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How AI & automation help insurers deliver exceptional claims experiences

Insurance
3
MIN READ
How AI & automation help insurers deliver exceptional claims experiences
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Key Takeaways
  • Insurers can look to AI & automation to elevate their claims experience, from start to finish.
  • Claims automation decreases costs including LAE & FTE, while enhancing customer satisfaction.
  • By improving the claims experience, insurers can save lives & become the digital sentinel for their customers.

Earlier this year, McKinsey’s article, “Insurance 2030 - The impact of AI on the future of insurance,” launched us into the future. The article painted a picture of what insurance would likely look like in less than a decade. 

Unsurprisingly, McKinsey honed in on both automation and artificial intelligence as important trends that insurers should start preparing for now.

“As AI becomes more deeply integrated in the industry, carriers must position themselves to respond to the changing business landscape. Insurance executives must understand the factors that will contribute to this change and how AI will reshape claims, distribution, and underwriting and pricing.”

- McKinsey, 2021

Digital transformation across the industry is happening now, thanks in part to pandemic-era consumer trends. 

One area primed for improvement is the claims process. Traditionally lengthy, tedious, and sometimes overly complex for both auto insurers and policyholders, claims need a refresh (and perhaps an overhaul). But the future is bright: McKinsey predicts that over half of all claims activities will be automated by 2030. 

To that point, let’s explore why insurers can look to AI & automation to elevate their claims experience, from start to finish.

Leveraging AI & automation to enhance the insurance claims experience

Boosting customer satisfaction, loyalty, and retention 

Let’s start with two key steps in the customer journey: loyalty and retention. During a time when insurers are both eager to understand which pandemic-era consumer lifestyle changes will stick, and how to compete for talent in an increasingly competitive market, the best players will focus on making processes smoother, more seamless, and more enjoyable.

As evidenced by other legacy industries embracing digital transformation, automating previously tedious or outdated processes like claims can lead to improved customer satisfaction, loyalty, and retention.

“What our customer wants is immediate and efficient access to us. They want to know automatically what is happening with their claims. Managing customer expectations around what is going to happen in one week or in two weeks and keeping them updated [are already things that we do]. It has eliminated a lot of the contact points with our officers and we know in part it drives customer satisfaction.” 

- Steve Tait, Head of Claims Automation at RSA Insurance Group, Reuters Insurance

Transforming a claim’s turnaround time from weeks to minutes - and reducing the number of touch points in the process - is one important way claims automation can improve customer experience and satisfaction. 

Low costs, high scalability

Beyond benefiting from keeping their customers happy, insurers get to dodge breaking the bank in leveling up on their claims processes. When partnered with a reliable, smartphone-centric, mobility risk intelligence provider, they can benefit from quick, easy, and low-cost scalability. 

By leveraging hardware that already exists in the hands of policyholders, they save on any additional hardware costs, all while providing personalized experiences with customers straight from their preferred channels: their smartphones. 

Raising LTV through trust and credibility

Improving the customer experience through claims automation extends even further, to building trust and credibility with policyholders. 

Drivers today may be lucky enough to not experience an accident, but they do listen to the stories of those who have. They’re looking for peace of mind when they’re on the road, and they want to know that in case of a collision, their insurers are right there to take care of them.

Being able to send automatic collision notifications, instant assistance, and automated claims right from the “moments of truth” strengthens that relationship between customer and carrier, and that ultimately leads to higher loan-to-value ratios (LTV).

Detecting collisions and responding based on collision type

Insurers who invest in an AI-powered claims automation solution benefit from the ability to detect collisions, and provide subsequent experiences through policyholder smartphones based on the nature of these collisions.

Mobility risk intelligence providers like Zendrive use AI algorithms to automatically detect collisions and send instant notifications to drivers. And to take it a step further, the solution can also distinguish between certain types of collisions, such as low-speed and high-speed. 

For example, if a driver is in a low-speed collision, they can receive options to proceed to the next steps (such as automatic FNOL filing or calling a family member), whereas a high-speed collision would automatically dispatch emergency help to their location. 

Lowering loss adjustment expenses

Option for solutions with smartphone-based automatic collision detection also helps insurers lower their loss adjustment expenses (LAE). That’s because insurers can analyze claims faster, straight from that moment of truth, reducing claims cycle time and boosting overall adjuster efficiency.

Automating the FNOL to make informed decisions (and avoid fraud)

Automating claims right from the initial FNOL process allows insurers to make more informed, timely decisions on towing, garaging, repair, and more. This instant, detailed information simultaneously allows claims adjusters to review more cases in a given timeframe, reducing full-time equivalent (FTE) costs for insurers.

Plus, getting access to specific information, such as whether the car was being driven at the time of the reported collision, allows insurers to better understand a given accident and thus reduces the likelihood of insurance fraud.

Moving forward: Keeping the human touch while becoming the digital sentinel

In today’s market, claims automation is the way forward for insurers. Starting or continuing that journey toward automation - and acting now to prepare for the future - will be key for those who hope to meet customer needs and remain competitive.

Of course, it’s worth emphasizing that the shift toward AI-powered claims technology doesn’t mean human touchpoints will cease to exist. McKinsey’s 2030 prediction states that the future of human claims management will solely focus on specific areas, from complex claims to claims linked to system issues (i.e., hacked IoT systems), to “random manual reviews of claims to ensure sufficient oversight of algorithmic decision making.”

“It’s almost like having a small robot on your shoulders helping you make a decision, but it’s still ultimately down to the human. AI is not about entirely new processes, but it’s about changing the culture we’ve been working in so the business is looking for these insights and wanting the support to act on them.”

- Steve Tait, Reuters Insurance

All of that said, we’ll end by stressing one important point: automating the claims process saves lives, rendering insurers the digital sentinel. That’s an opportunity to act on.

How AI & automation help insurers deliver exceptional claims experiences
Burleson Smith
Product Marketing Manager
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