How the coronavirus has helped accelerate the digitalisation of insurance claims

The digitalisation efforts the insurance industry is seeing as a result of the coronavirus pandemic is not new, it’s just accelerating an existing trend, according to a recent webinar. 

The webinar, The New Claims Agenda: Strategic Priorities for Claims in the new Insurance Landscape, was moderated by Greg Donaldson, senior analyst at Aite Group, and explored how the claims process is changing as a result of the coronavirus. The discussion featured Tractable co-founder and president Adrien Cohen, Generali global head of claims Mario Ricco and Allianz UK chief claims officer Graham Gibson.

Just going back six months, the concept of the world going on widespread lockdown would be pretty ludicrous. No one could have expected workforces to work remotely and businesses around the world moving to digital operations just to stay in business. Yet, here we are, and as a result, the world is unlikely to go back to where it was. While the pandemic has been devastating and an awful situation, there are a couple of positives the industry can take away. Namely, the increased digitalisation the market is seeing.

Graham Gibson, the chief claims officer at Allianz UK said, “We have changed more in the last two months than we probably have in the last two years.” The whole panel agreed with the idea that insurers have been working quickly to respond to the changing environment. Tractable co-founder and president Adrien Cohen added, “To succeed we’re going to have to enable the industry to accelerate digital adoption.”

With masses of people being forced to work from home and the ability to meet face-to-face with customers no longer being an option at the moment, there is no more time to simply talk about digitalisation plans, insurers have to act. This means many are adapting their operations to meet the new need. For a lot of companies it’s working and Generali global head of claims Mario Ricco stated that more people in claims will be working from home once the pandemic is over as it has worked and people have seen the benefits.

Cohen said, “What we’re hearing from our clients across the world is an increased sense of urgency. With Covid-19, there has been more urgency in the market for virtual technology. I think insurers want technology that’s going to be able to help the appraisers, the body shops, and eventually provide a touchless experience for their policy holders, where it makes sense.” Cohen added, “This is not new, this is rather the acceleration of the trend that was already in place.”

In the auto claims space, AI technology is being used in a variety of ways to boost the efficiency and consistency of claims. Cohen stated, “If you use AI for appraising the damage, it’s a bit like having an expert that has seen millions of vehicles and can proceed to perform this task in seconds.” The technology can be used to ensure firms can assess the damage of the vehicle, without having to physically be there, but get the same level of accuracy as if they were.

Tractable, which was founded in 2014, offers an AI-powered computer vision solution which can remotely appraise the damage in car accidents and natural disasters. Its technology is used by 15 insurers, spanning 12 countries, and has helped to process $1bn in claims.

The platform can provide carriers with a contact-free solution to handle automotive claims. It works by the policyholder simply uploading pictures of their damaged vehicle to the platform, where the AI will assess the damage to determine the costs of repair. After this has been completed in real-time, the claims handler makes a decision.

Cohen went on to explain Tractable’s client Ageas is using the AI technology to help customers get quicker answers for their auto claims. When a policyholder makes a claim, they are sent a link where they upload a few images of the incident, the AI assesses this and immediately gives the consumer a decision on whether the vehicle should be repaired or not. This happens before they even end the initial phone call. Another one of Tractable’s clients gives instant cash settlements based off of the first images they send.

It’s not just the initial claims application that AI technology can help to improve. Cohen explained that its technology is also used to help vehicle repair garages improve their output through the technology. AI can be integrated to visually review 100% of the estimate and used to keep both the insurer and repairer on the same page and minimise the amount of back and forth.

Combatting fraud

Online fraud is an endless battle and is unlikely to ever disappear or even become a minor issue. Fraudsters are always adapting and improving their tactics to find new vulnerabilities within businesses. In the US alone, the FBI claims insurance fraud costs the industry around $40bn per year and costs the average family between $400 and $700 each year. If companies are accelerating the rate in which they are digitalising, they need to ensure they are giving the same attention to their online fraud protection processes.

Gibson said, “If you’re not running automated AI across your digital estate from a fraud perspective, you’re probably in very deep trouble. There’s no point putting a brick in the wall. You need to build a wall. You need several bricks that do very different things as fraudsters are quite clever folk.” The idea is to have this wall filled with as many types of protections that it makes it very hard for fraudsters to scale it. Gibson went on to state that one of thee “bricks” needs to be real-time analysis of the digital estate. This ensures the company can identify incidents as soon as they happen.

However, that doesn’t mean the company should solely rely on technology, there still needs to be a human layer. Ricco stated that it’s not good enough just to have algorithms for automated fraud detection, but there needs to be security experts that can inform the team of areas that need to be bolstered or types of fraud that need to be looked out for.

To which, Cohen added that fighting fraud needs to be a collaborative effort between the insurer and a vendor. Fraudsters will use a variety of tactics in scamming the insurer, such as faking claims images, trying to mislead the AI, reuse photos and more. The only way to stop these working, Cohen believes a company needs to continuously improve and add modules to catch the attempts, with both the vendor and insurer working together to spot them.


To view the full webinar click here.

Tractable also participated in a previous Reuters webinar, which explored how auto claims is changing.

Copyright © 2020 FinTech Global

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