Repairers should be prepared that digital claims are likely to remain prevalent being used by carriers like Allstate and Travelers, as part of strategic initiatives to decrease expenses and transform the way business is done.
A recent PropertyCasualty360 article written by Safekeep-CCC Senior V . p . Jeff To and Friss CEO/co-founder Jeroen Morrenhof states “claims leaders are planning on possibilities to automate workflows, empower claims professionals with decision support tools and knowledge, and connect policyholder experiences to the back office.” Backing at least part of their take are statements made during Allstate and Travelers 2022 Q4 earnings calls where both insurers stated they’ve had success with implementing digital, AI-based claims processes. Both companies reported continued increases within the frequency and severity of claims.
Coined as a reaction to COVID-19 pandemic lockdowns and today convenient for customers, digital claims are seemingly not going anywhere soon like a technique for carriers. This means repairers will probably still face the challenges associated with what many have referred to as significant differences between more thorough in-person repair plans according to OEM repair procedures in contrast to virtual estimates according to photos.
Allstate Chair, President, and CEO Tom Wilson said the company’s expense reduction program is “well laid out” and “includes everything from using digital processes and getting rid of extra labor to presenting more outsourcing and cleaning up our processes and reducing our technology costs using the new platform.”
In December 2022, Allstate organized a “Transformative Growth Plan that leverages the Allstate brand, people, and technology to accelerate development in its personal property-liability business.” In September 2022, Allstate said it would cut costs with a restructuring “which will impact approximately 3,800 employees primarily in claims, sales, service and support functions.”
It was unclear from the earnings call if “getting rid of extra labor” would signify a similar effort.
Wilson said Allstate continues to be “an innovator in product innovation, multi-channel distribution and leveraging technology in telematics and claims settlement” and is working on “building a low-cost digital insurer with broad distribution through transformative growth.”Allstate President of Property-Liability Glenn Shapiro said the company is “leveraging advanced claim capabilities to mitigate loss cost pressure” for purchasers.”We’re broadening strategic partnerships with part suppliers and repair facilities to mitigate repair costs,” he explained. “We’re using advanced claim analytics and predictive modeling tools to optimize repair versus total loss decisions and to measure the likelihood for injury and attorney representation on casualty claims. The end result is we're highly positive about our ability to restore auto profitability to targeted levels.”
Travelers Chairman and CEO Alan Schnitzer called it “digitizing the worth chain.”
“For example, we're digitizing the value chain, leveraging cloud technology, leaning into artificial intelligence for from simple automation to deep learning, tapping into new data sources, and building increasingly accurate predictive models,” he said. “With meaningful possibilities to transform the way in which business is done, scale is going to be an ever more important differentiator.”
Executive Vice President and President of private Insurance Michael Klein touted the company’s new IntelliDrivePlus, which is obtainable in Arkansas, Nebraska, and Ohio. The main difference between it and also the already-existing user-based IntelliDrive is it also records policyholder mileage along with driving behavior.
Schnitzer said during the last 5 years the company has grown paying for strategic technology initiatives by 50%.
“…We're now using virtual claim handling capabilities on the significant most of both auto appraisals and wind/hail claims without resorting to inspection with a Travelers claim professional,” he said. “…Quite simply, we're delivering great experiences for the customers along with a more effective outcome for the shareholders.”
To and Morrenhof noted in their article that AI technology won’t replace humans – it'll “empower them through decision support and streamlined workflow” and noted that it’s an excellent tool for claims fraud mitigation and investigations.
“There are lots of positives to AI-driven solutions in fraud and subrogation. Many insurers both in personal lines and commercial lines are achieving STP [straight-through processing] rates north of 70%. In SIU [special investigations units], insurers are recognizing an overall total rise in their proven fraud rate of 1-2% . As well as in claims recovery, best-in-class subrogation solutions are increasing net recoveries by as much as 20% each year, resulting in a reduction in loss ratios up to 2%.”
