- Where Insurance & Technology Meet

InsurTech Pairing to Accelerate Claims Automation

By Stephen Applebaum and Alan Demers

Throughout the first quarter of 2020, the InsurTech landscape has remained vibrant. Record-setting venture capital investments, weekly announcements of new insurance/InsurTech deals and lots of excitement is anticipated for all the various InsurTech conferences underway and throughout this Spring.

Over the last few years, the volume of InsurTech developments and offerings has grown exponentially, creating a seemingly endless supply of new concepts, solutions and technologies geared toward making claims better. Many are being implemented and leveraged to help reduce adjustment cost and provide consumers with more choice, greater access and ease during the claim process.  Digital interactions, remote damage inspection and direct-to debit payments are becoming widely adopted with numerous additional features underway and on the horizon making for a strong demand-side of the equation.  Insurers and providers are collaborating at new levels and the appetite to automate and reach a touchless claim process remains a priority.  However, given the supply and the tremendous progress over the last 3 or years some would suggest the tempo to implement and leverage should go much faster.

In a post discussing “Successful InsurTech Adoption” (dated Jan. 30, 2020) Alan Demers outlines how to overcome the common challenges insurers and startups face. One particular obstacle that is constantly expressed from both sides relates to the technology or solution itself, especially when it comes to automating claims. Countless numbers  of new solutions have emerged in recent years in various stages  of maturity.  Insurers often express that the sheer volume of solutions they would like to evaluate  is just too time consuming.  They also say that while many of these InsurTech solutions are impressive, they only solve a relatively small portion of the broader problem at hand – a single puzzle-piece leaving many other still to resolve.  Insurers also understand the significant work it takes to implement a new solution which may require training, workflow and organizational changes just to get started with more work ahead in order to derive the intended benefit.  The bottom line is that this forces insurers to be selective and certainly elongates the decision-making cycles.

InsurTechs are at the mercy of insurers’ decision-making cycles while also facing investor pressure to grow and must remain persistently patient while waiting to make the next press announcement. And they clearly see how their solution will succeed and have real impact if only given the chance. Remember how Ring Doorbell was initially perceived? But, waiting and patience are not a strategy

Time for a new approach: Pairing

As startups continue to develop their solutions and work through the business maturity stages, it is time for more pairings or combining of forces.  By combining two or more InsurTech solutions to solve multiple challenges together, it is easier for insurers to commit.  We believe the timing is opportune for such pairings thereby magnifying combined benefits, creating a true win/win for both sides.

Much of today’s claim process has been enhanced with new features, mainly as individual components.  Examples include; sensors to detect losses, chatbots to aid loss intake, image capture to estimate damages, AI fraud tools, e-payments instead of mailed checks, to name a few.  This approach makes sense as new solutions become available but has challenged claims teams to splice everything together and to manage a portfolio of providers. Likewise, there are numerous remaining manual workarounds or byproducts from implementing a new solution.

The pairing trend has already begun

Successful partnerships and alliances are not novel ideas by any stretch.  Insurance providers have solid track record for acquiring startups.

InsurTechs have lined up to integrate with claim system providers, such as Guidewire and Duck Creek. OE’s and insurers are teaming up on telematics.  Example, recently announced partnership between Ford and Allstate, Liberty Mutual and Nationwide, individually.  Hover and FileTrac announced a partnership just last week, combining 3D photo visualization with a claim management platform.  This is a good example of two separate claim automation features coming together to further automate property damage claims.

Depending where your InsurTech stands today, a good first step is to self-evaluate and gather feedback from claims leaders, innovation teams and others. Consider which features are immediately adjacent and may add value if combined.

There are endless potential pairing combinations to consider which could shape the next phase of the InsurTech landscape.  Like most things, InsurTech alliances are not a one-size-fits-all answer but very much worth exploring in this grow or die environment. At the Connected Claims USA conference (June 24-25 in Chicago), insurance leaders and InsurTech partners will be gathering to learn and form lasting partnerships that will change the game.

About the Authors

Stephen Applebaum, Managing Partner, Insurance Solutions Group, is Chairman of the Connected Claims USA conference on June 24-25, 2020 in Chicago.

Alan Demers is President of InsurTech Consulting and a former insurance claims executive with decades of experience in P&C claims leadership roles. Alan will be moderating Connected Claims USA conference on June 24-25, 2020 in Chicago.