accident severity rates, fueled by rising
repair costs, and it’s hardly surprising
that major auto insurance companies
are now bleeding money.
So what can claims managers do?
They can turn to modern, technology-based solutions.
Instead of relying on the same old
cost-cutting methods (e.g., trying to reduce vendor fees, cutting corners and
asking staff to do more with less), they
can adopt modern technology that lets
them unify the claims process by integrating all its vital components into one
platform. Adjusters now have a wealth
of data at their fingertips, allowing them
to settle claims faster and more accurately. In turn, this helps them deliver
better customer experiences — experiences that will encourage more customers to renew their policies.
Adopting the new platforms will require claims managers to adopt a different mindset, one that focuses on measurable, long-term outcomes instead of
short-term “phantom savings.”
Caveat: Tech solutions must
be intelligently applied
Although new technologies can improve
both the accuracy and efficiency of adjusters, it’s important to realize that
the technologies themselves are not a
panacea. In fact, dispatching them as
cost-cutting cure-alls can produce truly
For example, some auto insurers are
aggressively using self-service mobile
apps in ways that are completely inap-
“Quick Fixes” for Rising Auto Claims Costs
May Leave a Dent in Carriers’ Wallets By ErnIE BrAy
WHEN FACED WITH changing dynamics or imminent disruption, business executives tend to respond in one
of three ways:
1. Many will simply do more of what
they’ve always done, putting their
tried-and-true “success formulas”
2. Others will wait for the “dust to settle” before taking action.
3. A few bold explorers will seek out innovative new solutions.
Faced with falling profits caused by rising collision repair costs, claims counts
and accident severity, many auto insurers are tempted to choose response
#1. Despite the availability of modern
technology platforms that can dramatically lower costs and improve adjuster
efficiency, claims managers may be
tempted to rely on the “usual suspects” — quick cost-cutting fixes that
have worked in the past. But this time
around, these quick fixes may cost auto
insurers more money than they save.
Worse: they may also damage customer
service and retention efforts.
From 2008 to 2014, auto claims managers were accustomed to relative consistency in loss payouts. Auto insurers
enjoyed relatively flat accident and severity rates, as well as decreasing loss
frequency, thanks in part to high gasoline prices.
But times have changed. Starting in
2015, gas prices began plummeting,
which encouraged more Americans to
hit the highways and led to an increase
in accidents. Add to this an increase in
propriate for this method of inspection
(MOI). (The apps allow vehicle owners
to take their own photos of vehicle
damage. Estimates are then written in-
house or by an outsourced vendor.) Self-
service and photo estimating solutions
have their place, but using them without
regard to accident severity or claim facts
is guaranteed to produce bad results. It
should come as no surprise, therefore,
that some insurers have been drowned
by tidal waves of supplements after
writing almost every damage estimate
from vehicle owners’ photos. This is an
example of why technology must be in-
telligently applied given the inherent in-
accuracies of a photo estimate beyond
simple niche type losses.
Sooner or later, every claims manager
will need to embrace a modern unified
claims platform. By integrating systems
such as ACD’s AutoLink® , auto insurers
gain the ability to intelligently dispatch
and route claims efficiently. Through
easy-to-use modern technology, ACD is
able to connect clients with the proper
MOI for each claim to achieve the best
outcome — every time.
It is the intelligent application of these
visionary platforms that makes them such
powerful cost-containment tools. And unlike the quick fixes of yesteryear, their
benefits are immediate and long lasting.
Ernie Bray is the CEO of ACD.
CLAIMS VENDOR SHOWCASE
Editor’s Note: The following pages encompass a special presentation that will enable you to evaluate a number of offerings from
vendors in the claims-handling arena. In an effort to give you expanded, in-depth updates about various vendor products and services,
we invited suppliers to provide detailed descriptions of their offerings. The inclusion of these presentations in no way constitutes an
editorial endorsement of the products and services included here. They are offered in an effort to help our readers make intelligent,
reasonable decisions on the basis of their individual requirements/needs, and budget allowances. We hope you find it helpful.