Looking ahead: 2025 claims predictions for insurers
The role of adjusters will change significantly in the next few years as the digital transformation continues, according to LexisNexis.
In 2021, we made bold predictions about the claims trends we expected to see by 2025. In monitoring these trends throughout the year, the predictions we made are on track and appear to be aligned with what we’re seeing in the industry. For 2022, we’re ready to build on last year’s predictions and focus on some specific areas that will impact insurance professionals’ daily work.
A look back at 2021 predictions
To recap last year’s list, virtual claims handling continues to grow in popularity with consumers, as evidenced by the findings in the 2021 J.D Power Auto Claims Experience survey. The competition in the artificial intelligence (AI) estimating space suggests the accuracy of AI estimating will continue to improve as AI providers jockey for market share.
While the ratio of virtual estimates has come down from the COVID high, it continues to be a primary non-direct repair process (DRP) appraisal channel and, combined with AI enhancements, continues to track toward our prediction that 80% of non-injury claims will be handled virtually by 2025.
Similarly, many consumers in the post-COVID world think digital-first. Our 2021 Future of Claims study found that almost half of millennials and Gen X customers prefer an easy, self-service app for claims reports and interactions, while over one-third of baby boomers favor self-service. These preferences support our prediction that half of non-injury first notice of loss (FNOL) notifications will be reported via self-service or even a telematics solution by 2025.
Such customer preferences are prompting insurers to accelerate the use of real-time data to triage and automate claims tasks, supporting our prediction that the use of data will reduce total loss cycle time from weeks to just a couple of days or less. This focus on speed and automation touches digital payments, and we continue to forecast those totaling 80% of claim payments by 2025.
2025 predictions
We see the role of the adjuster changing in the coming years, and here are three areas where I predict this will happen:
- AI + virtual estimating will spark a redesign of traditional auto direct repair programs.
- Consumer preference for self-service will convert traditional call centers into quick claims resolutions centers.
- Reengineering the total loss process with real-time data will create an experience like buying and selling cars from your computer, but for total loss claims processing.
Redesign of the auto direct repair program
How will the digital transformation impact the future of work for claims professionals? One primary change involves the auto direct repair model.
I predict that the DRP of the future will leverage more AI self-service capabilities to simplify the workflow for body shops and the DRP claims staff. Rather than a consumer calling a call center, and the call center transferring the claim to a DRP shop, consumers can report claims digitally from an app. I could see a scenario in which the consumer scans a QR code, and then takes photos to complete the initial FNOL and select an approved DRP shop within the app.
Once the loss assignment is received by the DRP shop, it may already include a draft estimate created by the customer’s photos. This would allow the shop employee to simply inspect the vehicle and use an app to complete the appraisal by approving the AI estimate or making edits as needed. No more writing notes and slowing the estimate by hours or even days.
Additionally, I view communications to and from the DRP as becoming more digital with a redesigned DRP program. The claims payment process is also in need of an upgrade to digital to reduce the time-consuming administrative work for shop personnel.
In summary, I see an auto DRP redesign occurring such that the model is more automated by 2025. This will allow DRP claims professionals to support more DRP shops by focusing on exceptions through AI and estimating rules. Any redesign of the DRP process should reduce administrative work for both the DRP shop and claims professionals, which will further improve the customer experience.
FNOL call centers transform into quick claims resolution centers
As insurers provide more “Amazon-like” self-service FNOL options, it will be important for call center operations to transform to quick claims resolution centers. This means up-skilling staff to bring less complicated losses to closure early via self-service, chat, text and phone customer interactions.
As we’ve already seen, the ability to leverage real-time data is driving exciting change and powering simple claims apps that customers use for reporting claims. As a result, by 2025, I expect to see about half the staff in most insurance claims call centers still overseeing traditional FNOL phone reports and the other half being up-skilled to bring low-complex claims to same-day resolution. This will include AI damage assessments for both auto and home claims, as well as provision of chat and text support and service for individuals who report claims digitally.
The result is a more customer-friendly claims process that reduces touches and allows customers to interact via the channel they prefer. This transformation not only helps carriers adjust to meet the evolving service preferences of their customers but also allows the carrier to provide job advancement opportunities for high-performing call center employees. Some carriers have already put in place a limited form of quick claims resolution in the call center, so look for this trend to accelerate quickly over the next three years.
Reengineering the total loss process with real-time data
Today, the auto total loss claim settlement process is long and clunky for most carriers. This is primarily due to the amount of data required to settle a total loss, which relies on data from multiple sources that an adjuster must chase down.
Customer surveys also show that the total loss claim is typically rated as the lowest customer service score received by claims departments because the process is slow, requiring multiple phone calls and taking almost three weeks to complete.
The good news is that the availability of real-time data is allowing carriers to reengineer the total loss process. Total loss claims have traditionally required adjusters to hunt for title information, spend time on the phone seeking payoff information and then go to state and local websites to determine the fees and taxes owed when automobiles are sold, or, in this case, settled as a total loss. And that’s after determining the claim to be a total loss!
As we look to the very near future, through the combination of virtual inspections and real-time data on titling, vehicle equipment, fees and payoff, it is increasingly possible to settle a total loss claim within hours versus weeks as is common today. This is great news for total loss claims adjusters and for carriers looking to recruit high-performing adjusters into total loss claims units.
These changes, coupled with our prior claims’ automation picks, mean a more exciting and fulfilling career for claims professionals. Leveraging technology and data, the claims professional of the future will have greater control over the customer experience and eliminate the need for multiple handoffs in the claims process. The result? Claims employees will experience increased job satisfaction, and carrier customers will benefit from a greater and more streamlined claims customer experience.
Bill Brower (william.brower@lexisnexisrisk.com) is the vice president of claims for LexisNexis Risk Solutions.
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