It is unavoidable that continued automation in the insurance industry is in our future. Nearly every industry is being turned upside-down by recent developments and implementations of artificial intelligence technology so why should the insurance industry be any different. According to a study by McKinsey Global Institute, as much as 45 percent of labor in the United States could be automated by merely implementing current off-the-shelf technology. Their affiliate, McKinsey and Company, further expounds on this finding by claiming that within the next 10 years as much as 25 percent of the insurance industry may be replaced by automated systems.
Let’s take a few minutes to look at how this most recent push for computerization of the insurance industry affects both sides of the labor equation – the insurance appraiser and adjuster. While difficult to answer with surety, I believe these forthcoming changes will not lead to mass layoffs but rather to an opening of doors for these key segments of the claim transaction.
The Current State of Industry Automation and Why it’s Good
Elon Musk, founder and CEO of Tesla and SpaceX, was recently quoted saying, “Humans are underrated”. This simple statement, made by a man known for his progressive and creative use of technology, makes a very direct observation in that humans are in no danger of being replaced by machines in the near future.
While the media and pop-culture have overblown the successes of artificial intelligence and machine learning, many of the shortcomings of job digitalization have been kept quiet. Renaud Million, CEO of SPIXII, on the topic of claim automation said this, “No, I don’t think they’ll ever be fully automated. Some claims, like a dent in your car, will be. But for any business-related or infrequent claims, they’ll most likely always be handled by humans”. I completely concur with both these statements and sentiments. While there will be a replacement of the mundane there will also be an opening of something more targeted towards the skills uniquely human – intuition, empathy, understanding, deduction and critical thinking.
It is undeniable that the entire insurance vertical is trending toward increased use of technology systems. Naturally, CEO’s of major insurance companies have to look toward these new concepts in order to keep their product relevant to consumers and the changing marketplace. Like myself and how I view this phase change at SCA, these CEO’s should not focus just short-term gains of a smaller workforce via increased technology but rather how the whole process can be overhauled to provide the best experience for the customer. To worry just about employee bottom line costs misses the point of why repetitive task replacement is the best thing you can do for your human workforce.
Already we are seeing on both the underwriting and claims side that drone technology is literally giving adjuster a bird’s eye view of properties from the comfort of their desks. With speed and ease, drones have replaced the need for having someone crawl onto a roof, scour a flooded area or photo an intersection. This improves customer service and keeps adjuster jobs intact. What about something more fundamental such as the impact on telecommunication – how does this help adjusters? No hold time for inbound owner phone calls is a great start which leads to overall customer satisfaction with the claim process. A machine like IBM’s Watson can have 100’s of conversations simultaneously and will provide consistent and accurate information. Computers don’t get stressed about their workloads; have a dozen policy holder phone calls to return after lunch; or worry about the time spent on a call answering questions asked about the process. These tasks are meant for a machine to handle so as to free the human adjuster to provide empathy, understanding and caring when needed. Taking out the mundane calls will allow the human adjuster to provide live video assistance right after an accident when the policy holder needs someone to help calm them down and make them feel safe. Computers will not replace claim adjusters, just help shift them to an area that matters.
The app revolution has already begun in our vertical. Writing an appraisal without personally viewing the vehicle damages is nothing new to the industry. This seemingly modern trend is just an updated workflow from the days of Polaroid’s and has not caused a reduction in the need for appraisers. By design, desk estimates specifically need a human appraiser to write the sheet based on knowledge and intuition about the damage. This is a perfect example of talent refocus as opposed to replacement. Let the machine write the hail or small dent claims so human appraisers can focus on the ‘Managed Middle’ type of estimates where they excel and machines don’t. How about appraisers having a telephonic system that could make all appointment phone calls while setting their daily schedule based on windshield time reduction? What if an automated aerial drone could help direct the appraiser to a specific vehicle in a gigantic tow lot or total loss yard thus saving time and frustration? What if while the appraiser is driving from vehicle to vehicle the estimating system is churning away locating the best pricing and part options? These are all currently possible, I know, because SCA uses them! The future is not replacement but rather collaboration based on each parties’ expertise.
The Future & Getting Ahead of the Curve
Just as the invention of the telephone greatly affected the lives of telegraph operators, so too will technology innovation greatly affect the lives of insurance adjusters and appraisers. The savvy telegraph operator, upon hearing of the advent of telephone technology, would have looked for ways to stay relevant in an ever-changing industry by looking at the intersection of skill sets. In short, the future is in the hands of the savvy insurance adjuster and appraiser. Those that refuse to adapt, whether by direct intention or by merely being unaware of changes in the industry, will find themselves bucking the modernization train and getting left at the station. Those that quickly adapt to new technology and keep current with advances in the industry will find that automation of the claims process will mean a higher degree of work satisfaction through job relevance and skill set focus.