How insurers are using AI and deep learning to make auto claims touchless and painless

Insurers are finding ways to improve accident claim processing from start to finish using AI and computer vision for improved accuracy and efficiency in claims and assessment.

Technological innovations in machine learning, artificial intelligence, IoT, automation, telematics, and data analytics are reshaping the way claims information is captured, organized, and analyzed. A handful of these technologies are having a direct impact on how claims are processed for customers and their vehicles, and overall business models.

Specifically, AI and computer vision can automate vehicle and damage inspection, and generate a comprehensive report in no time. The AI driven intelligent system learns to separate out a complete image into components, distinguish healthy parts, and perform a comparative analysis to identify whether a part is really damaged. By providing certain parameters, AI can perform grading and severity analysis. The system evolves into an expert system with enough test cases and betters itself at detection analysis without human intervention.

Digitizing the claims function holds tremendous potential for the property and casualty industry. To capture the value of digital claims system must focus on improving — customer experience, efficiency, and effectiveness.

McKinsey I Claims in the digital age

Building a Seamless Automatic Claims Journey

Claims handlers and adjusters manually carry out complex tasks, leading to significantly divergent results. Digital tools and systems can simplify and standardize manual processes, by assessing estimates faster, more accurately and consistently. Standardized reports and calculation methods also give customers a comprehensive overview of how their claim was calculated — leading to higher customer satisfaction, reduced follow-ups, recalculations or litigation.

Building this seamless claims experience, involves digitization of each point of the customer journey. Starting with a short design phase, which employs design-thinking techniques to iteratively develop the best possible end-to-end customer journey, successful players quickly move from the drawing board to prototype development. The minimal viable product, combined with early customer testing, results in rich feedback, which is then continually incorporated into the evolving digital solution.

The meaningful impact of new digital applications in claims can be seen in new capabilities for inspection, valuation, estimation, and review.

01 Automatic Vehicle Damage Inspection

Inspections are the very first step of the car insurance claim process. Deep learning can automatically detect scratches, dents, rust, and breakages. The damage and the severity can be automatically inspected by creating a 360° overview from images or video feeds. After the inspection, a report can be generated with a list of damages and repair estimate.

Ordinarily, in the manual process only 30% of total losses are accurately caught at FNOL. The remainder are correctly identified as a total loss, only after one or two weeks, once the vehicle goes to a shop. This happens because a customer service representative is usually not a trained appraiser. But carriers can now insert an expert appraiser in the form of an AI solution, which will deliver 90% accurate identification of total losses, directly at the time of FNOL.

McKinsey I Claims in the digital age

02 Consistent Estimation & Review

Post FNOL and through the rest of the process, handlers typically decide on the appropriate next steps, such as scheduling an adjuster appointment or providing information about direct repair programs with local repair shops. Supporting the entire journey with automated processes instead, is critical to establishing truly end-to-end digital customer journeys. Digital evaluation can automatically identify the best next step in a specific customer journey, reducing manual touch points, and significantly speed up the claims process.

AI can complete all subjective decisions that humans typically make in the estimating process, such as which parts are damaged, do they have to be repaired or replaced, how many repair hours are needed, and automatically schedule an appointment with repair shop at FNOL itself.

Carriers are seeing not just efficiency but higher accuracy in damage estimation, as algorithms bring consistency. Algorithms will write the same estimate each time, for the same vehicle make, with the same damage. Carriers are also using AI to review estimates coming in from shops, in-house appraisers, and from IAs as well.

03 Analytics Led Valuation

Even with the use of vehicle history reports, insurance professionals are still reliant on unscientific, subjective, educated guesses, which often lead to mistakes and inconsistencies in the valuation and payout process during claims processing.

Today advanced valuations use data analytics to provide more precise valuations. VIN-specific data resources take into account each individual vehicle’s unique history footprint, helping carriers determine its value, both current and future. History-adjusted vehicle valuations analyze multiple factors, such as, the number of owners, vehicle usage, accident and accident severity, title issues, flood/hail/fire damage, CPO history, and other variables that are not accessible during a physical inspection.

With the right tools and resources, analytics-driven valuation is more precise in determining the exact vehicle payout, which keeps clients happy, and preserves the right margin for each vehicle portfolio.

The New operating model for the digital age

Insurance industry has talked about touchless claims for sometime, as it is benefitting many different players. Customers have increased peace of mind at FNOL. They can know in minutes whether their damage is repairable or total loss. Carriers are taking a whole week off the claims cycle time. Repairers are seeing 70% fewer total losses, because their vehicles are being correctly triaged. Part suppliers are receiving parts orders much earlier because the carrier now has the precise appraisal at FNOL.

Digital-first initiative has raised the bar through simple and intuitive customer interfaces. To support these efforts, further, seamless handoffs across channels are needed. Customers who start their journey online but want to talk to a claims handler or agent halfway through should be able to do so without having to repeat steps or information. Only, the insurers that move swiftly and radically redesign their claims function can expect to deliver against new, higher customer expectations — while improving claims handling accuracy and efficiency in the process.

Roadzen is a leader in automotive claims management - our technology powers touchless video claims for leading insurers globally. Write to us at info@roadzen.io or visit www.roadzen.io to transform your claims experience.

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