A 2021 “Way forward for Claims” survey of 25 leading auto insurers found six of them using or piloting “touchless claims” potentially fully managed by technology, LexisNexis reported recently.
Five from the six come from Top ten carriers, according to LexisNexis. Two years ago, no executives LexisNexis polled said they’d reached that much cla of deployment.
LexisNexis defines “touchless claims” as claims handled potentially without any involvement.
“Technology handles the entire claims process, including damage assessment and electronic customer communication,” LexisNexis wrote within the “Way forward for Claims Report.” “A system audit determines when the claim gets approved. If so, it's paid automatically without human intervention.”
The study also found six more Top 50 insurers using “virtual claims” than two years ago. LexisNexis defines this as remote processes like human photo estimating or video chats.
Ironically, the number of executives sure they wouldn’t use touchless claims rose by three from 2021, and the other Top 50 executive agreed they wouldn’t use virtual claims.
The slight rise in naysayers is interesting given LexisNexis also found some insurers who had gone nearly all virtual throughout the pandemic have scaled back this methodology.
“Before the shutdown, fewer than 15% of claims were handled virtually,” LexisNexis wrote, citing feedback from LexisNexis Risk Solutions customers. “According to our conversations with carriers, when the first shutdown was implemented, virtual claims handling increased to almost 100%. Almost a year later, virtual claims handling has settled to some level of a little over 60%.”
LexisNexis found all 25 carriers were using traditional field inspections, and 23 were using “Fast Track” processes involving a third-party, like a repair shop, writing the initial estimate. Both were slight increases over 2021.
But it seems clear virtual claims and touchless claims are going to be the trends for shops to look at going forward, like it or otherwise. The LexisNexis report reiterated author Bill Brower’s predictions out of this winter that 80 % of claims will be virtual in 2025. Up to 50 % would be touchless.
Brower told a b.M. Best webinar May 26 he didn’t know if it would even take 4 years to achieve the 80 % virtual figure again. “I think it’s coming just a little quicker,” said Brower, a LexisNexis vice president of U.S. auto claims strategy.
From a shop’s perspective, it’s also interesting to determine the concepts insurers associated with automated claims in 2021 and 2021. 3 insurance executives surveyed linked autonomy to “Smarter solutions / AI” in 2021, according to LexisNexis.
In 2021, time had soared to 13 — over fifty percent from the carriers polled. It tied with speed as the most mentioned association related to automation.
LexisNexis broke it down further. Six insurers viewed autonomy in an effort to make estimate decisions, and 4 saw it as a way of segmenting claims. Three were considering automated payouts, and 2 checked out the program selection at “Various points in claims process.”
“The carrier conversation is shifting from automation driving efficiency to automation driving decisioning,” LexisNexis wrote.
Perhaps surprisingly given body shops’ criticisms of some insurers putting cost above proper repair, only five of the Top 50 insurers associated claims automation with saving money — exactly the same number as with 2021. Yet this year’s survey also found four more insurers linking AI using the concept of fewer touchpoints and 2 more viewing it as being a means of reducing labor.
Besides Brower, the May 26 A.M. Best webinar featured two 5 best insurers: No. 4 Allstate with no. 5 USAA. Both explored insurer deployment of virtual and touchless ones.
“I believe that future’s here,” USAA auto claims operations Vice President Ramon Lopez said of touchless claims. His company has since 2021 been dealing with Mitchell and Google on AI photo estimating, and Lopez described that project as suitable for low-complexity losses.
“It’s not full-turnkey at this time,” he said.
Lopez pointed out that organization was essential for touchless claims. He noted that the insurer would still need to make a “human touch” available, and external considerations like body shops and rental cars would have to be built-into whatever solution some insurance company offered.
Allstate auto line director Sandee Lindorfer observed Allstate had old virtual claims coupled with started video chatting with body shops on supplements prior to COVID-19.
“Our customers embraced digital experience,” she said.
She estimated about 18,000 body shops were using the video chat feature when COVID-19 struck. She said the pandemic boosted the dpi to a lot more than 23,000 repairers utilizing it for both initial estimates and supplements.
“It enables us to quickly service that customer,” Lindorfer said. She said the video chat also proved helpful in situations where the customer still had the automobile with them.
Lopez said USAA had already been moving to some more digital front, and he said these were able to expand virtual estimating across the USAA books during COVID-19. He said it yielded “a brand new skill” for USAA staff and cut down on the labor required by policyholders.
Asked when they saw further claims automation beyond estimating, both Lindorfer and Lopez said yes.
Lindorfer said “the following step” would be to use AI to trap total losses.
‘Early identification of total loss is underway,” Lindorfer said. But the concept of automating total loss valuation was also a “big innovative idea,” she said, describing this as the second current effort inside the insurance industry.
Photo damage detection in the first notice of loss might have an advantage besides obtaining a quote, according to Lindorfer. She said using technology here might lessen the quantity of information a customer must provide.
“I couldn’t agree more,” Lopez said after Lindorfer finished speaking.
Lopez also pointed out that fraud prevention would be fundamental to an electronic experience. “We’re gonna be a lot more sophisticated in fraud modelling,” Lopez said.
Lindorfer agreed, calling combating fraud “this type of critical part” of digital claims.
Lopez said touchless claims would “absolutely be a reality,” which will be the case on many claims. He also predicted that through telematics “fairly soon,” insurers would “together with your permission” determine if a person have been within an accident.
“This unlocks a whole new bevvy of services,” Lopez said. Data permits “very effortless experiences,” he explained.
Lopez also predicted sophistication would grow. He said insurers might also expand to “value-added services” for example leveraging data to predict who might be affected by a storm and help mitigate harm to the vehicle in advance.
