Tech driving accelerated claims settlements as hurricane season is here

The insurance industry is witnessing a transformation in claims settlement processes thanks to a cutting-edge wave of artificial intelligence and technology innovations. As severe weather events become more frequent and customer service expectations reach new heights, insurers are under increasing pressure to adopt these technology advancements and expedite the claims process. From predicting catastrophe-prone areas to streamlining workflows and envisioning touchless claims, this transformative landscape provides insurers with an opportunity to settle cat claims faster than ever before, surpassing expectations along the way.

The 2023 Atlantic hurricane season initially showed promise for insurers in terms of potential claims, but the National Oceanic and Atmospheric Administration (NOAA) upgraded its prediction in early August from "near normal" to an "above normal" number of storms. This year has already seen a surge in cat claims, as severe convective storms in the US through March have resulted in a staggering $13 billion in economic losses, setting a record as the costliest Q1 on record for US severe convective storm activity.

In addition, rising customer expectations have increased pressure on insurers to use data, technology, and AI more efficiently to settle claims with speed and precision. The role of adjusters has never been more challenging. However, advanced technologies provide a ray of hope for improving the claims process.

Insurers must invest in scalable catastrophe response capabilities that can deal with changing weather patterns that randomize their exposure and increase their risk. Here are three ways insurers are leveraging AI and analytics models to benefit both themselves and their customers.

• Mobilizing loss adjusters before a hurricane strikes using data analytics and AI. By employing predictive analytics and mobilizing loss adjusters ahead of hurricanes, insurers can ensure an agile response by anticipating the worst-affected areas and types of claims. This allows teams to focus their loss-adjusting expertise and plan for remote offices and facilities. Additionally, advance agreements with service providers for loss-adjusting services create extra capacity to meet increased demand.
• Streamlining workflows with integrated IT solutions. Outdated processes cost money, drain resources, and consume the valuable time of highly skilled adjusters. However, modernized workflow systems for high-volume, low-complexity claims enable significantly enhanced speed and transparency. For example, we're working closely with global insurer and reinsurer MS Amlin to enrich claims files with AI-powered data during the triage process using an embedded AI model. This partnership enables faster response times for clients, agents, and brokers while machine learning continuously improves the system with each new claim, leading to quicker processing.
• Using drones and AI for damage assessment and faster processing. Using drones saves countless hours teams would have spent traveling to affected areas. Coupled with AI, the data collection process is faster and more accurate, driving better decisions. The latest cat AI models are easier to deploy and scale, requiring only a small sample of human-labeled data to accurately assess a broad area. These improvements are a win-win-win for the claims adjuster, insurer, and ultimately the homeowners, who receive their payments faster.

The promise of touchless claims holds immense potential in meeting customer expectations. As customers demand more flexibility and control, insurers are driving the move towards touchless claims, which are processed without human involvement. Digital tools for self-reporting and using photos from drones or crowdsourced networks to show losses offer customers unprecedented flexibility when engaging following a loss.

It is important to note that digital engagement is not a one-size-fits-all solution. For traumatic events, such as losing a home in a wildfire, policyholders still expect insurers to connect with them in person. The latest digital tools, however, allow insurers to manage claims more efficiently, freeing up time for agents to provide personalized, sympathetic service to customers in need.

Although human expertise and empathy remain crucial in the claims response, AI and other technologies can augment claims adjusting knowledge, productivity, and efficiencies for insurers. Embracing these advancements is key to exceeding customer expectations, reducing cycle time, and ensuring customers remain informed throughout the claims process. In times of disaster, every minute counts when it comes to getting people back on their feet and in their homes. AI empowers insurers to achieve this goal even faster.

As insurers continue their race against time, the transformative power of AI and tech innovations cannot be overlooked. By embracing these advancements, insurers are accelerating their claims settlement capabilities, surpassing customer expectations, and shaping a future where claims are settled with unprecedented speed and efficiency. The finish line of superior claims settlement is within reach, and insurers must seize this opportunity to transform the industry and deliver exceptional service to their customers.

This article was first published in InsuranceNewsNet.com, authored by Jeffrey Saye, global practice leader of insurance claims at Genpact.