Virtual Claims: The Future of Claims Handling

The year is 2020 and you have just had an accident. While proceeding through an intersection, another vehicle turned in front of you. Prior to the impact even occurring, advanced airbag deployment technology had enveloped you and your occupants in a protective cushion of safety.

The black box tucked deep inside your engine compartment had captured all activity up to, and including the accident. Your vehicle speed was 25 miles per hour, your braking reaction time was three-tenths of a second, the car stereo was operating at 35 decibels, and the G-forces exerted based upon the deformation of the metal and airbag deployment was not indicative of likely injuries among the general population.

At the scene of the crash, you click the smart phone icon for your insurer and populate the screen with the insurance policy details that can be shared with law enforcement and the other party. Within seconds, you are sharing face time with the first notice of loss department, which walks through a series of prompts to have you, as the insured, snap photos of the accident scene, your vehicle and the claimant vehicle — of which is transmitted electronically for processing.

First notice of loss leverages ClaimIQ to assess liability at 70 percent against the vehicle making the left turn and 30 percent against you. The estimate is completed virtually and transmitted to you and a body shop of your choosing. The funds are electronically wired to your bank account and will be immediately available to repair your damaged vehicle.

This is the future of claims handling, where technology will be leveraged to provide an instantaneous, virtual and seamless claims process.

‘The Jetson’s’

While it may seem reminiscent of The Jetson’s, the reality is that the vision created in the 1962 cartoon series isn’t that far off.

At no time in history has technology advanced faster than today, and it is doing so at an exponential clip. Consider that the first generation iPhone was released a mere six years ago, and is now in its sixth generation. Then consider the advancements of virtual peer-to-peer communication. Remember how far off this seemed when Marty McFly was fired by his boss in a virtual environment in “Back to the Future Part II,” a movie filmed in 1989 but set in 2015? Today, it seems like par for the course.

But it will not only be on the first-party side that claims takes on a virtual look. Rather, technology will have vast implications on the entire investigative process.

Long gone are the days of feet pounding the pavement looking for clues, as investigations become far more virtual with myriad data at our fingertips.

In this environment, the key to success will lie in the triage process, whereby predictive analytics can accurately predict outcomes in claims within a specific degree of probability. Consider the bodily injury (BI) claim presented by the claimant in the earlier accident who sought the representation of an attorney.

Early scoring of a variety of data, such as that extracted from the insured black box, will yield any number of clues as to the likelihood of an injury being sustained.

Next, consider the benefit of attorney and provider scoring based upon historical data patterns and public records, such as prior or pending malpractice suits or other disciplinary action.

Data can further be leveraged to better validate or refute the claim being presented.

Today, we are often limited by the index bureau to gaining knowledge of prior claims. While adjusters may suspect causation issues, there is often not the evidence to prove their existence. By harvesting more data, the outcome of cases will be based upon objective fact versus subjectivity.

What if the adjuster had information on not only prior claims but all prior medical visits and this information yielded a history of low back pain, similar to what was currently being alleged? What if there were prior surgeries that were not being disclosed? What if the adjuster was presented with a BI dossier that contained link analysis information about ex-spouses, neighbors or acquaintances who could be contacted during the investigation? Perhaps there are criminal records that may call into question the credibility of the party claiming injury. What if scientific crash test data on real human subjects was not indicative of an injury being sustained in this particular type of crash?

While some of this data is currently available, it can be time-consuming to obtain and aggregate. With the continuing evolution of technology, the key to success lies in compiling all of the pertinent data, from auto physical damage to personal injury, in one easy-to-use portal that provides the adjuster with the framework for effective investigation, evaluation and negotiation.

Consider that today a mere 3 percent of claims are closed with a comparative negligence assessment, and then consider all of the other aforementioned aspects of the claim investigation that may be overlooked. This can result in some significant leakage.

Not Far Off

The day is not that far off when a claim will arrive at First Notice of Loss and receive an immediate recommendation for an appropriate handling path, such as low touch or full investigation. Add to this the no-touch path, whereby claims will simply be processed without a person ever touching them. While this happens today in the world of towing and glass, there are an estimated 30 percent to 40 percent of other claims that could ultimately fall into this process, as well.

As technology continues to evolve, consider the end-to-end solutions that can be used to virtually estimate automobiles and provide robust data to validate or refute presented injuries, and consider how all of this data can be tied together in a meaningful manner.

It really wasn’t that long ago when adjusters were armed with nothing more than a Dictaphone and a Polaroid camera. While significant information can be gained with feet on the street, it is difficult to argue that arming adjusters with facts won’t be even more effective. As we supplant subjectivity with objective findings, the success of outcomes will serve to benefit policyholders covered by carriers that recognize the benefits that technology can provide.