Solving Claims-Intake Overload For Smaller Insurance Carriers
By Haywood Marsh
As billion-dollar hurricanes pummel the coasts, insurance carriers are facing a category 5 operations challenge: a snowballing claims-intake challenge. When hurricane season began this year, carriers were still sorting out claims from 2017’s mega-storms, Harvey, Irma and Maria. Then Florence and Michael hit, adding to the backlog.
This trend has worsened over time. As anyone watching the news would know, the frequency and financial toll of major weather-related disasters is rising. Additionally, hurricanes are getting deadlier and costlier because the coastal population has surged. Sandy, which wasn’t even a hurricane when it made landfall, was the fourth most expensive storm since 1980 largely because it hit densely populated, low-lying metropolitan New York. Likewise, a more than doubling of North Carolina’s shoreline population contributed to the $38 billion to $50 billion toll of Hurricane Florence.
Together, storm intensity and rising population mean more claimants, and a bigger intake burden for insurers. As the 2017 hurricane season demonstrates, many companies are not prepared to keep up.
Delayed claims inflict major headaches and financial challenges on insurers. Businesses that stay closed and employees who remain out of work boost claims. As delays persist, claimants may assign their claims to unscrupulous contractors, or seek representation from a public adjuster or a plaintiff property lawyer. Some claims end up in court, where juries, driven by emotion, tend to find judgment against insurers. All this dramatically increases administrative costs, legal fees and payouts for insurers, resulting in a soaring loss ratio.
Compounding the problem, many carriers have not yet adjusted to the new normal — not only of more frequent and intense storms, but also of more efficient, tech-driven ways to operate. This is particularly true for small- and medium-size carriers, many of which continue to take claims solely by phone.
In an era when consumers use phones for much more than dialing other phones, it is essential that carriers offer a digital channel for reporting claims. Many claimants will still prefer to speak with a real person, but offering a digital option will appeal to a growing cohort of customers, particularly younger ones, and will boost the carrier’s efficiency. With industry leaders investing in enhanced customer experiences, and with disruptive startups raising billions to capitalize on incumbents’ weaknesses, it’s also a competitive imperative.
The good news is that harnessing technology is well within the reach of all carriers, not just those with large budgets and in-house tech departments. We live not only in a time of increased storm damage, but also one of readily available turn-key online apps that can greatly enhance administrative efficiency.
To provide relief from claim-intake overload, various vendors offer web solutions that enable customers to file claims themselves, on their smart phones, computers, or tablets. Web intake provides numerous advantages. It is available 24/7/365 and offers virtually unlimited capacity to take claims, reducing the potential for overloaded call centers. It enables customers to upload photos and videos of damage, giving adjusters a head start over what they’d receive if the customer had called an 800 number. It can go a long way toward delivering a better customer experience, which is an important goal for any carrier.
Web intake can also significantly boost efficiency for insurers. A well-designed web intake system can be customized according to the carrier’s needs, and can be integrated with internal systems, allowing information to flow seamlessly from the vendor to the carrier. A high-quality system will also disseminate, escalate and route claims automatically. Best of all, claims in this type of system would be subject to the same integrity and quality assurance checks as on phone-based systems.
By using web intake, a carrier’s claims get processed while a phone-dependent competitor’s customers are still on hold. The system can even be programmed to help customers understand and act on their next steps toward recovery, providing a superior user experience and saving the insurance company money and time. After all, claimants want to clean up and repair their lives and businesses. They certainly don’t want to spend time in court pursuing an overburdened carrier.
Web intake gives them an additional, highly efficient tool to recover. With customizable portals, carriers can quickly and efficiently deploy web intake, so they are ready before the next storm hits.
Haywood Marsh is general manager of NetClaim, which offers customizable insurance claims reporting and distribution management solutions. Haywood can be contacted at [email protected].