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From smart homes or businesses that report their own water leaks to 24-hour, multichannel customer engagement, the insurance claims process is being swept into the insurtech revolution, according to industry sources.
The changes create more communication choices for consumers and businesses, but more security challenges for insurers and potential privacy concerns.
“There’s not a conversation we’re having with clients that doesn’t cover looking at the end-to-end claim lifecycle and how we can use technology to make it cleaner, clearer and faster,” said Darcy Dague, managing director in Accenture PLC’s insurance practice in Chicago.
She cited “the ability to automate the first notice of loss process and make that process more automated and seamless” as an example, possibly using a mobile application that a person can click into that will prepopulate fields with a claimant’s information and prompts for a next step, such as to add photos of a claim.
This is just the case at claims manager Crawford & Co., which is using sensors and smart home technology to take personal and commercial policyholders out of the first notice of loss loop.
“You have the capabilities now to do direct sensing of water to provide earlier intervention,” said Kenneth Tolson, Crawford’s U.S. president of claims solutions in Peachtree Corners, Georgia.
About 37% of claims have some tie-in to an escape of water issue, he said.
“We really try to integrate in the new water sensor, (‘internet of things’)-type technology to where we could have a smart home or smart business report directly into our 24-hour call center, which allows the (first notice of loss) to be established at that time,” said Michael Beverly, Crawford’s property product manager for U.S. claims solutions in Peachtree Corners.
Insurers can use satellite imagery of a property loss to gather data such as measurements to estimate materials needs and costs, which can be bought automatically, said John Meder, Raleigh, North Carolina-based executive vice president of USI Insurance Services LLC’s risk advisory practice.
“You typically have feet on the ground, but it’s getting to the point where you can do a lot more from behind a desk without having to go out,” Mr. Meder said.
Cloud storage is another popular technology seeing wider use. However, as insurers make the move to the cloud to address data storage issues including cost and volume, issues such as security and related regulation surface, Ms. Dague said.
“How do we secure our data properly?” is a question insurers must face. Similarly, privacy concerns arise with the automation of systems such as Crawford’s water sensors.
“What are the sensors reporting?” Mr. Beverly asked rhetorically.
“The privacy concern is a real one,” Mr. Tolson said.
Distributed ledger technology, often called blockchain, is another technology being used to help information sharing during the claims process, such as from one insurer to another, said Matthew Lehman, managing director in Accenture PLC’s insurance practice in Chicago. “DLT helps to facilitate those types of interactions.”
Multiple, parallel channels for customer interaction are also being used in the claims sector, sources said, something being fed by online experiences in other industries like retail and banking, sources said.
“We’re seeing a lot of interaction methods which are happening in industries outside insurance now coming into insurance,” such as messaging and text-type apps, Mr. Lehman said. “Doing more from your phone via text, that’s just a more natural engagement method.”
“Digital channels are growing just because of the way we interact today and because there are more millennials in the workforce,” said Sri Sridharan, U.S. chief claims officer in Chicago for Marsh LLC.
“The expectation is going to keep changing because people are getting that in other places so they are going to expect the same level of response and engagement from insurance and claims as well,” Mr. Sridharan said.
“We have seen over the last three years an increased utilization of our digital products by claimants, clients and policyholders,” Jason Landrum, global chief information officer in Memphis, Tennessee, for Sedgwick Claims Management Services Inc., said in an email. “Handhelds are one of the main ways that consumers are beginning to engage with us during the claims process.”
“The ability to capture in real time videos and photos from the site are giving new and more accurate information that can be applied to the claims process. So, the mobile and immediacy of access is definitely a tool being leveraged,” he added.
Policyholders show different preferences, utilizing different digital channels, sometime in combination with human contact, sources said.
“At different times, different parties will respond to different channels. Sometimes a phone call is needed, but in some circumstances a text or email, which can be automated, is best,” said Jamie Yoder, president of Snapsheet Inc. in Chicago.
In follow-ups for additional information, “We find that if you are contacted via text, we get a response within minutes 70% of the time versus a phone call,” which sees a longer lag time, Mr. Yoder said.
Human touch points remain part of the process for some claims, however.
Snapsheet is designed to pull in human input when required, Mr. Yoder said. “Our process always assumes that some combination may occur as the claim is discovered – and that over time, that mix will continue to evolve,” he said.
“What we’re doing is employing data points and processing information faster and more accurately than we’ve ever done, or can be done by a human, so that a human can then step in and make a better informed decision,” Mr. Meder said.
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