FEATURES - Connected Insurance Special Supplement
September 08, 2017

Evolving Auto Claims Reporting: From Five Days to Nearly Instantaneous

By Special Guest
Peter Byrne, VP, business development, insurance telematics, CalAmp

The cost of claims (up to 80 percent of premiums earned) is the largest single expense for vehicle insurers.

Traditional automotive claims reporting has typically meant a lag time of three to five days from an event to when the insurer receives an initial report via notification to a call center. The implications of such a lag are sobering: delayed, subjective, and largely qualified incident accounts; the persistent opportunity for fraud; and the potential for a lessthansatisfactory claims experience for the policyholder. These implications are unacceptable in a highly competitive market where retention is key.

Newly deployed technology advancements now enable automation ofthe First Notice of Loss, helping insurers realize the promise of truly automated claims processes. In parallel, these new technologies deliver actionable IoT intelligence that enables insurers to further mitigate cost and risk,and improve policyholder service.

Automation of the claims process has been going on for years – digitized documents, web-based interfaces, increased policyholder self-service, improved analytics, and anti-fraud developments all contribute. Likewise, telematics have already made their mark in underwriting with measurable advantages for pay-as-you-drive and pay-how-you-drive, usage-based insurance programs. Full automation of accident event reporting, a long-sought objective of auto insurers, now promises to revolutionize claims processing, improve policyholder experience, and help carrier bottom line by connecting business-critical data and transforming it into actionable intelligence.

A fully automatic crash report and associated event data, or automated FNOL,requires a crash-grade telematics system that incorporates a robust discrimination algorithm installed at all times that is able to distinguish between an actual crash and false positives such as potholes, hood slams, door slams, rumble strips, and speed bumps.

The cost savings and benefits to insurers can be significant, as the following data illustrates.

EFFECT ON CLAIMS PAYMENTS WHEN MORE DATA IS RECEIVED AFNOL

Type of Claim (Third Party)

Reduction in Payments (Severity)

Bodily injury settlements

15-25%

Bodily injury settlements (involving a lawyer)

25-49%

Property damage claims

10-15%

EFFECT ON CLAIMS CYCLE TIME WHEN MORE DATA IS RECEIVED AT FNOL

Type of Claim (Third Party)

Reduction in Claims Processing Time (Cycle Time)

Bodily injury settlements

5-15%

Property damage claims

8-15%

The latest vehicle telematics solutions are also able to deliver automated accident reconstruction and predictive vehicle damage assessment. When used in conjunction with near real-time FNOL reporting,that informs and empowers insurers, and self-insured fleets, with the capability to expedite the repair process, mitigate fraud, and deliver a satisfying, efficient claims process. Accident reconstruction provides detailed analysis of a collision as force, direction of impact, speed prior to impact, and other key metrics are captured. Predictive vehicle damage assessment helps determine whether the vehicle is a total loss or repairable, improving in-field vehicle triage and potentially mitigating costs associated with unnecessary towing and storage.

These new technologies bring efficiency to the claims process and mitigatethe business impact of an event for many types of businesses.

For insurers they lower the total cost of processing a claim by automating functions associated with material damage and the triage of vehicles in the field while reducing fraud by providing defensible data during the accident reconstruction process

For fleet managers they address unreported crashes, provide timely assistance to drivers involved in a crash, and help managers evolve policies to protect the well-being of drivers and minimize company liability

For vehicle repair centers they unlock potential opportunities to drive customers involved in accidents to participating partners for repair, parts, maintenance, or new car purchases 

The future of fully automated claims processing is here.Insurers now have the means to greatly reduce the timeand resources needed to process and close claims quickly and accurately.

Peter Byrne is vice president ofbusiness development, forinsurance telematics at CalAmp Corp.(www.calamp.com).




Edited by Ken Briodagh


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