How to achieve low touch property claims

The homeowners' insurance industry is often viewed as a "follower" of innovation pioneered by other insurance verticals, including auto. In particular, touchless claims—a process that involves no direct, in-person contact between the adjuster and consumer—have seen a meteoric rise in auto claims but generally remain an aspirational future goal for home insurance. 

Four years ago, the COVID-19 pandemic created an immediate need for innovation, generating a quick and substantial rise in homeowner claim technology and virtual inspection options, as well as growth in the desk adjuster model. More than ever before in the history of our industry, property claims were being managed and settled without an adjuster or other contractor on-site for inspection or assessment. 

While the digital transformation the pandemic sparked was good in many ways, the outcomes weren't always perfect. The industry adopted new tools and technologies, but sometimes adjusters were left to manage a patchwork of tools, vendors and processes. 

On top of these challenges, new headwinds have emerged in recent years. The inflation resulting from the pandemic is well documented, with labor shortages and supply chain issues impacting the industry from every angle. 

Beyond the pandemic, the homeowners' insurance sector has experienced increasing claim severity for seven consecutive years, according to LexisNexis. CoreLogic data shows that recent hail damage broke records across all National Weather Service offices. And finally, repair cycle times have ballooned, increasing by 33%—approximately six days—over just two years, according to JD Power. 

Against these headwinds, adjusters are being asked to do more and adjust claims at a historical rate. 

The homeowners' insurance has reached an inflection point where together, we must learn how to achieve the right balance of claim touchpoints to drive efficiency and accuracy that mutually benefits the homeowner, adjuster and insurer. Fast and fair settlements are what we, as an industry, are after.

Given the customization of every home, many residential property claims will never be "touchless." Assessing home damage and repairability is complex. But countless opportunities exist to "touch less," resulting in a smooth experience for homeowners, a streamlined workflow for adjusters and an efficient claims management program for carriers. 

While the number of touchpoints will vary based on each claim's details and needs, insurers accomplishing effective low touch claims typically possess the following attributes.

"Touch less" by standardizing decision-making. I said before that homes aren't standardized, but that does not mean decision making can't be. Homeowners' insurance companies manage or have access to vast amounts of information from the policyholder and claims history to the pricing and availability of materials. 

That data can help to standardize how claims are advanced and settled. For example, after the initial collection of measurements and images of damage, centralized or third-party analysis can consistently answer repairability decisions, pricing, material availability and timing. That can all take place without the need for another touchpoint, such as a follow-up visit. But more importantly it allows carriers to treat claims more consistently, no matter the claim severity or location. 

 "Touch less" by embracing embedded intelligence. It's obvious but can't be overlooked that advanced technology can be our friend. Combining vast amounts of data with virtual tools that help us make smart decisions more quickly can be a game changer. 

Artificial intelligence (AI) and machine learning are widely discussed and play an increasingly significant role in automating claims, as do new and exciting ways for the industry to leverage "big data." This technology likely will never manage most property claims from start to finish but will make processes quicker without sacrificing accuracy.

However, everyone reading this story knows that technology is paramount, but it can also be a detriment. Investing in too many separate tools and resources will generate confusion and a cluttered process for adjusters and homeowners. Investing in robust data and decision-making support is only worth it if the intelligence outweighs the hassle and any impacts to adjuster workflows.

As our industry looks to build processes and a culture supporting "touch less" claims, we must embrace consolidation and integration, creating opportunities to embed intelligence and data into existing workflows, rather than adding steps onto a process that is oftentimes already complex. 

Internal buy-in. No organization can achieve the above-mentioned change unless everyone in the company is onboard.  Change management is necessary but hard—especially when one way has been "the way" for years.  But your data can be a powerful tool for achieving buy-in. 

Use that data, such as the relationship between average claim cycle times and number of adjuster touchpoints, to show how the day-to-day will be easier and more effective with a different approach.

Home and automotive settlements will never be equal, but there are common denominators that can help advance homeowners' insurance into a new, more efficient, and even more accurate era of claims management. It's unlikely we'll ever realize a completely touchless ecosystem, but achieving a process that touches less can be a driving force for helping to stabilize the industry and create a viable future.