Coronavirus fast-tracked insurance's digital response to Hurricane Laura

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Before Hurricane Laura made landfall or wildfires engulfed the Pacific Coast, insurers were well aware that the raging COVID-19 pandemic would decidedly alter catastrophe claims experiences and processes.

A harbinger came from a national Allstate survey in late June. It found a quarter of Americans were uncomfortable meeting personally with contractors, insurance claims adjusters or other necessary home improvement professionals amid COVID-19.

Yet reality has proven even more dramatic, with policyholder embrace of digital tools off the charts. “Customer interest in digital and self-service claims handling has grown exponentially this year in comparison to last,” acknowledges Chip Teague, Allstate’s senior claim field director of the national catastrophe team.

It’s a similar story across the P&C landscape, as insurers say their digital efforts combined with the surge in customer adoption are paying off with speedier responses and reduced friction while ensuring pandemic safety protocols are followed.

Drone advances and acceptance increase flights
It starts with customer acceptance of pre- and post-catastrophe aerial imagery, whether captured by satellite or fixed wing airplanes, to rapidly assess home habitability and begin the adjusting process.

“Coming out of Laura, insurers significantly ramped up their aerial utilization for identifying uninhabitable homes and reaching out to their policyholders even before anyone could return personally,” says Bill Banta, general manager of workflow solutions at EagleView, which maintains a database of high-resolution imagery on over 80 percent of U.S. single family residences.

“We’ve seen a five- to ten-fold increase in the number of claims where insurers are comfortable proactively triaging and paying out claims based on aerial views,” he adds. “We saw volumes in Laura’s immediate aftermath of over a thousand claims per day.”

In areas where homes remained habitable, exterior inspections via drones went from exotic to integral post-Laura. “The acceptance of aerial imagery, including drones, has shifted, particularly when we set the right expectations around using such technology to help protect a customer and their health,” says Jarrod Murrieta, head of catastrophe, property strategy, process and national operations at Farmers.

Whether an insurer has its own drones or hires a service, the transition has been aided by advances in drone imaging, software and systems integration. “From the precision of drone cameras to the software that establishes their flight pattern, drone technology continues to improve,” says Schuyler Schupbach, VP of P&C claims at State Farm, which operates its own fleet. “In addition, the capabilities for integrating drone-gathered information into our internal systems have matured.”

Fleet management solutions have also improved says Jim Wucherpfennig, vice president of property claims for Travelers. “We use the cloud-based drone platform Kittyhawk, which supplies on-demand granular visibility such as a drone’s location, who’s flying it, how high it’s flying, whether or not it’s currently taking images and even how much battery life remains.”

For carriers using a service, faster turnarounds for obtaining images contributes to the drone utilization uptick. “This year, we’re receiving the vast majority of images from our service within 24 hours,” says Teague.

Real-time video, analytics and AI enhance self-service tools
Unsurprisingly, the pandemic spurred the post-Laura acceleration using in self-service tools, both via app and websites, including uploading photos and engaging in real-time video collaborations with claims adjusters.

Of these, virtual visits for home inspections have taken off, with adjusters using collaboration technologies to converse live with policyholders and capture video footage of a home.

Much like drones, insurers are taking different approaches. State Farm uses consumer video calling services, such as Apple’s FaceTime and Google’s Duo, to conduct virtual visits, while Allstate and Travelers provide a smartphone app for their customers to download. Farmers offers a browser-based conferencing tool.

To help assist adjusters with selecting between virtual and in-person visits, Travelers is leveraging analytics. “Early in the pandemic we rolled out a predictive model,” Wucherpfennig says. “It helps give our claims professionals confidence they’re selecting the most appropriate adjudication method.

AI-enhanced solutions are also joining self-service toolkits.

For homeowners, the Travelers partnership with HOVER enables a policyholder to take eight photos of their home’s exterior, from the ground, and the platform’s algorithms construct an accurate 3-D model. “The model includes precise roof, walls, siding and windows measurements that we pull into our internal platform,” Wucherpfennig says. “Then we generate an estimate faster which also speeds payment to our customers.”

State Farm is applying AI technology to vehicle claims. Data gathered at first notice of loss is used in algorithms developed by the State Farm technology team to determine vehicle reparability. “Without any physical inspection, the tool tells us whether a vehicle is a total loss,” says Ritesh Saraf, the carrier’s enterprise technology executive. “It’s reduced settlement times by several days.”

On the provider side of the equation, insurers like Allstate and State Farm are expending their ecosystem approaches by introducing self-service and video collaborations options for vehicle repair shops that reduce or eliminate in-person adjuster visits.

Naturally, the ability to use self-service options is dependent on power and connectivity. To help address this need, insurers like Allstate have updated their mobile claims fleets to extend internet access and mobile device recharging to external users in catastrophe zones. In the case of Laura, several Allstate mobile centers are still operating in the hard-hit Lake Charles area.

Backend digital investments are equally key
In addition to customer-facing digital innovations, backend investments have also been key for handling today’s terabyte-intensive catastrophe claims.

For example, State Farm has migrated claims data to the Amazon AWS public cloud. “By moving millions of claims into the cloud we can apply analytics and AI in new ways,” says Saraf. “This ranges from using algorithms to more accurately triage the tens of thousands of claims a hurricane generates to predicting which self-service claims will require more human guidance.”

“Additionally, it streamlines uploading and accessing video files on-demand, rather than using DVDs as an intermediary, he adds. “In short, we can manage, scale and utilize data more adaptably to improve claims experiences.”

Payments have also received a digital boost, with most insurers offering various electronic bank deposit options and, in Travelers’ case, via PayPal. “In addition, we streamline claims payments by simply reversing the method a customer uses to pay their premiums,” says Wucherpfennig.

Ongoing innovation ahead
From an industry-wide perspective, Banta says insurers have learned critical lessons around the urgency of fulfilling the digital-first appetite. “Legacy practices just aren’t aligned with the way customers want to interact with insurers today,” he says.

The numbers certainly bear this out. According to Schupbach, the combined use of photos and video for estimating at State Farm is up more than 200 percent for homeowners and 600 percent for auto claims versus pre-Laura levels.

At Travelers, Wucherpfenning reports approximately 70 percent of all post-Laura catastrophe claims leverage a digital tool, including those with some level of human interaction.

It all points to more digital innovation ahead, as Farmers' Murrieta concludes. “Now that we've learned how adaptable our employees and our customers can be, we’ve a responsibility to challenge our assumptions about the pace of change,” he says. “We’ve learned it’s possible to provide top-tier personal service while expanding our digital offerings and do both in a manner that keeps the health and safety of our communities at the forefront.”

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Catastrophe insurance Claims Drones Customer service Artificial intelligence State Farm Allstate Farmers Insurance Travelers