ILC ARTICLE

AI and claims automation: the secret sauce for customer retention?


Customer retention is the not-so-hidden war taking place within the insurance sector and as technology advances, creating more opportunity for differentiation in the claims journey and customer satisfaction, the battle is only going to intensify.

In this contributed article, Paul Wishman, EIS Program Director, who has a proven track record of improving performance through innovation, discusses the value of artificial intelligence (AI) and automation in gaining the competitive advantage. 

Our acquisition of Metromile’s Enterprise Business Solutions coincided with a recent report from Accenture and a spate of LinkedIn posts from some within the insurance industry that highlighted the friction that still exists within the claims experiences – and served as a timely reminder that customer experience is the area where the greatest opportunities exist.

To help encapsulate the scale of concern, Accenture found that 31% of claimants were not fully satisfied with their home and auto insurance claims-handling experiences over the past two years. Among the top concerns were settlement speed (cited by 60%), followed by issues with the closing process (cited by 45%).

Not surprisingly, dissatisfaction with the claims experience is a primary reason customers switch insurers. According to the report, 30% of dissatisfied claimants said they had changed carriers in the past two years, and an additional 47% said they were considering it. 

Overall, unhappy consumers could represent as much as $34bn in premiums annually and as much as $170bn over the next five years.

AI

However, AI and a range of other technology solutions can now improve the claims customer experience. 

Accenture found that 79% of claims executives that were surveyed believe automation, AI, and data analytics can add value across the entire claims value chain, from flagging fraudulent claims to damage assessment and loss estimation, reserving, adjusting, processing optimisation, and subrogation.

Further, Accenture found that 65% of insurers plan to invest $10m or more in these technologies over the next three years, which spells bad news for technology laggards.

From my own experience, I can attest that AI can replace rules-based applications, which frequently require manual interventions, and introduce enormous efficiencies. 

And it makes sense to leverage AI for decision-making across the claims value chain too.

Plus, insurance carriers are inundated with structured and unstructured data. By leveraging AI and cloud-native technologies, carriers can better ingest and analyse data, making quicker and better decisions while at the same time minimising overheads and, most importantly, offering claimants an improved customer experience.

Technology

While the Accenture report focuses primarily on the impact AI can have on improving claims, many other complementary technologies also can help insurers align with the claims value chain and make sure they’re responsive to customer needs.

These opportunities include harnessing the right ecosystem of technologies to make it easier to collaborate with essential partners across the value chain, including third-party administrators, enabling more straight-through processing that liberates adjustors to focus their efforts on more complex incidents.

All of this can help improve the customer experience as well as overall satisfaction. 

But as customers increasingly seek insurance providers that offer the best service, a carrier’s interest in improving the claims experience is also a matter of healthy self-interest, and I look forward to continuing to solve root problems and demonstrate enhancements across claims operations and the customer experience.”

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