop too. By empowering the customer, we’ve lowered body shop costs. We send the policyholder an estimate and recommend body shops in their area. If a consumer knows from the get-go how much something should cost and gets several estimates, they generally go with the least expensive one.
Texts and selfies allow customers to get more involved in the claims process, and they like that. Policyholders are providing a lot of the information needed to investigate claims and control costs. It’s a win-win for insurers and consumers.
Dhara Patel is president of American Claims Management, a wholly-owned subsidiary of Arrowhead General Insurance Agency. Arrowhead is one of the largest national insurance program managers for commercial and personal products in the U.S., with $1.3 billion written premium in 2019.
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