This time this past year, the future of claims was looking increasingly automated. However, we never might have imagined what 2021 would have in store and how it would force everyone around the world to reside and be 'virtual'. Insurance and claims aren't any different. According to the LexisNexis 2021 Way forward for Claims Report, 95% of auto insurance carriers surveyed were already using or considering using virtual claims processes and 79% were considering or open to the idea of touchless claims. So while the insurance industry had been coming to fully automating claims pre-pandemic, COVID-19 drastically increased the sense of urgency for insurers to quickly automate claims.
The industry has known it must move in the direction of greatly accelerating the use of virtual claims, but before 2021 only small steps have been taken to make it happen. Then COVID-19 happened, and because of the pandemic, insurers quickly realized they needed to transform and move at lightning speed to get each step of the claims process to function smoothly while virtual. This awakening has already proven to be successful and today is the time for insurers to build up and refine their strategic roadmap to complete the digital transformation for claims handling.
Looking ahead, it's unrealistic to think claims may become completely automated overnight, but as we look ahead to 2025, the landscape looks promising. We've analyzed how the car insurance market is moving towards claims automation. In six key steps, we identified specific projections for where we believe the is going to be by 2025.
Roadmap to 2025 claims automation
Based on industry-provided information, we expect a lot more than 80% of auto insurance claims processed in 2025 to become virtual with as many as 50% of non-injury claims being fully automated. For carriers once unwilling to fully automate their process, citing fears of unnecessary errors and a greater risk of fraud in non-complex claims, 2021 has allowed them to check it out. The outcomes so far are encouraging, with carriers using claims automation reporting faster cycle times, increased employee productivity, lower loss adjustment expense and higher client satisfaction.
As soon being an accident occurs, the first step is to file an initial notice of loss report . The FNOL process requires insurers to collect information about the folks and vehicles involved as well as the insurance information of the at-fault party. This method may take a long time for carriers and often much of this details are unavailable until a police report is received.
However, once this assessment becomes automated, all of those other claims process becomes simpler to automate and expedite. Our studies have shown that by 2025, half of the FNOL reports for non-injury claims will be automated – to the point where drivers can complete their FNOL having a handful of simple clicks using their smartphone or allow their car to report losing with perhaps only a voice command from the scene from the accident.
The next thing within the claims process is determining the liability for that accident. Carriers can wait for a police report, however this can take some time to traditionally requires an adjuster to review the information to help make the liability decision. And in the interim, as cars are becoming increasingly connected, with nearly
