4 pandemic employment, tech trends challenging insurers

Insurers sell a promise, and they deliver on that promise when claims arise. That’s where the value of insurance rises to meet the challenges insurers may face in this pandemic, technology-driven era.

Four key factors are impacting the claims business in 2022:

1. Like many industries, the claims business is in the middle of a labor crisis.

Claims adjusting differs from other careers because no formal training or college degree provides a certificate or diploma. Rather, claims expertise is always passed from more-experienced adjusters to newer professionals.

With the labor crisis, it’s tougher than ever to recruit and retain experienced adjusters. In years past, new adjusters received longer training and often worked years in the claims trenches before promotions to management. Today’s carriers want to mentor and showcase their high performers, and promotions may come quickly. A promotion may come even as the new supervisor is still gaining the depth of experience needed to handle tough coverage and tactical decisions.

In an effort to remedy the gap in training and the current lack of personnel, claims managers incorporate as much technology as possible. Technology can be a training and timesaving tool. While technology in claims is not new, our shift is to take people with less experience and use various types of technology to acquaint them with handling more complex claims.

This technology actually helps us with recruiting in that trainees can learn at their own pace. Brown & Brown, parent company of American Claims Management, is launching a new tech tool that offers an “avatar” that assists adjusters in real-life claims scenarios by using programmed training sequences. The trainee works on-line, interacting with the training system using the avatar. This technology allows newer adjusters to solve real-life claims adjusting scenarios with help, resulting in their learning many new tips for claims handling and coverage problems.

Technology offers many advantages in training. In my experience, people seem to be more open when they’re role-playing with technology as opposed to with a person. When you consider the prevalence of remote work, using tech for training and development becomes even more vital.

Technology offers quicker responses to questions and keeps adjusters more focused on their work. Avatar training frees up managers, who are often buried in projects. Less-experienced adjusters learn to work alone, but with prompts from an online avatar that builds confidence and offers 24/7 support.

2. Claims are not slowing down despite the pauses from the pandemic.

There’s been an uptick in catastrophe claims. In both the primary markets and reinsurance space, winter storms and freezing weather have put catastrophe claims up about 34% over a 10-year average, reports Artemis, a company that analyzes alternative risk transfer and catastrophe bonds. Adding this increase in claims to a lack of staffing means assistance from automation is a critical component in keeping claims moving toward conclusion.

Customers are increasingly comfortable with mobile apps, virtual appraisals and portal-based claims handling. However, artificial intelligence in claims handling can be a double-edged sword. Some believe that an overreliance on technology can damage customers’ experience during critical moments of their insurer-client relationship.

We can’t forget the customer in the technology process. There should always be a clear path for customers to reach out to their adjusters for answers and reassurance.

3. Virtual inspections are here to stay.

Prior to the pandemic, in-person inspections on property claims were becoming more common. However, those inspections came to a screeching halt during COVID when claimants were concerned about anyone entering their homes or businesses.

For one solution, American Claims Management partnered with a company to do virtual estimating. Using a virtual photo/video tool for real-time estimates, claims adjusters can create a scope of repairs and estimates without leaving their desks. While this technology is not new, it has flourished during the pandemic.

I believe insurers will continue to embrace the virtual approach to claims handling. It’s not only a timesaver, but also less expensive and safer than dispatching an adjuster. Any time you can keep adjusters off roofs and out of traffic, it’s a win-win.

4. Technology must be an integrated part of claims handling.

Automation has been part of document-heavy and data-heavy claims for years. But now an overarching theme of integrating technology flows through every part of the claims process ― from training to adjusting to claims payment.

Insurers increasingly use artificial intelligence (AI) at first report of claims to identify factors that could impact claims outcomes. This includes fraud detection and malingering potential. And, in some cases, it can spot a claimant’s social media activities that could affect healing.

Just as an appraiser can estimate damages in an auto loss, carriers using AI report that the use of predictive technology can improve claims outcomes. Adjusters can focus closely on claims likely to escalate. One carrier is using AI to find the best adjuster to handle specific cases, according to McKinsey & Company, a firm that provides insurers with business intelligence.

Technology is clearly an integral part of today’s claims-handling experience. However, we can’t leave the customer to rely solely on technology. There still has to be human contact because any claim is a human experience. Even as we increasingly turn to technology, we can’t forget the human element.

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.