Why and How Insurance companies can Digitize Claims Customer Journey

Two major disruptions, the digital revolution and the Internet of Things (IoT), offer exciting possibilities for companies that are bold and ready to leverage digital technologies to develop new products and services. Indeed, the evolution of digital technologies has already disrupted many industries that were unprepared or simply did not see how new technologies and changing consumer behavior would impact their once-dominant business models.

Other industries like Banking, Retail etc. leveraging digital channels and technologies and transforming their business processes more customer centric and elevating customer expectations. Insurance industry is in the middle of a radical and digitally infused shake-up and insurance companies must integrate digital technologies into their operations to keep pace and improve end to end customer experience.

Traditional insurance companies already facing strong competition from insurers with pure digital business models, such as Lemonade in the United states, Nexible in Europe are using digital applications like Chat-bot for their customers to buy a policy or AI enabled claim settlement process for simple, fast and better experience whereas processes of traditional insurance companies are often frustrating, time consuming and complex. Traditional Property & Casualty insurance companies like auto insurance, home insurance etc. must quickly integrate digital technologies into their operations.

For the property and casualty (P&C) industry, digitizing the claims function holds tremendous potential and become a customer-centric, digitally enabled organization with focus of improving customer experience, efficiency, and effectiveness in claim function.

If someone has an auto accident, they will often touch their insurance company at least five to seven times to handle one insurance claim starting from claim initiation (First notification of loss) to claim settlement. Often times those five to seven touch points are with five or seven different areas of claim function with an insurance company.

Let’s see how a simple insurance claim provides multiple chances to build customer satisfaction.

Typical customer journey of auto insurance claim looks like

Typical claims process has four stages First Notification of Loss(FNOL), Claims Management, Loss Assessment & Repair, Claim Settlement. Person’s X journey through out the process is sad and unhappy, primary reasons for the unhappiness is process is time consuming, lack of transparency, longer claim processing and settlement time and no proper assistance provided when required.

There was one another scenario, where Karthik faced issue with flat tire however his Insurance carrier enabled him to raise the request instantly through mobile app and in next 45 min flat tire is replaced and Karthik drove back his home happily. His Insurance carrier created a lasting impression and he is with the same insurance carrier from past four years.

Insurance companies can start pursuing End-to-End digitization of claim customer journey by integrating AI/ML, Digital technologies & claims ecosystem to improve customer experience, Efficiency and effectiveness of claim function.

Traditional claim process starts from First Notification of loss(FNOL) however when claims function is digitized, claims function starts one step before First Notification of loss and enables insurance companies to prevent the occurrence of certain types of claims and reduce claims expenses. In addition to working actively with customers to prevent claims, insurers should provide services that add value for and delight customers and draw on customer feedback to continually improve service offerings, usability, and performance. Insurers should also aim to adopt a faster, analytics-driven approach to claims handling and fully automate the claims handling processes for clear and simple cases. For example, Lemonade has worked to redefine the customer experience with an innovative, Chat bot-based FNOL system that creates automated claims payouts within seconds.

Claim Prevention:

Certain types of claims can be prevented by leveraging the data gathered from other incidents happened in particular geography and alert policy holders in that geography to be cautious and avoid similar incidents. Telematics is another possible use case to identify the driving patterns and vehicle condition using IOT’s to provide proactive notifications to avoid claims.

Digital First Notification of Loss:

Automated FNOL through telematics — Claim can be initiated by identifying the incident occurred from the data received from IOT devices and reach out to policy holder proactively to provide required support instead policy holder initiate claims.

Chatbot/Conversation AI based FNOL — Enabling policy holder to initiate claim at the point of incident through intuitive Chatbot just simply answering few questions and complete the process in no time instead of calling customer care for the support which is time consuming process. Chatbot based FNOL will also enable Insurance companies to provide additional support to the policy holder like providing taxi or towing service, Medical support or Police support etc. to create ever lasting impression in customer minds by being with them when they needed you most.

Automated claims Management:

Intelligent case management is the best use case that can be implemented by Insurance companies. After FNOL and throughout the process, handlers typically evaluate claims cases manually to decide on appropriate next steps, such as scheduling an adjuster appointment or providing information about direct repair programs with local repair shops. Supporting the entire journey with automated, intelligent case management is critical to establishing truly end-to-end digital customer journeys. With the help of AI, a digital evaluation automatically identifies the best next step in a specific customer journey, reduces manual touch points, and significantly speeds up the claims process. For example, in a simple claim, this technology can allow a customer to schedule an appointment with a repair shop as part of the FNOL. Enriching these journeys help customers to follow the most satisfying and efficient paths in their claims journeys.

AI can help infer unknown characteristics of a claim, such as the likelihood of fraud, total loss, or litigation, to speed up its downstream handling.

AI algorithms can help segment claims cases by complexity using factual and predicted claims characteristics. Based on this segmentation, claims can be assigned to specific downstream handling processes — either to digital self-service journeys (such as selecting a direct repair shop in self-service) or a claims handler for more complex cases (for example, with high litigation risk).

Automated loss assessment and Repair:

Automated damage-value estimation based on picture recognition or sensor data in combination

with invoice data using Image recognition & AI.

Automated Settlement:

Real-time invoice analysis for correction potential based on past invoices and spare-parts catalogs and instant & Digital payments to service centers.

So where to start? Insurers should adopt a value driven approach & customer-centric mind-set and undertake an end-to-end reassessment of their customer interactions starting with the most relevant customer journeys.

When we map the major pains with respect the do-ability and impact that creates on policy holder, Insurance companies can start with digitization of first Notification of loss process to address the high impact pains that can be relatively easy to implement and integrate with multiple area of the claim functions.

Due to complexity of implementation and requirement for huge history of collisions or accidents or breakdowns happened to leverage AI/ML models to determine the patterns of the incidents real time and initiate FNOL, Telematics based first notification of loss can be the futuristic state of the digitization.

Chatbot or conversation AI based FNOL is more relevant current technology trends and less dependency on the past history of collisions or accidents or breakdowns. With the current NLP models available, development of the Chatbot and implementation can be done quickly to make FNOL process quick and seamless.

Why Chatbot is preferable than mobile app?

Let’s go through the basic prototype of the Chatbot for FNOL

Each stage (Prevention, FNOL, Management, Assessment & Settlement) of the claims function can be built as loosely coupled micro services and can be integrated easily as each function is digitized.