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.
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 – 24x7 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.
The FedNat Insured Web is a great tool for our insureds!
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The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
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What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.