Virtual claims are becoming the norm for auto insurance
Consumers show satisfaction with automation, but the personal touch remains vital to keeping policyholders happy.
Prior to COVID-19, just 15% of auto insurance claims were handled virtually. Following shutdown measures, nearly every auto claim was handled virtually, according to LexisNexis Risk Solutions’ Future of Claims report.
Around 60% of claims are still being handled virtually as consumers continue to get more comfortable with automated claims. When it comes to claims automation, 62% of policyholders said it was more convenient to file a claim “any time/anywhere,” while 55% said the route to settlement is shorter with new digital processes.
As can be expected, younger generations are showing more willingness to adopt touchless claims, with 68% of millennials and 53% of Gen Xers reporting the pandemic led them to file a claim online.
“While the past year has proven to be a great awakening for claims automation, we’re now at a crossroad, and what will set insurers apart is a complete claims handling digital transformation and move from traditional to touchless,” Bill Brower, vice president of claims at LexisNexis Risk Solutions, said in a release. “As we look ahead to 2025, the industry should be optimistic that we will soon see a day when the vast majority of claims will be processed virtually. But it will take hard work to get there.”
Although automation is being adopted at an accelerated clip, the need for the personal touch persists for certain types of claims, LexisNexis’ research found. For example, when it comes to complex claims having access to help from insurance professionals remains vital for avoiding frustrated policyholders.
Room for improvement
Overall virtual claims satisfaction is high (92%), and adoption is accelerating, but LexisNexis noted there is room for improvement as the percentage of policyholders that are “very satisfied” with their recent virtual claims process has dropped 11% since 2019. The decline is likely a result of consumers’ having elevated expectations regarding ease-of-use for digital processes. This is particularly true when it comes to complex claims, LexisNexis reported.
By focusing on timeliness, implementing features such as data prefill for forms and reducing the number of touchpoints carriers can further improve the self-service claims experience.
The other big challenge in this space swirls around privacy concerns, with 61% of consumers expressing apprehension when it comes to the security of personal information when submitting a claim virtually.
To ease worry over privacy, LexisNexis suggested the industry embrace two-factor authentication, a security feature currently being used by only 1-in-10 insurers.
“Overall, consumers are willing to move to more self-service claims options as long as the experience continues to evolve to meet their expectations and deliver the benefits of convenience and security,” Brower said. “Whether claims automation will become the new normal is still up for debate, but this past year has proven to be a powerful proof point for the viability of automated claims processing, both in terms of insurer capabilities and consumer receptivity. Now is the time for insurers to continue to develop and refine their claims handling digital transformation before it’s too late.”
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