Automated Insurance Claims

In the last several years insurance companies have embraced new technology like artificial intelligence, that’s revamped entire divisions like automated insurance claims. For decades workers had to go through piles of paperwork to process an auto insurance claim. Thanks to automated car insurance powered by artificial intelligence, those days are long gone. 

Now, claims can be processed faster, without human errors, and for much less. These increases in efficiency have lowered the operational cost for insurers, resulting in a competitive cost advantage for companies implementing it. 

What Are Automated Insurance Claims?

Automated insurance claims use advanced artificial intelligence and machine learning to process a claim. When an auto insurance claim is submitted the A.I.-powered tools will look over the claim submission and verify it for accuracy and also look for any potential errors or fraud. 

Most systems use complex algorithms and machine learning, which allows a claim to be processed quickly and efficiently. These A.I. systems are built from large data sets, from numerous sources including accident reports and prior claims filed, and then an assessment is made. 

For example, if someone drives a 2018 Toyota Camry and gets rear-ended, then the A.I. database already has thousands of previous claims involving rear-end Toyota accidents. This includes the average cost of repairs and injuries and other data that is used to process the claim.   

Automated Car Insurance Claims Follow a Process 

With advancements in technology, filing an auto insurance claim has become faster and more efficient. Several processes are followed when someone files a claim. Below are the key steps involved in this streamlined process:

1. Claim Submission: The first step is claim submission. Most auto insurance claims are now done online, often on a smartphone app or the insurer’s website. The policyholder is then required to submit detailed information like photos, videos, and documents, such as the insurance information of the other party.
2. A.I. Verification Process: Once the claim is submitted then the A.I. kicks in and cross-checks the submission with its own internal database. This automated process is called data verification. A.I. tools then check multiple external sources, including police reports, the weather during the time of the incident, and any available telematics data. 
3. Damage Assessment: Modern artificial intelligence systems are now so powerful they can analyze photos and videos and create a total estimated repair cost.
4. Decision-Making: Once the information is verified for accuracy, the automated A.I. system calculates a settlement amount and the claim is then ready for settlement.
5. Human Review and Settlement: At this point, a human will need to go over the settlement amount recommended by the automated A.I. and then either approve the settlement or make any necessary adjustments.
6. Faster Turnaround: The entire process that used to take weeks and sometimes months can now be done in several minutes or a few hours. When a policyholder gets their vehicle fixed faster and gets paid a lot sooner, it makes for a much better overall experience. 

The Advantages Of Automated Auto Insurance Claims 

There are so many advantages to automating the claims process that both the policyholder and the insurer realize. The first one is super obvious: 

1. Much Faster Claims Processing Times: Automated systems can now do the work of multiple humans in a fraction of the time. In fact, the entire claim process up to approval can now be done often in minutes, which would have been unthinkable just ten years ago. 
2. Greater Accuracy: Humans make mistakes at a much higher rate than A.I. systems. In the past, many claims were fraught with errors leading to angry customers and even lawsuits. Now, with automated claim systems, errors have been reduced to a very low number. They are now almost obsolete. 
3. Improved Customer Satisfaction: When customers have their claims processed faster, they’re a lot happier. Enhanced customer satisfaction often results in the customer renewing their policy with the same insurer and not switching carriers. 
4. Reduced Costs: Automated systems can do the work of hundreds of humans. While there is a substantial investment needed upfront to build automated A.I. systems, the initial cost is recovered quickly. These cost savings are then passed down to consumers by way of lower rates. 
5. Reduced Fraud: While humans have always detected fraud on insurance claims, they’ve never been able to catch as much as automated A.I. systems can. Advanced artificial intelligence systems can identify what claims are fraudulent much better than a human, resulting in substantial savings for insurers.
6. A.I Systems Scale At Volume: Automated systems can handle thousands of claims an hour and work 24/7 without taking a break. During surges in claims like a natural disaster, these A.I. systems are vital in getting claims approved quickly without delay. 

Real-World Applications

Many of the larger insurers and some startups have implemented automated insurance claim processes. These include: 

Challenges Facing Automated Insurance Claims

There are so many advantages to automated car insurance claims but there are a few challenges and concerns among consumer groups. One big issue is data privacy. Automated insurance systems rely on huge amounts of very sensitive data, which has raised concerns about people’s privacy. Some people suggest that insurers could violate data protection rules and regulations. 

There are also issues with A.I. systems that potentially create certain biases. Machine learning systems can over time create unintentional inherent biases that can lead to unfair claim outcomes. There are also issues with trust and a lack of human input. Many older people feel more comfortable talking with a real human person and just don’t like having an A.I. system process their claim.  

The Final Word On Automated Insurance Claims  

There is a massive paradigm shift happening with automated insurance claims. Now, claims are

being processed in hours with almost no errors, cutting the time it takes to complete a claim and saving insurers serious money. While there are a few challenges insurance companies face like data privacy, it does not outweigh all the benefits. 

Innovators like Lemonade Insurance will lead the way and gain huge market share in the years to come. As more advancements in A.I. take place, more and more insurers will be adapting this new and amazing technology.