Touchless Claims Report – New Insurance Research

Last Thanksgiving, America saw more people shopping online than in stores – almost 10 million more, to be exact. The scale has tipped, confirming a major shift in consumer habits toward digitalization. The shift doesn’t just apply to the stuff we buy. Six in 10 millennials prefer to consume their news online, according to Reuters. In auto insurance, the push for digital claims processing is yet another sign of the times.

To some extent, the trend here is driven by the same factors driving digitization everywhere else: digital solutions can be alluringly fast, convenient and sleek. But for auto insurance, there are also other drivers:

• A rise in claims frequency and severity (a recovering economy puts more cars on the road)
• A talent shortage (one in four insurance professionals are expected to retire in 2018)
• A need to reduce loss adjustment expense (LAE has outpaced premiums every year for a decade)

Regardless of what the drivers are, the answer is the same. Data analytics offer insurers a tool able to meet the challenges of a digital era, especially where claims processing is concerned – which is just what LexisNexis set out to understand in their latest report, the 2017 Future of Claims Study.

Automation matters

All the study’s respondents admitted to using a traditional claims approach, in which an adjuster makes onsite visits to inspect property damage and prepare estimates. Yet many have begun to incorporate some automation, and the more comprehensively they do so, the lower their cycle times become. In the most pronounced cases, what used to take 15 days now takes only two.

“A large majority of the senior level insurance executives recognized the importance of increasing auto claims automation as a critical or top priority,” said LexisNexis.

The automation of which they speak can refer to several things: Tech-enabled assessments and remote processing (Virtual Handling), external damage estimates (Fast Track), and fully tech-enabled processes that don’t involve an adjuster or carrier employee at all (Touchless Handling).

In any case, it’s becoming evident that virtual processing is a necessity for insurers that want to stay competitive. For those that want to go further, touchless processing is the next big thing.

Is touchless too impersonal?

Not everyone is ready to embrace a claims process that requires no human involvement. However, the reasons for hesitance are worth questioning.

“Resistance to touchless handling has more to do with concern about giving up the human touch entirely, a concern not based so much in fact but rather on the perception of potential disengagement with customers,” LexisNexis said. But those perceptions belong to insurers, not customers, who by all measures are eager for digital services, expanded options, and the benefits that come with them – 24×7 uptime being a good example.

For insurers, there are benefits too:

• Better customer satisfaction
• Lower LAE and cycle times
• A way to address the talent shortage

“Though the carriers we talked to are not yet unilaterally embracing Touchless Handling, we believe touchless claims are a viable and inevitable emerging trend,” said LexisNexis.

Will your core system hold up?

Claims automation – at whatever level you may choose to offer it – requires more than a legacy system. To deliver a seamless customer experience that speeds cycle times and lowers LAE, you need technology that’s up to the task. If you have any doubts about your system’s agility, talk to us or request a Silvervine insurance software demo.