Claims
Inside the current state of insurance claims
In today’s fast-paced, digital-first world, policyholders demand more transparency, efficiency, and personalised service – meaning that the landscape of insurance claims is long overdue refurbishment. Insurers are responding by leveraging artificial intelligence and data analytics to streamline the claims process, reduce fraud, and enhance customer satisfaction.
This evolution is not without its challenges, as companies must balance innovation with regulatory compliance and data security concerns.
Speaking as part of the much-heralded Professional InsurTech Certificate, Brent Williams – Founder, CEO & President of Benekiva, a firm which specialises in delivering configurable technologies to transform the end-to-end claims and servicing experience, spoke passionately on the current state of play in the claims market.
Williams opened up on the burgeoning need for transformation in the sector – before discussing some of the finer details on how to achieve this.
He said, “If you look at the current state, there is an imperative need for transformation. However, we also know that this is difficult to accomplish for many carriers due to several challenges. First, many carriers still operate with multiple legacy systems, including green-screen applications. Some carriers believe their systems are immune to digitisation, thinking there is no way to digitise those processes. However, we have found that they are not immune to digitisation. With the right partners and technologies, you can advance your digital and claims transformation efforts.
Announcements
THE DOAN GROUP AND VIKING AUTO APPRAISAL ANNOUNCE MAJOR PARTNERSHIP. WILL JOIN FORCES IN MASSACHUSETTS, DELIVERING EXPANDED SERVICES
Highly respected Viking brand becomes part of New England-based Doan franchise
Viking Owner/CEO Paul McKeen** and entire staff to be retained by Doan
The Doan Group, a nationwide provider of auto, specialty vehicle and equipment, and property appraisal and adjusting services, has announced that its New England-based franchise, servicing Massachusetts, Rhode Island, New Jersey, and New York, has joined forces with highly regarded and tenured Massachusetts-area appraisal firm, *Viking Auto Appraisal.
Under the terms of the deal, all Viking employees will become part of Doan’s New England franchise owned and operated by Dominick and Zeny Caravella, a husband-and-wife team. The entire Viking appraiser network will also now become part of Doan’s network, and Viking’s current owner and CEO, Paul McKeen, is joining The Doan Group Corporate in a consultative role.
The Viking brand will also be retained and used jointly with the Doan brand in Massachusetts and other select New England states.
[Ed. Note] SCA Claim Services and The Doan Group - Corporate share the same ownership group
Driven Brands Joins AutoBody Alliance’s Direct Repair Network -
Driven Brands and AutoBody Alliance (ABA) announced they have joined forces to expand the AutoBody Alliance’s service network of autobody repair facilities throughout the U.S
“We are excited to work closely with the team at Driven Brands because of their influence in the marketplace the past 50 years, as well as their extensive experience in working with both Insurance Carriers and Fleet Companies,” said Steve Bruce, President, AutoBody Alliance.
InsurTech/M&A/Finance💰/Collaboration
Concirrus unveils sanctions module to complete launch of Quest One platform
Concirrus, a provider of AI-powered marine insurance intelligence, has unveiled a sanctions module to complete the development and launch of its Quest One
Concirrus, a provider of AI-powered marine insurance intelligence, has unveiled a sanctions module to complete the development and launch of its Quest One platform.
From what we understand, the platform makes Concirrus the only technology partner to offer fully integrated sanctions, submission automation, an expected loss and risk analysis built on full market data, ESG monitoring, aggregations, war risk monitoring and real-time news alerts, all within one single platform.
According to the announcement, the sanctions module integrates directly into the existing Quest One platform enabling real-time collaboration across compliance, legal, and underwriting teams.
Research
Average CEO compensation across listed P&C (re)insurers and brokers rose by 17 percent to $8.6mn in 2023, analysis by The Insurer shows.
Average CEO compensation across listed P&C (re)insurers and brokers rose by 17 percent to $8.6mn in 2023, analysis by The Insurer shows.
Our study of a group of 66 listed global (re)insurance companies found 51 CEOs within the cohort received higher remuneration last year compared with 2022.
The analysis shows Chubb’s Evan Greenberg was the highest-paid CEO in 2023 following a 10 percent year-on-year increase in his total compensation to $27.7mn, with 43 percent of his remuneration paid in cash.
In 2022, Greenberg ranked in third position, behind AIG’s Peter Zaffino and Marsh McLennan’s departing CEO Dan Glaser.
Zaffino’s 2022 package was boosted by a special restricted stock award of $50mn related to his new five-year contract, signed in November of that year.
In compliance with Securities and Exchange Commission disclosure rules on annual executive pay, the special restricted stock unit grant was reported in full at the date it was granted (despite only vesting in full at the end of Zaffino’s new employment contract on 10 November 2027), bringing his total remuneration to $75.3mn in 2022.
Meanwhile, Glaser had been rewarded with a 44 percent increase in compensation in his last year at the helm of Marsh McLennan, taking his total package to $30.9mn for 2022.
A more normalised picture in 2023 saw Greenberg return to the top spot, with Zaffino falling to second place with total “as reported” compensation of $24.6mn.
Meanwhile, John Doyle – who took over the top job at Marsh McLennan in 2023 – received $19.1mn in compensation, ranking in sixth place.
Third place in 2023 was left to Aon’s Greg Case, who advanced three positions following a 20.3 percent rise in annual remuneration. FULL REPORT
AI’s Role in Unlocking Claims Efficiency
Insurance companies are increasingly turning to their claims departments and seeking ways to optimize them. Amidst rising claims costs, claims teams are expected to become more efficient and productive, all the while delivering excellent customer service.
To better understand how claims teams are responding to these aims, we asked our claims community a number of questions based on short-term strategic initiatives. With regards to improving the overall customer experience of interacting with the claims function, our respondents indicated two primary strategies; combining seamless digital experiences with human touch points, and using emerging technologies – such as generative AI – to streamline internal processes. These were identified by 40% and 36% of respondents respectively, and as figure 1 illustrates, were considerably more popular than other strategies within our selection.
CCC predicts continued costlier hail and hurricane damage repairs this year
There were significant increases in repair times and costs due to storm-related damages in 2023 and it’s bound to get worse this year, according to CCC Intelligent Solutions’ Crash Course Q2 2024 report.
The Q2 edition focuses on how severe weather events, particularly hurricanes and convective storms, impact the auto insurance and collision repair industries. It’s based on information from 300 million claims-related transactions and millions of bodily injury and personal injury protection/medical payments (MedPay) casualty claims processed by CCC customers.
Hail-related auto claims rose to 11.8% of all comprehensive claims last year, up from 9% in 2020, with average repair costs for vehicles increasing by 15% over the past three years.
‘Great Resignation’ Enters Third Year as Workers Embrace AI, Upskilling, PwC Says
The proportion of workers who expect to switch employers in the next 12 months is higher than that from the “Great Resignation” period of 2022, a PwC survey of the global workforce found.
Around 28% of more than 56,000 workers surveyed by PwC said they were “very or extremely likely” to move from their current companies, compared to 19% in 2022, and 26% in 2023.
PwC’s 2024 “Hopes and Fears” survey also showed workers are embracing emerging technologies such as generative artificial intelligence (GenAI) and prioritizing upskilling amid rising workloads and heightened workplace uncertainty.
Pete Brown, global workforce leader at PwC UK, said employees are placing an “increased premium” on organizations that invest in their skills growth, and so, businesses must prioritize upskilling and employee experience.
Climate/Resilience/Sustainability
Federal appeals court to hear ESG rule arguments in July - Insurance News
A New Orleans federal appeals court is scheduled to hear arguments the week of July 8 on whether the Biden administration's ESG rule meets the legal standard.
The U.S. Appeals Court for the Fifth Circuit is well known for its narrow, conservative interpretation of federal rulemaking. Twenty five state attorneys general are leading the appeal from a lower-court ruling upholding the ESG rule.
The Fifth Circuit notably tossed out the Obama administration's fiduciary rule in 2018.
The ESG rule addresses what fiduciaries can consider when making plan investments and outlines that they may, but are not required to, consider ESG [environmental, social, and governance] factors when evaluating plan investments.
In addition, the rule permits fiduciaries to use collateral factors as a tiebreaker between two or more investments when both investments equally serve the interests of the plan and for fiduciaries to use qualified default investment alternatives that use consider nonfinancial factors, if it is a prudent investment.
In addition to the 25 AGs, the plaintiffs included Liberty Energy, Inc., an energy company, and three individuals, while the defendant was then-DOL Secretary Marty Walsh.
Plaintiffs say that the department’s ESG rule undermines key protections for retirement savings and oversteps the department’s statutory authority under a 1974 law known as the Employee Retirement Income Security Act, which
AI in Insurance
Shift Technology's Generative AI Capabilities Delivering Positive Impact for Global Insurers
Shift Technology, a provider of AI-powered decision optimization solutions for the global insurance industry, today reported that customers using the company's generative artificial intelligence (AI) solutions are achieving significant accuracy and efficiency improvements in claims processes. Shift introduced generative AI into the company's detection products in 2023, tapping its power to extract the most relevant data from a wide variety of insurance documents and convert it into intuitive, targeted and actionable insights for claims handlers.
It is estimated that claims professionals spend more than 30 percent of their time daily reading documents in order to extract the information required to effectively process policyholder claims. This traditionally manual process can be significantly time consuming, often resulting in delays that degrade the policyholder experience. Relying on claims professionals to manually review large volumes of physical or digital documents can also hinder the successful implementation of straight through processing or other claims automation initiatives.
Generative AI is ideally suited to removing this responsibility from a claims handler's daily "to do" list. Real-world implementations of Shift's solutions demonstrate that insurers can achieve over 95 percent accuracy in extraction of key information from documents, providing the knowledge required to progress a claim through the system quickly and efficiently. This level of accuracy also provides confidence that a claim identified for straight through processing does not require human intervention. In the area of subrogation and recovery, Shift's solutions using generative AI are delivering over 90 percent accuracy for liability determination. This has led directly to an average doubling of referral volume and a 30% increase in referral acceptance rate and has helped make recovery efforts faster, easier and more profitable.
To Err Is Human: Using AI and Avoiding Unintentional MisinformationTo Err Is Human: Using AI and Avoiding Unintentional Misinformation
It is time to broaden the discussion about how artificial intelligence (AI) can reduce misinformation in insurance workflows and operations. Conventional views about misinformation focus on bad actors submitting false claim information to reap a financial reward. In those cases, generative AI can help to reduce claims fraud.
However, a less-discussed area of misinformation is actually more common: unintentional misinformation. This can occur during the underwriting and quoting processes, leading to dire consequences, such as wrong or inadequate insurance coverage or no coverage at all. Yet, with the proliferation of AI, there is a real opportunity to correct this type of misinformation and significantly improve outcomes for agents, insurers and commercial insurance policyholders.
Consider this scenario: An agent is guiding a contractor to acquire insurance coverage. The agent asks the contractor a series of questions and does online research about the business. The business gets classified as a concrete flatwork contractor specializing in sidewalks, patios and driveways based on responses provided by the client and the limited information the agent could collect. However, the contractor actually is performing concrete foundation work. As a result of misclassification, the contractor pays a much lower premium than necessary to cover risks, leaving them exposed.
There are two ways such a scenario can occur. First, the client may accidentally provide inaccurate data due to not fully understanding the questions or not knowing the answers. Or, the agent may face a lack of information, perhaps because they didn't ask enough follow-up questions or the answers provided by the client were incomplete.
Whether the eligibility information is incorrect or insufficient, the ramifications can reverberate throughout the insurance ecosystem. Insurers may inadvertently underprice policies, exposing themselves to unexpected losses in the event of a claim. They could overestimate risks based on erroneous information, which can lead to inflated premiums, alienating clients and undermining competitiveness. Or, coverage based on unintentional misinformation could be inadequate and leave the business vulnerable to financial strain in the face of unforeseen events. READ ON
Chris Schrenk is chief underwriting officer at NeuralMetrics
Canada
How big of an impact does the P&C insurance sector have on Canada's economy?
The Insurance Bureau of Canada (IBC) has published its InsurEconomy 2024 report, detailing the significant contributions of the property and casualty insurance sector to job creation and economic growth nationwide.
According to IBC, the P&C insurance industry adds $38 billion to Canada’s nominal gross domestic product (GDP); generates approximately 297,000 jobs; and pays over $12 billion annually in federal and provincial taxes and levies.
The sector also supports the economy by investing in government bonds, holding nearly $39 billion in various government bonds in 2022. It also promotes gender equality, with the percentage of women employed by the industry (60%) surpassing the national average of 48% in 2021.
Meanwhile provincial reports for Alberta, Ontario, New Brunswick, and Nova Scotia were also released.
Celyeste Power (pictured), IBC president and chief executive, commented: “Canada’s P&C insurance industry is foundational to the strength, success, and resilience of the economy. Our member insurers are there for their customers after a disaster, helping individuals and families put their lives back together.
“We all hear about the big disasters in the headlines, and the day-to-day payment of insurance claims, big and small, shows how insurers help Canadians recover. However, few people are aware of the significant impact our industry has in creating jobs and contributing to economic growth across the country.”