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Improving the Claims Process with Insurance Telematics

 

How can telematics improve claims performance and deliver policyholder value?


The rapid emergence of telematics technology is having a remarkable impact on the automotive industry and, specifically, automotive insurance. Thanks to technological advances in telematics, it’s now possible for auto insurers to craft a realistic driving profile of their clients.

But that’s just the start. In reality, insurance telematics offers the automotive insurance industry and the clients it serves far, far more features. Not only can insurance telematics help safe and responsible drivers save money on their car insurance, but it can help them get back on the road quickly and efficiently after an accident.

Let’s face it, there are few life events more frightening, frustrating and upsetting than a traffic accident. Given the way vehicles are built these days — and the remarkable amount of cutting-edge technology that goes into them — even a minor fender-bender can result in heavy repair bills. Meanwhile, a more serious accident can lead to physical and mental health issues that leave those involved sidelined for weeks, months, or even years. On top of that, those involved in the accident have to deal with an often lengthy and potentially aggravating claims process before getting their vehicles back on the road.

But what if you could take part of the frustration out of the claims process? What if there was a way to streamline the entire process so that it takes far less time and hassle to get a vehicle repaired and back to being road-worthy? And what if there was a way for insurers to accurately determine the nature of an accident and its consequences for all of those involved?

Information derived from usage-based insurance telematics programs and mobile telematics can help with these abundant and significant challenges.

To start, it offers the potential to immediately alert the insurer of an accident. In the short term, that can help in the deployment of emergency services to the scene, an especially important action in cases where an accident is serious in nature. In the long term, it can help make the claims process simpler and easier to complete while preventing costly fraudulent claims from moving forward.

How Can Telematics Help Make the Claims Process Simple?

  1. Telematics provides a great amount of rich data which can help an insurance company process the claim or jump into action by determining the seriousness of an accident and automatically dispatching emergency responders, such as ambulances, fire crews, and police. Early estimates suggest that this could shave many minutes off emergency response times, potentially saving hundreds or even thousands of lives each year.

  2. Accelerometers installed in a vehicle can help determine the extent of the damage and whether the car is still able to drive. If not, an insurance company can make arrangements for a tow truck driver to make their way to the scene of the crash. By accurately measuring the intensity of the impact, accelerometer technology could even give an insurer a rough idea of whether or not the car will be a total write-off or sent for repairs. In either case, the insurer can take the next step by arranging for a rental car.

  3. The use of smart sensors which are now being built into many “connected” cars or easily plugged into the standard 12V DC socket – can help an insurer see what part of the vehicle was affected by the accident. Not only can this help in formulating a clear picture of how the accident occurred — assisting in completing a claim — but it can even help the insurer initiate the repair process. In fact, it’s possible for a repair shop to be alerted to an impending request, allowing them to determine which resources will be required to complete the job. Another benefit: by determining the type and extent of damage to the vehicle, the insurer can quickly determine which repair shop would be best suited for the job, saving time and helping the client avoid having to tow the vehicle from shop to shop.

 

Together, this can help the insurer piece together a coherent picture of what might have happened in the accident, thereby allowing them to determine liability and adjust premiums accordingly. It can also help the insurer predict the types of physical and mental injury that may result from every type of collision. For example, collecting pertinent data through the use of telematics could help an insurer determine that a rear-end collision results in significant neck or head trauma a certain percentage of the time.

This kind of useful information can help insurers provide clients with rapid and carefully tailored service. The benefits to clients of widely expanding the usage of telematics technology are, thus, clear and abundant. But insurers will also see a wide range of advantages to embracing telematics and helping in their development and implementation. Not only will the use of telematics speed up the process of assisting clients come to terms with their accident, but it can help insurers detect and prevent fraud — a problem that continues to hurt the automotive insurance industry. By collecting verified data linking accidents and injuries, insurers can prepare for the legal ramifications of an accident and determine the viability of a client’s claim to injury. By using telematics to investigate claims and compare them to previous cases, insurers can potentially save millions of dollars in legal costs.

With automotive telematics, there’s a huge amount of potential to reduce insurance costs associated with fraud. According to a recent article from the BBC, claims account for roughly four-fifths of insurers’ costs, which means being able to determine which claims are legitimate — and which are completely fraudulent — means a huge amount to each insurer’s bottom line. Even if only one vehicle involved in an accident is equipped with automotive telematics technology, that can go a long way towards helping insurers put together a clearer picture of what happened in the crash and how it might physically or mentally affect all of the people involved.

Jonathan Hewitt, an automotive telematics expert, says the collection of data through telematics is already having a major impact on the way insurers investigate traffic accidents, from the moment a collision takes place to completing a claim weeks or months later. “Telematics provides a much deeper set of data … that allows insurers to do that much better,” Hewitt says. “You can understand the force of the impact, and thus the likelihood of things like whiplash and soft tissue injury.”

Hewitt adds that telematics can stop “ambulance-chasing lawyers” from getting involved in the process and encouraging clients to make fraudulent claims. This gives insurers far more control over the claims process, saving them money and helping honest clients get back to their daily routine in less time. For an insurer, having immediate contact with a client through the use of automotive telematics is “as much about process efficiency as it is about financial efficiency,” Hewitt insists.

 

White Paper - Building a Business Case for Insurance Telematics and UBI

White Paper - Building a Business Case for Insurance Telematics and UBI

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