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How COVID-19 is Accelerating Auto Claims Automation

A LexisNexis report illustrates that the secret to moving toward a touchless claims process may be through a hybrid model—and that insurance carriers can do more to turn virtual claims processing into a competitive advantage. 
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how covid-19 is accelerating auto claims automation

The COVID-19 pandemic forced auto insurance carriers to adapt virtual claims processes at an accelerated rate to ensure customer satisfaction. And while less than 15% of auto insurance claims were handled virtually before the pandemic, this increased to 100% in March 2020 but subsequently reduced to just over 60% a year later, according to the 2021 LexisNexis® Risk Solutions biannual 2021 Future of Claims Report.

The report, released earlier this week, illustrates that the secret to moving toward a touchless claims process may be through offering a hybrid model of self-service claims with access to a personal touch when consumers feel they need it. However, the report also notes that insurance carriers can do more to help move the industry along and turn virtual claims processing into a competitive advantage.

"While the past year has proven to be a great awakening for claims automation, we're now at a crossroad, and what will set insurers apart is a complete claims handling digital transformation and move from traditional to touchless," said Bill Brower, vice president, claims, LexisNexis Risk Solutions. "As we look ahead to 2025, the industry should be optimistic that we will soon see a day when the vast majority of claims will be processed virtually. But it will take hard work to get there."

As part of the analysis, LexisNexis Risk Solutions interviewed 25 auto insurance claims executives and surveyed 1,750 auto insurance policyholders, of which 1,000 filed a claim within the last two years.

Key highlights include:

  • Comfort and satisfaction with the claims automation process is increasing and consumers are now seeing the advantages of self-service claims, with 62% saying it's more convenient to submit a claim any time or anywhere, and 55% saying it enables faster claims settlement.
  • Younger, more technology-savvy generations are adopting faster as 68% of millennials and 53% of Generation Xers say that the pandemic has made them open to filing a claim online.
  • Mastering a hybrid model is the sweet spot for claims processing as it provides the benefits of automated solutions combined with access to help from a claims representative when consumers feel they need it, which helps avoid frustration.
  • Automation has shifted from driving efficiency to driving decisions. Carriers are now leveraging the benefits of artificial intelligence and machine learning to enhance the processes for damage assessments, segmentation, estimations and payouts, in addition to intake support.

While consumer satisfaction with virtual claims processes remains high at 92%, those who were “very satisfied" dropped 11% since 2019, likely driven by increased consumer expectations for ease of use, according to the report.

To improve the customer experience with self-service claims, the study reports that timeliness, reducing the number of touchpoints, and utilizing features like data prefill are the areas of focus for carriers.

Further, the report highlighted data privacy concerns as considerable for clients, with 61% of consumers expressing concern about the security of their personal information. And while carriers understand the importance of cybersecurity, only 1 in 10 are using two-factor identification, which may suggest a struggle to address cybersecurity in claims processes.

"Overall, consumers are willing to move to more self-service claims options as long as the experience continues to evolve to meet their expectations and deliver the benefits of convenience and security," Brower said. "Whether claims automation will become the new normal is still up for debate, but this past year has proven to be a powerful proof point for the viability of automated claims processing, both in terms of insurer capabilities and consumer receptivity. Now is the time for insurers to continue to develop and refine their claims handling digital transformation before it's too late."

Olivia Overman is IA content editor.