The midpoint of 2020 has just passed without greater clarity about how 2021 and beyond will look from an economic perspective. The only certainty is that it will be different than the past and vastly different from how the future was envisioned only six months ago. Despite this uncertainty, the pandemic has accelerated insurers’ willingness to try new things as the old way of operating is no longer viable. Claims organizations have been at the forefront of this transformation since so many processes were analog and on site.
Claims is the pivot point where the purchase-time promises of coverage and service face the reality of legacy claims handling processes, which can be opaque and focus on legal and regulatory risk mitigation. Let’s face it, many carriers haven’t thought of claims processing as a competitive advantage as much as an operational requirement. Leading carriers have been changing this lens over the last several years with the realization that transparency, digital engagement, and faster claim cycle times provide customer retention benefits as well as loss adjustment expense and loss cost advantages.
The pandemic helped break down the barrier of carrier reluctance to embrace greater claims automation combined with digital and virtual processes. The days of waiting for an adjuster to come out and inspect a vehicle or property damage vanished quickly as many states went into lockdown. The insurers who had the foresight to transform legacy processes had a clear advantage over those who did not. The good news is that many carriers have implemented virtual adjusting through photos; horizontal platforms such as Zoom; or industry vertical solutions such as Livegenic, ClaimXperience, and a host of InsureTechs since the pandemic hit.
Novarica has been advocating a test-and-learn approach for new capabilities to help insurers gain insight into how best to create workflows that incorporate new technology to create an optimal experience for adjusters and claimants. The pandemic accelerated this approach by providing a production opportunity to test and learn. Some early adaptations of the photo adjusting process incorporated live video collaboration to handle a wider variety of claims that aren’t low severity. Interest has also increased in aerial imagery for more remote areas.
Digital payment solutions have also been gaining traction since the pandemic hit and may help to displace the decades-old paper claim check process. Speed of payment as well as payment type flexibility are key advantages for claimants, and lower processing costs are attractive to carriers.
Claims transformation is underway across the industry, with the pandemic as the accelerator to much of the change. Novarica has covered the industry, technology, and challenges throughout our research. We have reported on insights related to the pandemic in our virtual town halls and various blogs and articles found in our COVID-19 resource center. On August 13, my colleague Mitch Wein and I will host our Virtual Special Interest Group on the latest claims-related challenges for property/casualty insurers. Please register and join the conversation.
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