Personal Lines Insurance Is Getting More Personal
January 2012
The insurance industry has not
been noted for its cutting-edge use of technology, for putting
information in the hands of consumers, or for creatively dealing
with the demands of regulations. Things seem to be changing and,
like the Titanic, progress has been slow, until suddenly, a new
path is revealed. Finally, the insurance industry is learning
how to leverage technology to make the consumers' experience
individualized and more personal, while at the same time
reducing administrative tasks. The personal side of customer
service is being better served by leveraging the emotionless
logic of technology.
By
Elise Farnham
Illumine
Consulting
This change in direction has occurred slowly—not only because
of the legacy systems hanging like millstones around the necks
of personal lines insurers but also because of the industry's
nature to be conservative and risk averse. Insurers have been
watchful, however, and have learned from mainstream business
that consumer empowerment translates to increased revenue, more
rapid development of responsive products to meet changing
consumer needs, and cost savings by allowing customers to make
inquiries, post changes, and make purchases online. In the midst
of a still soft and highly competitive market, these changes can
translate to increased profitability despite the challenges.
Claim Reporting and Status Information
Some personal lines insurers have begun to allow insureds to
create their own password-protected profiles in order to view
their coverage and make changes as needed. This allows claim
representatives to track transactions for investigation purposes
and reduces the opportunity for alleged misunderstanding on the
part of the insured as to the extent of coverage that was
purchased.
Providing status information online puts a stop to endless
phone tag and voicemail "conversations" trying to keep the
insureds and claimants up to date on activities that have been
undertaken, such as inspections, payments, etc. Some systems
even allow "alerts" to insureds notifying them via smartphone
when an activity has been logged so that progress can be seen
without the need for logging in to an Internet site to check on
what is happening.
Digital Payments
Insurers are moving toward funded cash cards and direct
deposit for payment of losses. The claim representative must
still review the merits of each case in order to release funds;
however, the insured has more immediate use of the
funds—particularly important when catastrophic events have
occurred.
Fraud Prevention
Regulators and insurers are placing more and more emphasis on
fraud prevention. Using predictive analytics can give insight to
the adjuster when undertaking the investigation of a claim.
Technology systems now allow the first report of loss to be
analyzed for these "predictors" and, if exceptions are noted,
suspicious claims are immediately reported to a special
investigative team. This process saves the adjuster time, which
can be used to complete the investigation of the civil aspects
of the claim, while allowing the criminal investigation to begin
more quickly and perhaps with more precision.
Disappearing Deductibles and Other Personal Touches
Some insurers have instituted programs to reduce the
insured's deductible as a reward for not making claims. This
conceivably will remove the need for any negotiation with the
insured or repair contractor to "cover the deductible," allowing
all parties to focus on the damages, not the insured's portion
of the loss. Since most insureds don't have a fund created for
the eventual payout of a deductible, frequently they don't have
the funds available when needed.
Developing automatic arrangements for rental replacements,
temporary housing, etc., also relieves the adjuster of these
tasks while better serving the needs of the consumer.
The Future for Claim Representatives
Claim professionals often complain of being bogged down by
meaningless administrative tasks. Making the claim process more
personal for insureds and claimants should relieve the adjuster
of many mundane tasks that can be more effectively handled by
judicious use of technological advances. This will allow claim
representatives to focus their time on the more critical aspects
of their jobs, such as better and more complete investigations,
more careful analysis of coverage issues, and more time spent in
negotiation and resolution and less time in providing status
updates.
This will challenge claim professionals to focus on the
important aspects of their jobs, such as damage assessment, the
legal environment, the intent of coverage, and the development
of interpersonal skills to enhance the experience of the insured
when a claim is made. With increased use of the "impersonal"
Internet by insureds, each personal contact becomes more
important in shaping the relationship between the insurer and
the insured.
Who knows? Maybe improvements in delivering the promise of
the insurance contract will lead to an improved reputation for
the industry. Imagine that—from the claims department!
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