Looking at the world around us, we see that consumers are expecting self-service options that significantly reduce or eliminate the need for human interaction. Carriers are finding ways to streamline claims handling while reducing the manual work required by an adjuster, so they can focus on more important claims tasks. It is not surprising that with 95% of carriers using or considering using virtual claims processes and 79% considering touchless claims that the need for actionable data continues to rise. Underwriting departments have leveraged attributes to streamline workflows for many years. It is not surprising claims departments racing toward automating processes have turned their attention to obtaining attributes to lead them quickly down the path to touchless claims.
Current State of Claims
Claims leaders and adjusters face a daunting task trying to funnel claims faster while leveraging less than ideal legacy processes and technology. A good example is the transition from field inspections to photo estimation. While this process is migrating to automation, the time it takes to complete a manual review of reports outside the workflow becomes greatly inefficient, and in some cases impossible, to complete prior to the resolution of the transaction. Claims marketing departments are touting the speed of claim closures, but this comes with a price. The graph below provides an example of what has been occurring in the market over the last five years.
This graph includes collision coverage exposures paid and closed within 90 days since 2014. The line is the increase in severity and the bars represent the amount of time until the claim first payment. There is definite improvement in the time it is taking to get a check into the hands of a customer, but severity continues to rise. This inverse pattern is consistent with the performance of property damage losses. There are multiple reasons why severity may rise over time, but the question is how much of this can be related to speed of handling versus missed opportunities due to a more thorough review? What data can improve current processes and advance future goals? The answer is mining new data sources and developing attributes that can be integrated into the claims journey.
What is an Attribute?
Think of attributes as the data about data. Attributes represent information about some “thing”. That some “thing” could be a person, building, business, vehicle, geography and the list is endless. For example, if I tell you John was in a police report one time then you know what occurred at that incident. However, if I want to create an attribute about this event, I could take all police reports where John has been a party in and provide an attribute that surfaces John had four police reports within a year. That is now an attribute about John. In another example, if I take the total number of uninsured motorist claims for John within one year I can deliver an attribute. The carrier may surface this as a standalone business rule or within a predictive/prescriptive model.
Attributes provide the data required to provide a valuable output. Better data leads to better results. Attributes can be derived from many different data sources including policy, public records, court records, property and claims history just to name a few. The more sophisticated claims departments become, the greater the need will be to include attributes into their workflow.
The Path to Touchless Claims
The first step in understanding how attributes can benefit claims processes is for the carrier to identify where they are regarding data sophistication. This self-evaluation enables a carrier to outline how attributes can influence their immediate and future needs. The chart below outlines the progression from manual activities to automation.
Whether you are at level 2 on the data sophistication chart leveraging business rules or a more sophisticated level 4 user with strong analytics resources, attributes can help provide the needed data to resolve a claim with less false positives and negatives. Internal data provides many insights, but the addition of outside data provides a better picture surrounding the claim. As carriers advance, more of their processes will allow fully automated minor claims without the need for human interaction. Initially, it is the low complexity claims where chatbots, models and attributes can reduce the need for human interaction and drive transformation toward a more touchless approach.
In summary, ask yourself:
- Where is my organization in relation to the levels of sophistication?
- What is pulling my adjuster out of their workflow?
- What internal/external attributes can help adjusters be more efficient?
- Which processes can attributes help automate?
At LexisNexis® Risk Solutions, we help insurance carriers across the country increase their level of data sophistication. Reach out to your account manager to set up a workshop. We’ll evaluate your process together and determine how and where you can integrate more data to improve outcomes.