Technology’s Promise and Drawbacks Among Top Claims Stories for 2019

Technology — both its promise and its alleged abuse — was a key component of the most important news stories for claims professionals in 2019.

Several insurers introduced new technical innovations to their claims processes during the year. At the InsureTech Connect conference in Las Vegas in September, Travelers lauded a partnership that it formed with San Francisco-based insurtech startup Hover to produce photo estimates for property damage claims. Hover’s technology allows adjusters to obtain exact dimensions of buildings by taking ground-level photographs from various angles.

“It takes two hours to measure a house,” Travelers Senior Vice President Patrick Gee said during the conference. “We can get it done in five minutes.”

Later in the year, Hover announced that it had contracted with CoreLogic, an Irvine, California-based data analytics firm that works with insurance carriers and real estate agents. The company said in June that it now counts six of the 10 top property and casualty insurers among its customers.

Insurance carriers are working together with hopes of bringing about another technological innovation using block chain, a technology that allows multiple parties to securely store data. The RiskStream Collaborative, a nonprofit organization affiliated with the insurance Institutes, completed production testing of an application called Canopy that will create a single first notice of loss that can store data to be used by all parties involved in a claim.

RiskStream President Chris McDaniel said the product will allow claims adjusters to separately fill out all of the data fields required to create an FNOL together. No changes can be made without permission from all of the parties involved.

Mitchell International made its own tech news. In September, the company announced that it teamed up with Qualcomm Technologies to develop an augmented reality “smart glasses” tool that gives collision repair technicians hands-free access to up-to-date vehicle repair procedures.

Mitchell also announced the launch of an auto-damage claims estimates that uses artificial intelligence provided by Google Cloud. The Intelligent Estimating solution is provides detailed auto physical damage estimates based on photos of vehicle damage.

Insurance regulators, however, are warning insurers not to forget about the value of a good old-fashioned field inspection.

In October, Oregon Insurance Commissioner Andrew Stolfi issued a draft bulletin advising carriers that his office has received complaints from consumers that insurers were making settlement offers based on photo estimates and refusing to dispatch claims adjusters to make in-person inspections.

“Insurers must provide an in-person adjuster in a reasonable amount of time when requested by the claimant,” Stolfi said in the draft bulletin. “Insurers may not deny the claimant’s request for an in-person adjuster because a claimant initially elected to use a virtual system.”

Vermont Insurance Commissioner Michael Pieciak issued a similar bulletin in early December. He said that his office had also received complaints by policyholders unreasonable delays in the settlement of claims or inadequate settlement offers because insurers relying on “virtual adjustments.”

Another important story during the year was the progress workers’ compensation insurers have made in reducing unnecessary opioid use by injured workers.

Carriers have recognized for years that long-term opioid use leads to longer periods of disability and lower return-to-work rates. Determined to reduce usage of the addictive painkillers, Mitchell International partnered with Utah’s WCG Mutual Insurance Co. to flag any opioid prescriptions that lasted longer than 14 days. After 18 months, the number of opioid prescriptions dropped by 56 percent, Mitchell and WCF concluded in a peer-reviewed study.

Employers Insurance Co. also made progress in reducing opioid use by reminding physicians that treatment guidelines don’t recommend opioids for chronic pain. In 2017 the carrier started requiring claims managers to intervene in every claim where opioids were used for more than 30 days. Dr. Dwight Robertson, medical director for Employers, told the Claims Journal that the carrier has had no new claims in which opioids have been used for more than 30 days since starting the program. Although the carrier still has legacy claims where it is trying to wean injured workers off the drugs, Robertson said Employers has succeeded in not creating any new addicts.

Lloyds of London stepped into the claims news cycle with a story that had nothing to do with the well-publicized allegations of boozy and boorish behavior of its executives.

Claims Journal reported that at least four athletes have filed lawsuits against Lloyds charging that the syndicates changes the terms of disability policies they had purchased after they filed claims.

The most recent was filed Jacksonville Jaguars linebacker Jacob W. Ryan. He alleges in a lawsuit filed in federal court in Los Angeles that he paid $149,000 for an athlete’s “loss-of-value” insurance policy from Lloyd’s in case he got injured while in training while working as a free agent.

He started training with the Green Bay Packers in July 2018 after receiving a certificate of conditional coverage from a Lloyd’s agent. But after he injured his right knee during drills , Lloyd’s changed the terms to exclude any injury to his right knee, the suit alleges.

Similar lawsuits have been filed by former University of Arkansas running back Rawleigh Williams III, former Jaguars wide receiver Marquise Lee and former University of Southern California Trojans linebacker Morgan Breslin.

Criminal behavior by the founder of a well-known independent adjusting firm also made news in 2019. Michael Allen Worley, founder of Worley Claims Services in Louisiana, pleaded guilty in November to bank and wire fraud charges. Federal prosecutors say Worley swindled $29 million from banks and private equity funds by lying about the value of his assets and underreporting the amount of his debts.

Worley had not yet been sentenced as of Monday.

About the photo: Photo illustration provided by Mitchell International.