Through the first six months of 2008, over 100 catastrophic events have occurred in the United States, totaling in excess of $10 billion in insured losses. This count is higher than the annual totals of five of the past ten calendar years. The number of tornadoes touching down is already nearing the ten-year annual average, 2.5 million acres of land have burned in wildfires in California, and in June alone 5 million acres of land were flooded in the Midwest, breaking historic river levels and forcing the evacuation of 40,000 properties.
Hurricane activity, such as what we witnessed with Hurricanes Gustav and Ike, is increasing and seasonal forecasts are predicting higher than average occurrences. Additionally, the risk of wildfires is still high and tornadoes, hailstorms, and floods continue to wreak havoc in many parts of the country. Insurance companies from coast to coast are on high alert with storm teams constantly at the ready, but what changes have they initiated to ensure that the customer experience is a positive one in such devastating circumstances?
The answer for many is none. Insurance companies talk about improving customer service, but very little has been done over the years to change the consumer experience. For insurance companies, often the only time they face their policyholders is after a claim has occurred—the proverbial magic moment. The insurer stands toe-to-toe with the customer, yet the toolkit of the average adjuster still consists of a clipboard, pen, paper forms, tape measure and camera. However, a few early adopters are embracing new mobile tools made available through dramatic improvements to the wireless infrastructure and hardware landscape.
There are very few examples in the insurance industry of a greater need for mobile computing than a property claim. Even an automobile can be towed to a garage for an estimate, but a residential or commercial property claim must be scoped on the loss site. In the event of a catastrophic property claim, there is no greater need for a pen-based computer (tablet, slate, or PDA) and the use of mobile technologies. While laptop computers have enabled a certain degree of mobility, standing ankle deep in a flooded basement does not afford an adjuster the opportunity to pull up a table and chair and start keying in information.
Those using laptops typically capture data using pen and paper and then transcribe that data into estimating software at a later time, either in their car, back at the hotel, or when they eventually make it into the office. Tablet computers allow data entry with the use of a stylus pen, thus replacing the clipboard and giving the adjuster a truly mobile experience on site no matter what the conditions. Additionally, it reduces the need for double entry and dramatically speeds up the process.
In the aftermath of a catastrophe, insurance companies need to look for every available opportunity to speed up the claim process to get their policyholders back on their feet. Eliminating double entry from the transcription of notes saves time and reduces errors from adjusters who have difficulty recalling particulars of multiple claims and reading their own handwriting. Additional tools embedded in new software applications, such as handwriting and voice recognition, increase adjuster productivity even more by allowing more robust descriptions of the loss.
Building an estimate on site not only helps the adjuster close claims faster, it also allows policyholders to see how data is captured and integrated into full-scale models of their residences or businesses right before their eyes. In a typical claims adjusting scenario using a pen and paper toolkit, the adjuster obtains as much information as possible through observation and Q&A with the claimant. Then, from the policyholder’s perspective, the data enters a black hole and magically reappears as a finalized estimate. Conversely, with software applications and mobile hardware now available in the market, the impression the policyholder is left with is that the insurance company not only is a leading edge organization, but one that is harnessing every available tool to ensure that claims are settled as quickly as possible.
Through the use of Bluetooth wireless technology, estimating applications can now capture measurements using laser range finders that automatically populate the electronic estimate. Try dragging a measuring tape or measurement wheel through a flooded property rife with bio hazards and you’ll see the advantage of a laser measuring tool. Even digital cameras with Bluetooth technology to automatically add photographs of the loss site to the electronic estimate are now available. A traditional digital camera also affords a quick means of populating the estimate by simply sliding the camera memory stick into the computer for transfer. Thankfully, the days are gone where an adjuster had to scrawl minute notes in the marginal white space on the back of a Polaroid picture.
The use of Wi-Fi, or cellular networks with air cards, allows data to be transferred to additional parties wirelessly in real time. Head office managers, adjusters and contractors can be alerted immediately to a new claim scope and can review the details from any location. In times of severe catastrophic events, like Hurricane Katrina, cellular towers are rendered useless, but satellite feeds can be made available to transfer data—much like FEMA set up on frigates brought into New Orleans to house claims workers.
These mobile software applications also have a back-end communications hub and collaborative Web portal which include a data warehouse and analytics engine. This Web-based technology allows for claim notification by text over cell phones, and allows multiple parties in remote locations to work on a single claim in real time while the adjuster is still on site. With this kind of collaboration, a true “once and done” claims ecosystem is created. Since traveling to and from a loss site in a catastrophic area can be nearly impossible considering the chaos created by the event, the need to complete the claim in one shot is paramount.
Most traditional desktop software available to insurance companies and claims adjusters operates in a client server environment, which means the software needs to be set up at the insurance company site with individual copies of it sent by disk to each user. However, with the advancements being made to mobile tool technology, Software as a Service (SaaS) applications are available to insurers, adjusters and contractors.
With SaaS applications, companies pay per transaction rather than speculate on how many catastrophes will occur in a year and how many licenses need to be purchased. Besides being cost effective, the other advantage of using hosted software is that all updates are disseminated frequently over the Web rather than periodically by disk. This allows the application to undergo constant enhancements, and guarantees that every participant has the same version at the same time without having IT departments manage each upgrade and badger the users to stay current. Catastrophes strike whenever and wherever, and companies need to know that their claims personnel are working from the same playbook.
The dramatic increase in storm activity over the past five years does not mean the insurance industry needs to reinvent its delivery process. Instead, it can look to Web-based service solutions. SaaS is growing at twice the rate of traditionally licensed software. All industries, including the insurance industry (which historically has been the laggard among the four financial pillars in terms of technology), have the opportunity to embrace Web-based, open architecture claims software. Thus, the need to rebuild outdated legacy systems can be bypassed.
With the ever-increasing availability of mobile tools and a growing wireless infrastructure, it benefits the insurance industry to embrace these tools to improve their own claims process. Lowering the rate of return visits, reducing the time it takes to close a claim, and allowing adjusters to complete more work in less time are all examples of how mobility is advancing the way catastrophes are being handled in the United States. In this same breath, many insurance companies promote the need to increase face time with their customers, especially during a catastrophe when policyholders are in their most critical moment of need. The impact of utilizing the latest in technology can be profound in terms of a policyholder’s confidence in the adjuster, insurance company and overall estimating process. Confidence in this process leads to a quicker settlement with the policyholder. Also, a stronger sense of trust dealing with contractors when detailed estimates are created showing all the necessary steps to repair damage. The quicker the settlement, the lower the indemnity payments will be. The faster the insurance company and contractor can get to work repairing the claim, the less likely further damage will be caused by standing water or mold.
The impact to the insurance industry, however, expands beyond just face-to-face customer satisfaction. The experience of insurance companies and independent adjusters utilizing mobile technologies in catastrophic events has improved greatly due to these new advancements. Settlement times are being reduced by 60%, the need to revisit sites is decreasing from 40% to 5% and, perhaps most importantly, the number of claims done in the first visit has risen to over 50%. Finally, companies are actually able to measure the improvements that being mobile affords their team. Some have stated they only need their storm teams out for half the time previously deemed necessary when using pen and paper methods.
With catastrophic events increasing their pace, anxiety levels in the insurance industry are at an all time high. Everyone—adjusters, claims managers, company CEOs—is looking for solutions to speed up the claims process, mitigate indemnity and better serve customers. With the advancements in software and hardware providers, mobile computing and Web-based solutions are taking hold to ensure a happier customer and a lower claims cost—the perfect storm.
James R. Swayze is the chief executive officer of Automated Benefits Corp., the parent company of Symbility Solutions Inc., a provider of mobile claims estimation software. Mr. Swayze has over 20 years experience within the global insurance industry.