Claims are a paradox for both insurers and claimants. None of the parties involved wants claims to occur. However, when a situation occurs claimants demand instant resolutions, transparent processes with a personalized experience. Insurers, on the other hand, remain wary about efficiency, accuracy and fraud/ litigation risks.
We see a number of efforts being done in past to enhance claims handling processes and claim prevention remained virtually untouched. However, with technology coming at the driver seat, the rules are being re-written. Insurers are now beginning to look beyond using technology for operational efficiency. The possibility of creating data-driven products which can excite customers has got them thinking about how technology can be used to add value in customers life and become their strategic partners and not vendors.
Upcoming areas like connected cars, telematics, interest-based data from social networks, wearable devices, and smart home solutions are gearing up to empower insurers to transform their business by becoming a claims prevention and risk minimization partner for customers. Time to become well-wishers and help them prevent accidents has come finally.
Technologies are already at the heart of claims prevention
If we are thinking it is the future, let me correct you it is the present too!
Let us look at a unique challenge US insurers face. It is estimated that 14,000 water damage claims are recorded per day by US homeowners, each having a ticket size ranging between USD 6,000 – USD 15,000. They total up to a whopping USD 123 million in preventable damages daily.
A Chicago based organization, Elexa identified this and currently offers ‘Guardian’, a fully autonomous water damage prevention solution which prevents water damage in the home and even shuts off water in the event of an earthquake with built-in vibration sensors.
James Jackson, EVP of Elexa explains: “There’s nobody that IoT and home connected sensor devices matter more to than people in the insurance industry, because they grant peace of mind for the homeowners, and help to prevent costly damage claims,”.
On the other side, we also see traditional insurers such as Desjardins, Willis Towers Watson and Franklin Mutual have partnered with Roost; a California based home telematics company, which offers smart sensors that help in mitigating claims costs by sensing water leaks, as well as humidity and freezing temperature situations.
According to Roel Peeters, co-founder and CEO, Roost: “Home telematics solutions are not going to prevent an incident like a fire or a water leak from happening, but they can certainly help to mitigate a situation and reduce it from something that might result in total loss, which is devastating for homeowners and very expensive for insurers, to a much smaller and more manageable incident,”.
Another area which has seen some good traction is the Usage-Based Insurance (UBI) for automobiles. As per Frost & Sullivan, about 100 million drivers globally are expected to take such policies by 2020, with regions like Italy, UK and the US leading the shift. Progressive has already made its headway and is among a throng of many car insurers using telematics to determine a customer’s premium based on their car type, driving patterns, potential traffic, etc. Travellers, another insurance provider offers its “IntelliDrive” that allows parents to set safe driving rules for their children and receive mail or text alerts if the drive breaches these rules. Interesting isn’t it?
IoT landscape is evolving continuously and making it challenging for insurers to adopt, learn, un-learn quickly to become a partner for risk prevention rather just risk prevention. The new-age insurance requires a shift in operational agility and continuous value creation. The need for having a strategic technological partner is now a must have!