Here’s How Insurers Can Use Automation to Innovate Their Operations
Matthew Walsh spent his career in the insurance industry, managing complex claims, including exotic vehicles, motorcycles, and high-cost losses. He was most recently the director of claims innovation at Metromile, where he focused on automating claims, digitizing the first notice of loss, improving fraud tools and detection, promoting self-service, and telematics for the leading pay-per-mile insurance company.
While at Metromile, he partnered with Metromile Enterprise to innovate the insurer’s claims operations. He notes automation is a key competitive advantage: It enables the insurer to achieve significant customer experience improvements, boost employee productivity, and increase profitability.
Matthew explains how insurers can strategically deploy automation projects: “You don’t have to shoot for the moon to get started,” he says. “Start by taking baby steps and handling those low complexity claims.”
How can insurers use automation in an organizational capability?
Automation is a key competitive advantage for Metromile. The insurer seeks to remove redundant work and tasks to allow their employees to focus on value-added work: answering customer questions and strengthening customer relations.
Automation is also the backbone of a self-service platform. Customers can self-service their claims when and where they want without giving up the support of a claims adjuster if needed. The automation powers the self-service tool, so customers can set up an appointment with their preferred repair facility or submit photos at their convenience. Metromile customers often boast about how easy it is to file a claim and how responsive the process is on online reviews.
Automation also allows Metromile to operate more efficiently to reduce their expenses. In turn, they can reduce rates to be more competitive in the marketplace. They pass their savings along to their customers.
How do you decide what projects are ripe for automation, and how does technology play a role?
The best practice is to expand end-to-end, touchless claims automation capabilities. A good chunk of Metromile’s claims are fully automated end-to-end with either low or no human touch, for example. They are focused on fully automating low complexity, low fraud, single-vehicle type accidents with no injuries. These claims are the bread and butter of automation, and Metromile Enterprise does this very well.
When I approach an automation project, I look at automating the most frequent tasks that are also the least complex. This is the low-hanging fruit: I can deliver a solution easily and produce some positive business gains. For example, I go after high-frequency items or processes with low complexities first. They are the easiest to implement and where you can deliver the most bang for your buck.
Further along, you want to automate the low frequency, highly complex items, such as when an attorney might be involved. There is a lot of foundational work that needs completing in the beginning, so you have to build up to this. You have to think about the incoming data for a claim and how you’re collecting it. You need to collect clean, structured data to make the right decisions downstream.
Notably, Metromile evaluates, tests, and refines their approach to automating more complex claims, such as those with an injury. They enable third-party customers to service their claims just as easily as first-party customers do now.
To achieve this efficiency, they leverage telematics data, which provides rich information from a customer’s crash. They say they can tell when a crash has occurred, when and where it happened, the points of impact, severity, and whether they may be liable in most cases. All of this data is a crucial factor in automating their exposures without a lot of adjustor intervention.
Many decisions to automate or not to automate are dependent on the facts of ths loss. Some accidents are straightforward, such as when someone gets rear-ended, and you can predict and determine liability based on the data, but others are much more complex. You have to build along the way to get to this level.
Why is the first notice of loss important to automate?
You’re gathering all of your facts of loss at the first notice of loss. It’s the key to accurate assignment and claims segmentation, including the decision to automate or not automate a claim. I saw firsthand working at top-10 insurance carriers the struggle of getting the right claim to the right person early. It often required claims to be transferred multiple times, creating delays and poor customer service.
If you collect all of the right information, such as impact severity, points of impact, and injury information, you can direct the claim to automation or the right adjuster the first time. The result is a shortened cycle time and improved customer experience. You don’t have to shoot for the moon to get started. Start by taking baby steps and making improvements to your first notice of loss. A good place to start is implementing a digital first notice of loss for your claims journey.
What do large P&C carriers struggle with when it comes to claims? What are their most pressing pain points?
Many processes at traditional insurers are manual and labor-intensive, but they don’t have to be. For example, an adjuster typically collects and requests photos or payment information from a customer over the phone. The data is also collected downstream, late in the claims process, when the adjuster needs it to take action. Insurers know they will likely need this information to take action later, but they choose not to collect it early in the claims process. Instead, they contact the customer multiple times to gather what is needed one piece at a time, creating delays and inconveniencing the customer.
With Metromile Enterprise’s digital, first notice of loss platform, you can collect photos directly from the customer when the loss is reported. The images are available for the adjuster immediately before the customer’s first call, allowing an adjuster to expedite the claim’s handling. If the claim qualifies for automation, the photos can automatically be sent as an appraisal assignment to an appraiser, speeding up the estimating process.
An insurer could also collect payment information securely through a digital platform before the estimate is returned so that payment can be issued instantly when an estimate is approved. The result is a significantly improved customer experience, reduced claims cycle, and lower operating expenses.
What are the benefits of automating claims?
You can reduce loss adjustment expenses. Metromile reduced these expenses by increasing the number of claims handled without increasing headcount. Adjusters focused on more complex claims, while the automation handled less complex claims. As a result, you take away the cost of handling smaller claims.
For customers, it also allows adjusters to be more available. They can answer more complex questions or support customers who need assistance. Metromile saw improved customer service and NPS scores as they gained capacity through automating less complicated claims.
How do you strike the right balance between technology and manual processes?
Customers are still surprised an insurer can handle a claim without an agent. They might only file a claim once every five to10 years, so it is vital to balance automation and people-powered processes when customers have a question.
Metromile Enterprise can be an electronic adjuster for insurance companies. For example, Metromile uses the same platform for its automated and non-automated claims. Human adjusters can easily step in to assist the customer if needed as a result. As customers get more comfortable with this technology, it is very important to have people available.
What are the biggest opportunities for insurers who are considering working with Metromile Enterprise?
Insurance carriers often struggle to have a broader long-term vision for what the claims organization will look like in two to five years and the steps needed to get there. Many carriers are implementing small, adjuster-facing technology and process changes. They are doing this without considering their role in the overall end-to-end claims journey and their customer experience. They invest in technology to fit their existing claims process and the status quo, when they should be re-imagining what the claims process could be, and investing in that instead.
Customers want to file and manage their claims digitally. They want to be able to self-service their claims at their convenience and have someone they can call if needed. They don’t want to be required to call to move the claim forward. From a claims perspective, insurers want to reduce operating expenses, keep the loss ratio in check, and provide a positive claims experience to retain customers.
Metromile Enterprise can help outline a roadmap for insurers and build and implement the products to meet both the customer and the insurers’ needs.
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