Over time, both insurtechs and traditional carriers have moved toward more cohesive strategies that have led to strategic alliances, partnerships and even investments.

Why Innovate Claims?

Claims costs consume an average of approximately 80 percent of all premium income. From a customer experience standpoint, servicing claims represents the single best opportunity that carriers have to interact with their policyholders and deliver on the insurer's promise of total claims satisfaction. Because consumers had already become enamored by the convenience of mobile and digital experiences delivered by platforms such as Amazon, Apple, Netflix, Google, etc., customers naturally began to evaluate all other service levels by those standards.

Claims Transformation

Historically, claims processing has been bogged down and overwhelmed by its comprehensive and labor-intensive process. Moving from paper and photo files to an online data entry system was itself a time-consuming and laborious process as years of data had to be moved forward from various locations and segments into a comprehensive and readily accessible database. Initially, there were many providers that were small, independent businesses who either didn't have access to computer technology or balked at its usage. There were vast numbers of service providers in fragmented industries, each having their own claims handling methods and processes. Moving to a digital transformation not only seemed overwhelming, but almost impossible, causing some carriers to lag behind the movement as they didn't have the resources or investment capital to make the transformation and thus lacked the commitment. Only those with large pools of investment capital for new technologies and visionary leadership were eventually able to transform the entire digital claims process from end-to-end, initially starting with personal auto.

Time Advancements

With today's almost touchless claims processing, this has reduced the time cycle from days or weeks down to seconds, minutes and hours. Advancements in artificial intelligence, machine learning, robotics, connected vehicles, drones and IoT devices have elevated the way claims are reported, managed and processed, which has brought about greater efficiencies in the claims process. This has not only saved time, and thus expense, for the industry, but has also brought about improved customer satisfaction, which leads to increased policy retention. This will continue to be the case as these advancements in technology enable even greater efficiencies.

The Future of Claims

With COVID-19 and the effects of the pandemic, this has forced the acceleration of the future of claims technology. Of all the insurance services, the claims service was the most vital to continue during shutdown, and most claims professionals were enabled to work from home within a matter of just a few weeks. The newer technologies became critically important as the virtual and touchless claims concept became a reality almost overnight. Insurers' use of customer self-service, photo estimating and artificial intelligence-supported claims expanded at a record pace. Even as auto insurers accelerated the use and adoption of digital tools in response to COVID-19, claims have exceeded double digit growth since the beginning of the year. Digital claims payments were also more attractive to policyholders since the delay for printing and mailing paper checks was no longer practical as claimants needed settlement funds quickly.