After an initial surge, the number of clients taking advantage of virtual claims processing has dipped. For insurers, now is a critical time to evaluate their processes and figure out how to properly provide a touchless experience, says a recent report.
Clients turned to virtual claims processing in droves following the onset of the COVID-19 pandemic, reported LexisNexis Risk Solutions. Prior to March 2020, the month in which COVID-19 was declared a global pandemic by the World Health Organization, fewer than 15% of auto insurance claims were handled virtually. That quickly accelerated to 100% and has now settled to around 60%, according to the company’s Future of Claims Report.
That’s generally in line with what TD Insurance president and CEO Ray Chun told Canadian Underwriter earlier this year. He reported customer usage of virtual claims jumped from 15% to 85% once the pandemic hit.
However, LexisNexis observed that the fact there was a drop after an initial spike in uptake of virtual claims processing shows that insurers have work to do when it comes to providing the ideal claims experience for customers.
“While the past year has proven to be a great awakening for claims automation, we’re now at a crossroad, and what will set insurers apart is a complete claims handling digital transformation and move from traditional to touchless,” Bill Brower, vice president of claims at LexisNexis Risk Solutions, said in an announcement about the findings. “As we look ahead to 2025, the industry should be optimistic that we will soon see a day when the vast majority of claims will be processed virtually. But it will take hard work to get there.”
The report calls on insurers to improve their customer experience and turn virtual claims processing into a competitive advantage. The secret to success will be offering a hybrid model, which sees self-service claims options teams up with access to “personal touch” services when customers feel they need it.
After interviewing more than two dozen insurance claims executives and 1,750 auto policyholders — the majority of whom has filed a claim within the last two years — LexisNexis highlighted a few key findings, such as:
There is increasing comfort and satisfaction with an automated claims process. Clients are seeing advantages of self-service claims with almost two-thirds (62%) saying it’s more convenient to submit a claim anytime and anywhere. Meanwhile, more than half (55%) say it enables faster claims settlement.
More than two-thirds of Millennials (68%) and more than half of Gen Xers (53%) say the pandemic has made them more open to filing an online claim. This indicated younger and tech-savvy generations are buying in.
Still, finding and building on the sweet spot of offering self-serve options and human interactions is key. When a client is frustrated, sometimes they feel they need to speak with a claims representative, the report said.
This was a point emphasized by Erin Fischer, senior vice president, chief claims and regional insurance operations officer at Wawanesa, during an Insurance Institute of Canada’s At the Forefront webinar.
“Human-to-human interaction will always be one of the most important aspects, certainly in claims handling, because the customer walks away feeling and we’ve created this connection, and the power of human connection cannot be understated,” she said during the presentation, Exceptional Customer Experiences in a Virtual World.
LexisNexis did note that data privacy concerns are at the top of the list when it comes to virtual claims hesitation. Almost two-thirds (61%) reported concern about the security of personally identifiable information.
“Overall, consumers are willing to move to more self-service claims options as long as the experience continues to evolve to meet their expectations and deliver the benefits of convenience and security,” Brower said. “Whether claims automation will become the new normal is still up for debate, but this past year has proven to be a powerful proof point for the viability of automated claims processing, both in terms of insurer capabilities and consumer receptivity. Now is the time for insurers to continue to develop and refine their claims handling digital transformation, before it’s too late.”