Future of Claims image  courtesy of EY

Just because technology allows insurers to automate the entire claims process doesn’t mean it’s the right approach for every claim. In fact why not ask someone who should know-

Olivier Baudoux is senior vice president of global product strategy and artificial intelligence for Mitchell’s Auto Physical Damage division. He says -

"The idea that, today, fully automated appraisals without human intervention can be accurately produced is fiction."

Baudoux continues: -

"To understand the trajectory of claims automation, we must first address misperceptions about the current state of touchless estimates. The idea that, today, fully automated appraisals without human intervention can be accurately produced is fiction. In many ways, it’s analogous to recent exaggerated assertions about the prowess of self-driving vehicles. While technology advancements have led to increased automation, the need for human oversight and intervention remains necessary. Furthermore, the infrastructure and regulation required to support a completely automated end-to-end system are still evolving.

Why Touchless Estimates Are the Holy Grail

To stay competitive and meet increasing consumer demand for better response times and self-service capabilities, insurance carriers are on a quest for the Holy Grail: touchless estimates. Why? An automated appraisal process is expected to deliver:

• Improved Efficiency and Appraiser Productivity
• Greater Estimate Consistency
• Better Cycle Times Over Traditional Methods
• Higher Customer Satisfaction

For it to be successful, though, carriers must consider their own unique workflow requirements when introducing automation. A one size fits all approach may work for field estimating, but a scalable, automated appraisal solution requires an open, flexible and cloud-based ecosystem that can easily integrate with other critical business applications. Open ecosystems, like the one powering Mitchell Intelligent Estimating, give insurers the ability to streamline operations and leverage best-in-class technologies that continually reduce the reliance on human effort as they build out an automated claims experience."

The EY articles builds on this and well worth reading the full article in the link at bottom of this article. The summary is this one.

• More insurers are seeking to optimize claims performance by balancing process automation with access to human help when customers need it.
• Straight-through processing reduces costs and accelerates payments, but personal, right-touch service can boost loyalty for highly emotional claims.
• The first step in redesigning claims processes is to the map the customer journey and understand how claims fit into broader customer experiences.

The straight through processing image beloved of technology vendors is simple: - the one pictured above. It just avoids the reality of third party claims, personal injury, liability and subrogation, recoveries and, of course, fraud both professional and opportunistic. 

Never mind the fact that applying AI to analyse photos and images of vehicle damage, create an estimate of repair time and costs for accurate reserving and managing the process of getting the vehicle back on the road is indeed fiction. 

Yiou still need experience engineering professionals, fraud investigators who know that just as technology and automation is a boon to insurers and vehicle repairers so too is it a boon to professional fraudsters who can use the very same technology to seek out the weaknesses in an insurers and vehicle repair networks systems and software.

Not to say that every six months the Holy Grail gets closer. Baudoux explains how: -

Trends Driving Higher Efficiency

The evolution from onsite inspections to touchless claims is marked by three trends, or levels of automation. These levels are not sequential. Instead, they are being developed and deployed in parallel as the artificial intelligence (AI) used to automate estimates becomes more mature.

Virtual Estimating

Virtual estimating dramatically increases efficiency and demonstrates the power of using photo capture to produce accurate assessments. As mentioned, this method of inspection relies on images and videos. Although virtual estimating puts photos at the center of the appraiser’s workflow, it’s primarily human and not machine driven.

• Customers start the claims process on their mobile devices, and are guided through how to capture and share photos and video of the damage.
• AI is leveraged to categorize and organize the imported images as well as to detect and highlight sections of the vehicle with damage.
• An application essentially provides appraisers with a 360 degree view of the damage, allowing them to write an initial estimate as if they were at the vehicle instead of at a remote location.

Prior to COVID-19, virtual estimating was used for low severity claims. Compared to other inspection methods, it accounted for just 6% of all estimates written in the United States last year and 4% in Canada. Following the start of the pandemic, those percentages quickly jumped to 13%.

Field appraisers performing onsite estimates can typically complete three to four per day when factoring in administrative tasks and travel time. Working from images, however, allows the appraiser to finish approximately 15 to 20 estimates per day.

Guided Estimating

The next step in the progression from handwritten estimates to machine-written estimates involves human-machine collaboration. AI guides the appraiser through each decision point. The goal of guided estimating is to put more power in the appraiser’s hands while leveraging the AI for useful recommendations.

At this level of automation, the machine is becoming much more involved in the process. Although the appraisers remain in control, the information and decisions presented to them are powered by AI with each sequential line of the estimate being suggested for the appraiser’s consideration. Guided estimating goes beyond virtual estimating by:

• Driving a Set of AI Predictions That Recognize the Damage to Components
• Turning These Predictions Into Repair Line Recommendations for the Appraiser
• Surfacing Supporting Evidence and Empowering the Appraiser to Edit and Incorporate His or Her Own Expertise
• Supporting a Continuous Feedback Loop That Allows Appraisers’ Decisions to Educate the AI

Automated Estimating

The final level of automation is, of course, fully automated or touchless estimating—including all operations, parts selections and pricing generated by the AI using vehicle and claims data. Here’s how this predominantly machine-driven process works:

• Like virtual and guided estimating, touchless estimates start with capturing claim details and vehicle content.
• This content is then analyzed using computer vision and other machine-learning algorithms to translate into component-level estimate lines.
• The AI then pre-populates the entire estimate for the appraiser to review and approve.

By 2025, at least 40% of total loss claims will be settled within a couple of days instead of weeks.

Beyond estimate automation, additional data integration will help carriers further streamline the claims process. Ultimately, claims have the potential to be settled even faster by incorporating telematics incident reports, loan payoff amounts, titled/registered owner information, and taxes and fees into the workflow. In fact, Bill Brower of LexisNexis Risk Solutions predicts that “by 2025 at least 40% of total loss claims will be settled within a couple of days instead of weeks.”

Partnering to Deliver the Best Outcome

The transformation from field appraisals to touchless claims isn’t done in a vacuum or entirely by a machine, for that matter. Appraisers are key to developing and improving the process. By introducing automation gradually, they can build their confidence in the AI while simultaneously perfecting the results through their ongoing feedback. Creating an experience where guidance is clear, actionable and, most importantly, transparent helps build trust between humans and machines.

Processes driven by human-machine collaboration can lead to vast improvements in speed and accuracy, but they take time. That doesn’t mean that carriers shouldn’t get started today—they should. When it comes to meeting consumer needs and staying competitive, the question isn’t whether or not to automate appraisals. It’s which partner has the experience and expertise to help you achieve your goals by best supporting the evolution of your organization’s claims process.

Partnering can include the software like Tractable, Shift and Friss, the no code claims platforms like RightIndem, 360Siteview and Snapsheet, the solutions providers like Mitchells and LexisNexis.

Just get the GoToMarket model and strategy right and EY provides a practical roadmap for that.