If you attended many of today’s top insurance conferences and webinars, you’d likely think that ‘touchless’ claims is everywhere and is widely used in several lines of business (especially personal auto). It’s a topic that I’ve been researching and writing about for the last year or so. However, I’ve received clients inquiries from carriers who felt their organization was behind their peers on automating the claims process and wanted to know where to begin.
I was curious to quantify the insurance industry’s present attitude and level of adoption toward touchless claims. As such, Celent partnered with PropertyCasualty360 and launched a joint survey. Some topics covered included the current use of touchless claims, expected use in three years, top areas of value from touchless claims, perceived benefits, perceived barriers, customer satisfaction, and use of insurtechs.
Earlier this month, I had the honor of presenting the findings of this exciting survey as a keynote speaker at the America's Claims Executive (ACE) Leadership Forum in New Orleans. In my presentation, I discussed several noteworthy results from the survey. Here are three takeaways:
1. Nearly all respondents acknowledge the value of touchless claims, but relatively few of their organizations use it
A whopping 97% of respondents said they found at least some value from touchless claims. In response to the question “what is your overall perceived value from touchless claims?”, 28% said “extremely valuable,” 20% said “mostly valuable,” and 50% said “valuable in certain cases.” It’s clear an overwhelming margin of folks think touchless claims have at least some value.
However, when asked “to what degree does your organization use touchless claims?” only 10% of respondents said they were making “significant use,” and 23% said they were making “some use” of touchless claims. A logical follow-up question may be if so many carriers believe touchless claims are valuable, then why are relatively few of them using it?
2. Large carriers are significantly more likely to use touchless claims
When asked, “To what degree does your organization use touchless claims?”, 50% of Tier 1 (>$5B DWP) carriers said they were making “some use”, yet only 14% of Tier 5 (
One possible explanation is that smaller carriers feel a significant “front-end” investment is needed to automate the claims process, and they simply don’t have the budget. While this may be partially true, the cost savings from ‘going touchless’ may be material in the long run. Another explanation is that smaller carriers believe what may distinguish them from brand-name insurers is the level of customer service. They may feel that automating the claims process may impersonalize the experience and lead to losing one of their great value-adds.
3. Perceived barriers to the adoption of touchless claims are different from those in executive roles and non-executive roles
The survey asked respondents to rank a list of 8 potential barriers to adopting touchless claims from 1 (biggest barrier) and 8 (smallest barrier). The most significant barrier for executives was “difficulty integrating with legacy core systems” while “concern about increased fraudulent behavior” was the number one concern for those in non-executive roles.
For carriers with legacy core systems, it may be useful for them to explore purchasing a claims management solution that they can wrap around the claims workstation. As such, they can create a layer that wraps around and allows them to create business rules without entirely replacing the core system.
Regarding the concern around fraudulent behavior, it’s interesting that it’s the top concern for non-executive respondents but the third most significant concern for executives. The gap illustrates that there may be organizational buy-in issues, and carriers should make an effort to hear out and address non-executive staff concerns about automating the claims process.
Overall, while touchless claims have clear percieved value, the road to industry-wide adoption may be longer than anticipated. This finding may be good news for some carriers as, through claims automation, they have an opportunity to distinguish themselves from many of their peers and reap the benefits of going touchless.
Stay tuned for a complete report of my survey findings and possible explanations for these phenomena coming out later this month.