Move Over Adjusters and Underwriters, the Bots Are Coming

By Denise Johnson | June 6, 2017

As more bots handle claims and perform underwriting tasks, should human employees be concerned? Industry experts say there’s no need to worry.

Insurers in the U.S. and overseas are exploring the use of chatbots in their operations. According to Dawn Mortimer, assistant vice president, IoT/Telematics Claims Product Management for Verisk Insurance Solutions, insurers are looking to adopt artificial intelligence more and more, with bots doing some of the decision-making.

Geico’s new mobile virtual assistant, Kate, can answer questions about policy coverages and offer billing information. SPIXII sells motor insurance policies via a chatbot in a few European Union countries. Lemonade offers two chatbots, Maya underwrites policies while Jim handles contents claims.

“We’re seeing a lot of insurers really asking us to help make sense of the technology and find the application to the insurance value chain,” said John Cammarata, vice president of development at PointSource, a design and development firm headquartered in North Carolina that focuses on digital transformation. “They hear a lot and see a lot around chatbots, but they don’t necessarily know how to apply that technology.”

The company aids insurers by either working with them through an eight-step digital transformation framework or by helping with just a few of the steps. Some of the stages of the digital transformation framework include strategy, architecture, experience, process and culture transformation deployment.

Typically, insurers will leverage vendors and outsource the technology. Cammarata suggests insurers look to competitors to see how they are using bots. He said insurers are encouraged to examine patterns within their insurance value chains where chatbots could be used, such as quick quote pattern for sales and distribution, providing a natural language interface to answer policy questions and for processing payments.

Most of the interest is coming from personal lines insurers, Cammarata said. Homeowners insurers are especially interested in virtual assistant patterns, because their current digital experience is not meeting their customer expectations. He said a chatbot could walk a customer through policy questions all the way to policy issuance.

Claims Application

In claims, insurers are considering bots from first notice of loss through payment. PointSource works with insurers to examine issues that may occur during the process to try and resolve them. In claims, the company is working with insurers to evaluate all of the hand-offs and steps that occur during the claims process. Cammarata said that of the insurers he’s worked with, 60 percent of the calls they receive relate to the status of a claim.

“They just simply want to know…the status and if they should be doing anything,” he said.

Cammarata said chatbots can be leveraged to increase employee productivity, answering questions so the human adjuster can concentrate on more complex matters.

In a March 2017 blog, Donald Light, the director of Celent’s North American P/C Practice, highlighted a few ways adjuster bots could be utilized to process auto claims.

Bots could connect to the electronic control units (ECUs) in connected cars and transmit information after an accident to an insurer. The ECUs monitor diagnostics of virtually every major system in a car, he said. Some manufacturers are already installing cell phone modems in cars, he added. This allows instant communication between a bot and the car.

“It can open a line of communication with the driver directly. If there’s an indication that airbags have been deployed, it can notify police and/or medical assistance,” he said. In addition, an initial repair estimate and contact with a direct repair program could be initiated.

He said the bot could communicate with the policyholder or claimant via a video that is made specifically for the event. It could provide necessary information on the claim and provide information for an auto repair facility.

Light said it’s likely that once adjuster bots handle auto claims, property claims will soon follow.

Though bots may increase claim closures boosting department efficiency, Light doesn’t see an army of bots replacing human adjusters anytime soon. He sees bots handling first notice of loss claims, while adjusters will still be needed to handle injury claims. In addition, he said, the information contained within an ECU could be ambiguous or rendered useless due to a crash requiring a human adjuster to step in to handle the claim.

There is also the possibility that an ECU wouldn’t pick up information on a low impact collision causing minor bodywork damage, he said. In the case of the video, the policyholder or claimant may opt out, choosing instead to speak to a human adjuster.

Some issues Light foresees in the use of adjuster bots includes whether they can deliver the correct information and conduct assessments as good or better than a human adjuster can.

Cammarata said top insurer concerns relating to chatbots center on legacy systems, cost and lack of knowledge on user expectations which can vary by demographic.

“Consumers are searching for an experience that gives them access to information when they want it, how they want to interact and kind of on their own terms and timeframe,” said Cammarata.

PointSource uses moderated or remote user focus groups in specific demographics to help insurers understand their expectations, he said.

As insurers look to adopt bots for a variety of processes, they’ll need to allay current employee fears.

“I know some carriers and some claims people…are worried that these bots are going to take over and there’s not going to be…a need for them,” said Mortimer. “I totally disagree with that perspective. These bots take…simple claims off the hands of the human adjusters, so they can focus on the claims that need their attention.”

Latest Comments

  • June 15, 2017 at 4:30 pm
    Jayant says:
    Don't like the title but agree with the content wholeheartedly. Bots/AI are all about scaling up our ability to be compassionate towards injured workers. The more tools we pro... read more
  • June 12, 2017 at 10:50 am
    New Revenue Growth Opportunities For TPA Claims Management Companies...Feasibity Study for Alternative Risk Insurance Products TPA Competition Heating Up

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