Remember how we used to book movie tickets back in the ’90s?
We’d call the movie theater, press a bunch of numbers (“for The Shawshank Redemption, please press 3”), wait 7 minutes to talk to a person (with increasingly annoying elevator music in the background), then realize we got something wrong and start all over again. It was a lengthy, frustrating, inefficient process, but we played along because we had no other choice.
Most industries wouldn’t think of putting their customers through such torment nowadays - we can shop, book tickets -even do our banking - all with a click of a button. We’ve gotten used to the ease and swiftness of digitization, and we aren’t looking back.
Insurance disruption - start-ups’ final frontier
For some reason - be it regulatory, or a dependency on outdated platforms and methods - the insurance industry is lagging behind. This works for now, as most customers are captive audiences - they may be frustrated with the current customer experience, but what alternative do they have?
The problem is, insurance companies can’t count on this status quo for much longer. The same disruption that Netflix brought to the entertainment industry, and Uber brought to transportation - is coming for insurance. More and more start-ups and tech companies plan on entering the insurance space, and carriers that don’t enhance their customer experience through digital and automation will be left behind.
How automation can revolutionize insurance claims
There are many ways to improve customer experience through automation and digitization. In this article, we’ll focus on one pivotal use case - car insurance claims - to illustrate how each touchpoint throughout the customer journey can be enhanced, creating a fast, easy, and frictionless experience.
Notification of loss
Say your customer got into an accident. On average, they’d have to spend half an hour on the claims hotline to report the first notification of loss. That's a long process and wait time in any scenario, but while standing at the side of the road, worried and shaken after an accident - it’s simply inconceivable.
Now imagine this - your customer has a telematics device in their car, connected to an automated damage inspection and damage-repair cost estimation system on your end. Sounds futuristic? Here’s how it works: at the moment of impact, you automatically send your customer a text or email with a link to an FNOL (first notification of loss) form.
In the link, they find a guided photo session, walking them through the process of documenting the damage with their phone’s camera. Once uploaded, the photos are automatically inspected, sending both you and the customer a full damage and cost estimation report - on the spot.
The whole process takes less than 3 minutes, and benefits everyone - your customers know where they stand insurance-wise, and you have a full, detailed report from the exact time and location of the impact.
And here’s the kicker - combining telematics with a photo-session is the easiest way to detect car-insurance fraud, since both have a time and location signature. Comparing the two can tell you when customers are being truthful, and when there’s fraudulent activity at play.
Transparency throughout the process
Once the FNOL is submitted, customers are made to wait several weeks, often months, for their claim settlement. What makes the experience even worse is the lack of transparency regarding the claim’s status and the discrepancies between different sources (the claims manager, appraiser, repair workshop, etc.) on the estimated costs and timelines.
With real-time processing and reports, customers get an assessment of the damages and costs on the spot, and can access said reports online anytime they like, including any relevant updates from the insurer.
And while transparency is crucial in building customer-trust, it has actual operational benefits. Approximately 20% of calls to call centers and agents are status requests. With automatic online updates, insurers can reduce costs and simplify operations significantly.
Claims management and settlement
Any claims manager will tell you they’re swamped. Their workload is a real problem, exacerbated by the fact they also have to do the initial triage - sorting through small, intermediate, and large claims.
Now imagine simplifying this process based on the automated FNOL reports. Since these reports also contain a high-level indication of the severity of the damage, you could decide to fast track all smaller claims, or even use automation - sending all small claims (for instance slight scratches, with a repair-cost estimation below a certain threshold) straight trough to cash settlement.
In the next few years, we’ll witness one of the greatest revolutions the insurance industry has seen to date. Digital automation will transform the way customers interact with their insurers, just as it’s transformed customer-company relationships in every other industry.
Change can be tough, but it can also be incredibly rewarding - companies leveraging digital automation raise customer satisfaction by 10-15 points, and are expected to more-than-double profits in the course of five years. But most importantly - since most Insurance companies are just now discovering automation, there’s no time like the present to leapfrog, and position yourself as a tech-saavy, customer obsessed company .