CEO Sees Product Moving in Same Direction as Uber App
New software released by IAS Claim Services, a nationwide independent insurance adjusting company, promises to cut the time it takes to assign claims as well as processing time, according to CEO Larry Cochran.
He said the software will make it easier for field adjusters and quality control personnel to do their jobs.
The San Antonio-based company handles third party administration, large loss, commercial loss adjusting, personalized and catastrophe claims.
The product innovation came about as a result of a suggestion from a top IAS client.
“When we asked them what the next big opportunity to make improvements in the claims process, they said…the biggest challenge and opportunity is with respect to the way claims are assigned to adjusters,” Cochran said. “We’re currently using Claimatic with all the assignments that come into our company, across all lines.”
Nature of Claims
Insurers assign claims based on the nature of the claim, the complexity, the loss location, the adjuster’s skill set and location and the availability or capacity for the adjuster to handle that, he said.
“It typically takes a human being that has some level of skill and experience to evaluate that claim and say, ‘OK, this is a commercial or this is a personal lines claim. This is a claim that is going to require a ladder assist, or this flood’s going to require a flood certified adjuster or this claim is going to require someone with a roof certification or someone with a license in various states,'” said Cochran.
“It may be a claim that requires a rope and a harness certified adjuster, because it’s on a steep roof. If so, then it’ll also go to the data bank of adjusters and search only for those that are rope and harness certified.”
According to Cochran, running through that logic can take up to 20 minutes for an individual claim.
“If you’re only dealing with a few claims that are coming in every hour, it’s pretty easy to handle that kind of decision-making and then really mapping it out and saying, ‘OK, this is definitely the most efficient resource and the best resource to handle that claim,'” he stated.
Problems arise when there is a spike in claims, such as during storm season.
“That process becomes pretty overwhelming because the claims come in at such a rapid speed,” said Cochran. “It’s just impossible to ramp up the resources you need internally to make each of those independent decisions to assign to the optimal field adjuster.”
The company developed logic that was programmed into an algorithm that takes information from various data repositories. The logic can read the loss notice, get the important information off of it and then scan other databases that have personnel information.
The software can be fine-tuned with each individual adjuster’s availability based on what is known about their capacity.
“Some adjusters turn claims faster than others, and that’s just the human nature of this business. We can put that threshold wherever we want to in the system,” Cochran said. “Claimatic will run through the algorithm, searching all of the information from the client’s claim through the personnel information and automatically assign that claim to the best adjuster. It can do this in just a couple of seconds at the most for each claim.”
The difference in assignment time is that humans get tired and frustrated.
“It’s amazing how much more effective it is at clustering claims for an adjuster in a really tight radius, versus when you take a person, a person will do a pretty good job usually for a dozen claims or so. Then, they start to wear down, as the claims just keep piling up, they’ll just start dumping, ‘OK, I’m going to put these 10 claims or these 30 claims with this person and then that fills them up and I’m going to move to the next person,'” said Cochran.
Before, the average drive time for claims could be 30 minutes or more as adjusters crisscross one another throughout the day in the same area.
The program can also identify a complex loss and kick it out to a manager for assignment.
Once it’s made the assignment, it will send an email to the manager responsible for that claim letting them know who the claim was assigned to.
Depending on the client’s choice, an automated email can also be generated and sent to the insured providing the name and contact information for the assigned adjuster confirming receipt of the claim.
Cochran said savings are seen in a number of areas including drive time and manual claims assignment time reduction.
“There has been about 20 percent reduction in overall time in process for our claims,” he said.
The company plans to license the software to insurers later this year. Cochran said there are likely two different components of value opportunity for companies.
The first is labor cost savings.
“When you can turn claims 20 percent less, you’re going to save on that labor cost per claim by theoretically that much. You’re also going to be saving on the cost associated with…travel, fuel, depreciation, those kinds of costs, because you’re going to be cutting down the average drive between claims,” Cochran said.
The second is the reduction of costs associated with assigning claims.
The IAS CEO said that most excitement is centered around what insurers see as improved customer service and how that will affect marketing and their ability to take or preserve market share, because it’s so hard to attract and retain quality insureds.
The intent is not only to improve claim file assignment time but also to relay information back to the insurer that can be used later for underwriting.
“We can also show them comparisons from one event to the next, which will show them average drive time, and then all of that overlaid with their loss information, what the average total loss was, claim value and so forth,” he said.
Cochran said he’d like to see this product move in the direction of the Uber mobile app.
“We really see this application and this system moving in that direction, to where adjusters could be driving down from one location to another and receive an assignment that says, ‘You’re within two miles of a claim that came in. Would you like to accept it?’ We’re really excited about all the different opportunities that this can bring down the road,” he said.
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