Claims adjudication is the point at which an insurance company fulfills its commitment to its customers to bear the cost of repairs in case of damages to the insured vehicle. The evolution within the auto insurance industry toward touchless claims processing had started long back, but it’s still taking time to become a part of a new reality. But why does the auto insurance industry need to transform the claims processing experience from automation into a touchless journey?
Claims Adjudication: Going from Automation to a Touchless Claims Handling
Claims automation, powered by AI-driven InsurTech solutions, has been presented as the solution to all the woes associated with inefficient and sluggish claims processes. A touchless claims process takes the process steps further. The entire process is handled and closed electronically with minimal or no touchpoints. The solution takes into account all the data, current and historical, to make authentications, assessments, and final settlement for payout estimation.
Some insurers have been leading the charge of embracing cutting-edge technology and transforming their claims processes to ensure faster and more accurate settlements. Allstate has already moved toward using technology to settle 90% of auto claims virtually. With touchless claims handling, the insured is notified electronically, and the claims are paid without any additional intervention by the claim handlers. Such initiatives tend to pay off by delivering better Net Promoter Scores (NPS) and a decrease in Loss Adjustment Expense (LAE).
Until recently, it was widely believed in the industry that while automation can tackle many data and process-related challenges, moving towards a completely touchless process for auto is not the way to go. Many argued that a touchless process would remove the human element from the transaction, which is critical to stay in touch with the customers. Still, some leading insurance companies moved towards making P&C claims settlement touchless. By going touchless, claim handlers can prioritize claims and close them faster. Experienced resources can be reallocated to handle more complex claims, leaving the repetitive tasks for the solution to handle.
While the debate about the importance and advantages of going touchless carried on, the impossible happened. In the aftermath of COVID-19 breakout, touchless claims now seem like the most prudent way of adjudicating claims. Presently, 79% of insurance leaders are looking to go touchless as compared to 49% just a year and a half ago. The adoption rate of virtual claims processing went up to 95% as compared to 79% during the same period of time last year.
Neural Networks to the Rescue: Accurate and Faster Payout Estimates
One of the most important steps in settling claims quickly is arriving at a fairly accurate payout estimate. When the payout estimate is off the mark, the customer is much more likely to reject it, and with disputes comes delay, the customer satisfaction scores suffer further.
Here are a few advantages that touchless claims can offer with regards to auto payout estimates:
Faster Damage Assessment Using Incident Images: With advanced deep learning capabilities and computer vision, an AI-powered solution can process the images of the incident and accurately assess the damage to the vehicle. The solution can then predict the repair cost and generate a fairly accurate payout estimate.
Quicker Analysis of Claims Data for Claim Authentication: The solution can quickly assess the authenticity of the claim by drawing comparisons with historical data and other available records. Its ability to process both structured and unstructured data means that all records are assessed, including claim handlers’ notes and supplemental images. Only the claims requiring further investigation are moved to investigators, rest are approved for settlement within a much shorter period of time.
Increased Accuracy in Payout Estimates with Predictive Analysis: Since all relevant data is assessed, the payout estimate is fairly accurate. The final settlement also then happens electronically, leading to higher customer satisfaction and low LAE.
The Future is Already Here
The advantages of touchless claims far outweigh the reservations. During the challenging socio-economic scenario currently emerging due to the pandemic, touchless claims do seem to be the right choice for customers and insurers.
A touchless claims process not just saves money for insurers, but also makes it hassle-free and error-free. It leads the way toward efficient claims management, reduced LAE, better NPS, and better loss ratios. Claims handlers benefit from going virtual as they are able to focus on more complex aspects of claims adjudication that requires their experience, investigative skills, and intuition.