There are many variables in any given claim, including the unique context of the incident, nuanced local, state, and national regulations, emerging technologies, changing customer expectations, and the nature of the insurance coverage itself.
Distilling a wide range of claims variables into a simplified process has been a longstanding goal for insurance carriers, stymied by a lack of tools to holistically align an equally wide range of parties involved in every claim.
Coordinating communication, information sharing, and negotiations among policyholders, insurers, third-party claimants, repair shops, medical providers, legal representatives, and others can be challenging, especially in complex or high-value claims.
Couple that with the increase in available data from connected cars and IoT devices and the level of difficulty, intricacy, and specialization grows. The impact can mean:
- Delayed claim settlements: More complexity typically translates to slower and longer processing times, which can be frustrating for policyholders who are awaiting reimbursement or coverage for their claims.
- Increased administrative costs: Managing complex processes often requires more resources and manpower. Insurance companies may need to invest in additional staff, technology, and infrastructure to handle these intricacies effectively, and those increased administrative costs can lead to higher premiums for policyholders.
- Higher potential for errors: Misinterpretation of policy terms, inaccuracies in documentation, or human errors can result in claim denials or incorrect settlements.
- Increased potential for fraud: Bad actors can exploit claims complexities and submit false or exaggerated claims, making it harder for insurers to detect and prevent fraudulent activities. This can lead to financial losses for insurance companies and potentially higher premiums for policyholders.
- Negative customer experience: Lengthy, cumbersome procedures, unclear instructions, and limited communication channels can make the already friction-filled claims process even more confusing and frustrating. This can lead to policyholder dissatisfaction, reputation damage, and even customer churn.