Hot Technology, Scorching Results

While claims departments strive to provide the best service possible, unfortunately their tools are oftentimes tantamount to using a hammer instead of a nail gun. A reliance on old manual processes prevents their ability to truly transform the claims customer experience to one worthy of being noted as world class. Technologies such as the iPad and smartphones and their associated software provide a means for achieving an excellent service experience. Use of these powerful technologies can improve cycle times from days to hours to minutes.

Imagine a field adjuster arrives at an insured’s location and within moments is collecting photos or video of the damaged property. Without breaking a sweat, the technology application has already measured the room and located the damage within a virtual diagram. A program writes a simple estimate based on the input.

When you consider the number of estimates that are run through software systems such as Xactimate or MSB, it is probable that the historical information can be used to create a knowledge database based on zip codes of the regularly needed repairs to drywall, flooring, and roofing. Thus, a need for the adjuster to create an estimate will no longer exist, as it will be completed by the system based on a combination of the actual damage, measurements, and prior repairs of similar damages.

Much like an electronic valuation system in bodily injury evaluations, which relies on historical data to recommend settlement ranges, a similar process can be implemented and improved upon for property damage. This information is then transmitted directly to the claims processor, and, presto, a credit is deposited in the policyholder’s account. The field adjuster swipes a plastic card through a device, and the insured has his claims payment. The claim is closed and the customer relates his experience to his neighbors, who then change their policies over to the carrier that provides this world-class service.

Large carriers with budget capital will be able to quickly exploit this type of technology and raise the bar, thus leaving regional and small carriers to question their ability to keep up. Interestingly, many smaller claims operations have moved to an independent field adjuster model to handle their field claims investigation needs. These carriers are at the mercy of their independent partners for delivering speed of the investigations and, ultimately, service to the customer—one of the most critical services they can provide.

Herein lies the advantage for independent firms that utilize new technology to differentiate themselves from their competitors. For example, those employing new technology, such as iPads, can provide their clients with instant information from the loss location. The technological power of the iPad and other tablets allows for instant exchange of information between the loss location and the desk adjuster. The independent adjuster can be on the phone with the claims representative while sending them photos and measurements as they speak, allowing for a more accurate and robust discussion regarding the loss. This can also lend itself to faster payment time due to the ability to receive information more quickly. Thus, the independent firms that master the use of technology and successfully collaborate with their claims department partners will be the leaders of world-class claims service in the 21st century.

Independent field adjusters already have the ability to utilize products such as XactScope, a mobile estimating application that works with an adjuster’s desktop version of Xactimate. They can capture room measurements, take photos, record voice notes, and research replacement costs all from their mobile devices. Xactware also is currently developing an app for use with the iPad. This robust tool will allow for a definitive record of the process undertaken to evaluate and write an estimate.

Therefore, field adjusters will rapidly improve the accuracy and quality of their estimates as a result of the immediate feedback they receive through using these programs. This will then offset the loss of experienced field adjusters due to retirement and allow an independent firm to continue providing outstanding service to their carrier partners without worrying about the continuing industry brain drain.

Practical Applications

In conjunction with world-class customer service, claims departments are especially concerned about control and the regulatory issues associated with claims handling. The use of emerging technology will provide better accuracy and documentation from a data mining and storage standpoint. By continually accessing and storing data associated with property claims, a benchmark can be established later to support the validity of claims payments.

The industry is under continual attack from various consumer protection groups—all alleging the industry underpays claims. Utilizing the technology of today will provide a crippling and rapid response to any myths. For instance, if a carrier writes 1,000 roof estimates within a geographic location and the estimates can be categorized by size as well as the type of repair, the data can quickly support the reasonableness of a particular estimate in the face of rogue contractors looking to increase their profits through inflated estimates. Imagine an SIU investigator having the ability to utilize this data to find patterns that aid in fighting fraud. It is clear that the use of technology in the field can directly improve many avenues of the claims process in combination with existing data mining and storage capabilities.

Another area of emerging technology available to the industry is the use of “drones” to assist in many types of claims and insurance-related inspections or investigations. Currently, several companies manufacture simple drones that cost less than $1,000. These drones can be fitted with high-definition video cameras and operated from a central location.

The most obvious use of drones would be in a catastrophe situation, where they could fly over neighborhoods ravaged by nature and stream live video back to the claims department, where loss evaluations could commence within moments following an event. A simple drone programmed with GPS coordinates could launch from a mobile CAT command center and quickly inspect hundreds of properties in a day or so, applying the same technology as a field adjuster and creating estimates in minutes. Not only do you gain a faster CAT response, you gain accurate scope measurements and a significant reduction in the number of necessary CAT adjusters.

Additionally, while companies would see improvements in accuracy and timeliness of the service, the savings associated with using a limited number of CAT adjusters onsite, and their associated expenses, would be beneficial to the bottom line.

Further utilization of drones could expand to liability claims investigations at hazardous loss sites, such as chemical or nuclear locations. A drone could easily record video at a loss site in an area unfriendly to human field adjusters, thus eliminating significant workers’ compensation exposures for the adjusting firm. Underwriting departments could utilize drones to inspect potential risk locations.

For instance, BP currently uses drones to inspect oil fields where dangerous cracks and fissures can occur in piping. This allows for more regular inspections without the risk of exposure for employees. This same principle could be applied on the underwriting side in order to better rate these locations. This, in turn, would lead to better underwriting results and lower rates.

Artificial Intelligence

Finally, emerging technology will ultimately be in a position to provide a wealth of “coverage software,” which will quickly analyze thousands of claims situations and provide perfect claims decisions in moments.

The engineers at IBM have created an artificial intelligence computer system named “Watson,” which can provide a single, precise answer based on a specific clue. In 2011, Watson was on display to the world when it defeated the top two contestants on the Jeopardy! game show, proving the amazing power of next-generation artificial intelligence.

It is not a stretch of the imagination to notice the ramifications and future applications of this type of technology. Claims operations can input their specific policy forms and continually add coverage-type facts and situations in order to make coverage decisions electronically. This information could be further enhanced by adding court rulings, industry decisions, and legal opinions in order to move in the direction of a “perfect” coverage decision in all matters.

These results could be calculated in minutes and done with minimal staff, thereby allowing for improved returns on investment. Finally, with the amount of information which would be considered in making coverage decisions, it would be hard to fathom a decision being made that would not be reasonable and, thus, would not be an enhanced defense to legal challenges to coverage decisions.

The technology is available and affordable, and customers who increasingly manage their lives from smartphones will no longer accept the antiquated claims process of today where they may speak to an adjuster today, have an inspection in three days, wait two weeks for the paperwork, and then receive a paper check by the end of the month. We must discard the legacy claims handling approach of yesterday and embrace the future. Your customers count on you. Be sure to deliver the best service through the technology of today for a better tomorrow.  

Erik A. Sikorski is assistant vice president and senior claims manager for QBE FIRST Insurance Agency. He has been a CLM Fellow since 2012 and can be reached at erik.sikorski@qbefirst.com.