In 2017 P&C insurers paid out over $101 billion in property losses related to CAT claims. That represents a 370% increase in payouts compared to 2016. There were 42 catastrophes in 2016. In 2017, there were 46.
Many insurers are reporting a decrease in frequency, but ultimately an increase in severity of claims - personal injury, auto, and P&C all make the list. This can be attributed to a number of factors including the cost of parts and repairs for new vehicles, distracted driving, climate change, and just general changes to lifestyle choice. According to mpower, there are three ways the industry is trying to combat this:
- Making Data-Driven Decisions: Gathering and analyzing the right data at First Notice of Loss (FNOL) can help indicate the course of a claim and assist with triage to ensure that carriers are handling the claim efficiently. By connecting the claims process to a consumer with a mobile device, claimant’s images could provide an enormous amount of information. Perhaps even determining total loss without the expense of towing a vehicle to the shop.
- Monitor Sensor Feedback: New vehicles average about 60 to 100 sensors in them, the uses of these sensors are moving far from just telling you if your car’s systems are functioning correctly. Monitoring driving through sensor feedback in real-time can reduce risk by delivering guidance about external safety hazards or alerting drivers when risky driving patterns are detected.
- Educate Drivers: Recent research has shown that many drivers are unaware of the safety limitations of their vehicles. For example, nearly 40 percent of drivers incorrectly reported that forward collision warning could apply the brakes in the case of an emergency when the technology is only designed to deliver a warning signal. It’s important that the automotive industry plays an active role in instructing drivers about the technology which helps improve road safety.
These suggestions can significantly impact the cost of claims processing, however claims processing can still be an arduous task when trying to communicate with claimants to close a file, and this is often where things start to fall apart.
So what are some effective ways to speed up your company’s claims process without adding significant cost?
Proactive Notifications: Handling claims inquiries and status updates is part of the job, but they also contribute to some of the highest time allocations for claims teams. Handling these inquiries via a call center requires a considerable amount of time and resources that could otherwise be spent on higher-value tasks. Proactive notifications aimed at updating clients at certain predetermined milestones can help to reduce inbound call volumes by 20%. An added bonus is a 24% increase in customer engagement helping to create brand loyalty and advocacy that will reflect in C/SAT and NPS scores
Automating FNOL Acknowledgements: Once the wheel of the claims process has started to rotate, claims triage takes the stage. Knowing where to route claims and how to allocate resources to manage those claims becomes a manual process that can require a lot of heavy lifting - collecting photos, documentation, statements, and other evidence to build the file. That said, is allocating claims center resources to this task really the best use of time? Why not allow AI systems to handle claims triage? Better yet, why not let clients interface directly with a chatbot-linked AI so they can submit their claim, supporting documentation, photos, and all relevant info in one place. It helps to ensure a more complete claims submission, and using AI for routing, the client can receive confirmation in real time saving FTE hours and tens of thousands of dollars per year.
Appointment Reminders: In health insurance, missed appointments are a huge cost. As much as 30% of appointments are skipped by claimants across the US each year, and this translates into a staggering $150 billion in losses to insurers. Add to that the delays in P&C claims due to unresponsive customers, missed repair appointments, and unresponsive or slow TPA’s, and the costs incurred begin to skyrocket. Understanding that not all appointments in question are missed intentionally, they none-the-less contribute to an unrecoverable amount incurred by insurers.
What solutions are available to curb the impact and monumental cost of missed appointments across insurance verticals? Something as simple as a reminder via phone, SMS (text), or email. Proactive reminders for appointments sent 2-3 days prior to an appointment have proven to be extremely effective in closing the loop. One research study published by the NCBI “...found consistent, strong evidence that all reminder systems are effective at reducing non-attendance at appointments across diverse service contexts and patient populations.” The NCBI study also found, “that reminders can increase patient cancellation/rebooking rates…” An added benefit of an appointment reminder system, cancellations and rebookings can increase utilization rates. Appointments that are cancelled or rescheduled as a result of the proactive reminder free up space for other clients.
Keeping the Claims Conversation Moving: On occasion clients who submit claims simply don’t have all the information at hand, or need to gather paperwork, take additional photos, or consult with repair facilities before the claims can be processed. These gaps in communication can be major stumbling blocks in the process, so how do insurers nudge the client to respond without further burdening their claims teams? Connecting with the client in their channel of choice and providing a timely, tone-sensitive reminder will significantly reduce these gaps while maintaining a positive CX. With added functionality like integrated text, the client can access a claims portal directly from their phone to upload missing data. For some insurers, response rates due to automated reminders have increased by over 70%.
Automate the Claims Closure Process: Swift resolution to a claim is advantageous for both the insured and insurer. On the client side, they can get their damages recovered sooner and move on with life. For the insurer, a speedier claim keeps costs down, which in turn, keep premiums down. For example, on a total loss settlement, the client may not be satisfied with the decision and enter into negotiations with their insurer to find a more amicable resolution. According to a report by J.D. Power and Associates, the average settlement value increases by $843 once claims settlement enters negotiation. With this in mind, why not automate portions of the claims closure and free up even more resources and expense within your claims teams? Proper data collection, analysis, and remuneration payments to TPA’s all factor in to shortening the claims cycle. In addition, managing policyholder expectations and informing them of the process during the claims cycle is critical to ensuring smooth closures.
With these 5 tips in mind, here are additional things to consider:
- Is your company collecting the right data from claimants?
- Has your company tracked communication consents and preferences with the claimant?
- How is this affecting your organization’s post-claims customer experience?
Lastly, a solid process for measuring post-claims satisfaction can be a tremendously helpful KPI and not only informs the insurer on the claims experience of the customer, but can also provide insight on the customer’s relationship with TPA’s giving insurers a more holistic view of the claims process and the effectiveness of their partners.
So…how do you measure up?
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