With top automation concerns involving lack of human interaction, LexisNexis Risk Solutions recommends carriers incorporate options to interact with a real person throughout the automated process
LexisNexis Risk Solutions released its 2019 “Future of Claims Report” revealing strong alignment between insurance carrier practices and consumer desires bringing opportunities to expand in automation for greater mutual benefit. With automation becoming more pervasive, insurance carriers are creating efficiencies and reducing costs, but while consumers expect their insurers to offer easy digital access to products and services, they also want a personal touch.
The second edition of the LexisNexis study sought to understand how the insurance industry is progressing in their automation journey, what consumers’ perspectives are on the automotive insurance claims process and how the two can be better aligned to improve customer experience. To do so, LexisNexis surveyed 24 senior-level auto insurance executives from the top 50 automotive insurance carriers as well as 1,755 auto insurance purchasers between the ages of 25 and 65, and the results all point to a careful balance between claims automation and empathy.
The report reveals key insights demonstrating that automotive insurance carriers are continuing to embrace virtual claims processes with 95 percent using or considering virtual handling.
- Touchless claims are also growing in popularity with 79 percent of carriers surveyed open to or considering using it; up from 42 percent 18 months ago.
- Consumers with prior claim experience exhibit rapid reduction in claims satisfaction when they have to talk with more than one person.
- One in five consumers currently prefer claims self-service options, but complain that the self-service first notice of loss (FNOL) process asks too many questions.
- Carriers already using claims automation report a reduction in touches (removing 1-4 manual touches), faster cycle times (1-15 day reduction per claim), increased employee productivity (50 percent reduction in processing cost) and lower loss adjustment expense (3-10x more cases processed per adjuster).
All of this leads to higher customer satisfaction, loyalty and promoter scores, further demonstrating that automated claims are mutually beneficial.
However, while carriers are making great use of automation, they have not significantly expanded their use across the entire claims continuum. Demand from consumers for self-service options is still fairly low and mostly tied to millennials. And there are still some challenges, as only one in five consumers prefer claims self-service options—complaining that self-service FNOL processes ask too many questions as carriers fail to fully integrate data upfront in the claims process.
“It’s encouraging that claims automation adoption is progressing and that carriers are continuing to implement and leverage automation to improve efficiency, reduce costs and remain competitive,” said Bill Brower, Vice President, Claims, LexisNexis Risk Solutions. “Yet in order for claims automation to takeoff, carriers need to integrate more data prefill solutions into the claims process so that self-service options are as easy and painless as possible for customers.”
A Path Forward for Claims Automation
When evaluating the factors that most influence customer satisfaction with the claims process, empathy emerged as the most impactful, illustrating that carriers must look for ways to integrate the human touch into automated processing. Furthermore, the study revealed that consumers are letting their fears hold them back from fully embracing self-service claims automation, especially on those customers who have not dealt with a recent claim.
The report recommends that carriers offer consumers options to access a live representative or live chat at the right time in the process and that the responses should be tailored and directed to assuaging consumer fears and promoting the customer benefits of automated processing. Integrating more data earlier in the claims process also helps make self-service options easier for customers by leaving fewer fields for them to complete, while also leading to more efficient processing.
“What’s most important from this study is that insurers need to find a balance in automation and human touch to ensure that the claims process is simple, and that the customer is not sending the same information multiple times,” said Brower. “And as a result, carriers need to find ways to have a human touch when they want to, but interact with a representative when they want and need it, while maintaining customer retention as an important metric in their evaluation of automation effectiveness moving forward.”
Overall, carriers and customers are both happy with the value automation is delivering and the benefits carriers are receiving from automation are improving the customer experience. As carriers continue to seek greater efficiency and cost reductions, they are moving toward more virtual approaches. This could prove beneficial to customers in terms of added convenience, but those customers will still want the human touch at relevant parts of the claims process in order for these advancements to truly be a win-win.
The Future of Automation
As technology advances, carriers believe that their businesses will implement enhanced automation in the next 3-5 years, with forward-leaning carriers expecting the share of their touchless claims to range from 15-95 percent as they continue to figure out how to operationalize touchless claims. The LexisNexis report also found that as automation for non-complex automotive claims continues to enhance and expand, it will make the most significant improvements to FNOL and repair estimates for customers. Estimates and investigations will also be altered significantly by artificial intelligence (AI) and advanced analytics, with forward-leaning respondents planning or considering an increase in the use of advanced analytics and AI in the next few years.
While it is clear the marketplace is moving in the direction of touchless claims, due to advancements in technology and the demands of a younger generation of customers, it is imperative that carriers balance automation with the desire for human interaction. Automation can even be used to help carriers deliver this empathy by freeing representatives to be available when a customer needs personal attention, and by providing the information needed to help representatives customize their interaction and personalize the claims process. Overall, there is desire from both carriers and consumers for a hybrid approach that leverages automation where it can be most effective and still includes opportunities for insurers to personally help customers when they want and need it.