Auto Insurance Ecosystems – The Claims View Part 2 – Daily Fintech

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In auto insurance, processing a single claim event requires a multitude of smaller transactions that involve customers, lenders, collision repairers, auto manufacturers, parts suppliers, medical providers and others. These transactions hinge on an elaborate web of decisions and data, which ultimately shore up transaction costs while increasing the likelihood of fraud and claims leakage. In the U.S. alone, it is estimated that more than one billion days of cumulative claims cycle time (loss date to claim completion date) are lost annually in auto claims.

The complexity intrinsic to auto claims hinders the ability to manage at scale, caused from several underlying factors:

  • Parts proliferation: Repairable parts per auto claim increased 48% since 2010
  • Internal technology: An average new vehicle uses more than 100 million lines of code
  • Connected-car capabilities: 86% new vehicles sold in 2022 with embedded connectivity
  • Advanced Driver Assistance Systems and diagnostics systems: Vehicles receiving a diagnostic scan during collision repair rose 1,000% since 2017.

Increasing complexity is best managed through digitization. Claims ecosystems enable carriers to effectively leverage capabilities to digitize total loss valuations, repair estimates, shop management, repair workflows, medical claims and parts ordering. The key enablers include integrations with ecosystem partners that unencumber information sharing.

Ecosystems comprise of connected digital services that let users fulfil multiple needs on a single platform. End goals of participants vary, ranging from growing core businesses to expanding company networks to end-to-end solutions. Ecosystem players tend to be one of: a)local champions that attract customers by leveraging ecosystem channels b)incumbents that cross-sell new, non-core products/services c)digital start-ups that have built scale with limited products/services and then diversify offerings via ecosystems d)internet giants that diversify offerings, increase touchpoints and capture larger wallet share.

CCC Intelligent Solutions (CCC) is a leading US provider of automotive collision software. As orchestrator of an auto claims ecosystem with carriers, manufacturers, collision repairers and part suppliers, they work with over 24,000 repairers and 350 carriers, processing a majority of U.S. auto repair estimates. A leader in hyperscale cloud computing and photo analytics, CCC pursues growth by cross-selling new products. Using data from beacons, dongles, mobile apps and connected cars, CCC provides insurers the ability to identify when enrolled vehicles are in an accident. It automatically shares information to initiate a claims process, reducing communication bottlenecks between car owners and insurers.

An ecosystem partner, incumbent Allstate redesigned its repair appointment booking workflow using CCC’s Shop Scheduling, enabling four-fifths of customers to book repair appointments the same day. CCC connects Allstate and its consumers with thousands of repair facilities in the Allstate Good Hands Network. The result: Allstate has successfully improved repair appointment timelines and cut cycle time at scale. Cycle time improved by 14% in a year, with nearly 18000 monthly repair appointments.

In APAC, leading AI insurtech Claim Genius has partnered with auto claims ecosystem leader Fermion Technologies for P&C Insurance, an example of a digital startup joining an existing ecosystem. Fermion will incorporate Claim Genius’s real time damage estimates into its TrueSight™ suite of analytics products, making the solution available to its network of carriers spanning 10 countries. Once implemented, clients can get instant estimates for damaged vehicle repair by utilizing photographs or videos of accident vehicles.

There are various digital insurance ecosystem plays in insurance. In past posts, prominent integrated ecosystems such as Vitality, Manulife Move and iptiQ were covered. The value in ecosystem approaches is that insurers leverage not just internal analytics, but also partner ecosystem data to transform customer experiences. Customer journeys are transforming at the speed of technology. Understanding customer needs beyond merely product insights, is crucial to insurers in their digitization and ecosystem journeys. Well-crafted customer journey maps build better understanding of customer experience, in turn helping integrate with and scale ecosystem growth.

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Author: rintupatnaik