Claims Automation and its Impact in the Automotive Industry

Introduction

As AI gets smarter and more efficient, companies are slowly moving towards using AI to automate different processes within their organization. And vehicle Insurance isn’t lagging too far. 

Thanks to advancements in AI, claims processing can be automated to an extent, making the entire process easier, more efficient, and standardized. 

In this blog, we will discuss how claims processing can be automated, the current challenges in the traditional claims settlement process, and how automation is solving this problem. Additionally, we will also discuss the impact of claims automation in the automotive industry and why you should consider it for your business.

Let’s dive in!

Claims processing in the automotive industry

The traditional process of claims settlement is entirely manual, requiring a lot of time and effort, while also being prone to subjectivity and errors. 

When a car owner meets with an accident, he has to first notify the insurance company, file a claim requesting for repair, and finally wait for an inspector to check the vehicle and share a repair estimate before actually sending the car for repair. This entire process usually takes anywhere between 7-30 days i.e. unnecessarily lengthy wait times. 

The complexity of filing a claim begins right from when a car owner meets with an accident. Notifying the insurance company after an accident and then filing for a claim is usually a very complex process and might come with a lot of hurdles (for example, some insurance companies have strict deadlines for filing a claim). 

Additionally, since the inspection process (which is done before the insurance company shares a repair estimate) is also manual, it is quite prone to subjectivity, errors, and fraud resulting in false reports generated during the inspection process. These errors could often end up costing the company quite a lot of money if not addressed properly. 

Put simply, the current claims settlement process is very challenging because of 

• Long processing time since all claims are processed manually and every vehicle requires a thorough inspection to assess the damages. 
• Human Error that arises due to an inspector wrongly assessing the vehicle during the inspection process or because the claimant made some errors while submitting the claim. 
• Fraud that can occur both from the claimant’s side (when they’re trying to hide damages) or the company’s side (who are trying to save some extra money in the process). In fact, estimates suggest that fraudulent claims comprise around 15% of all insurance premiums (source). 
  

How to automate claims processing and what is its impact?

When it comes to automating claims, there are a ton of benefits that it includes, such as improved customer experience, reduced costs, increased trust and loyalty, and lesser room for error due to subjectivity. 

Implementing an automated process for claims settlement is easy in today’s date, thanks to companies like Inspektlabs who are already innovating in this field. Their proprietary AI model is trained on 30M+ images and videos of damaged vehicles to generate reports with 90%-95% accuracy with automatic fraud detection capabilities. 

With easy-to-use solutions like these, you can work towards 

• Improving customer experience by increasing the speed of the process, and giving car owners full transparency of the process, making them feel like they’re in control. This works as a great medium to improve customer satisfaction, which will result in retention i.e. more business in the long run. 
• Saving costs by automating the inspection process, which normally takes a significant amount of dedicated human capital to do this every day. 
• Optimizing human involvement required in different processes because your inspectors are now free to focus on more important tasks in the organization. 
• Improving claim estimation accuracy and reducing fraud by using cloud-based AI platforms to estimate repair costs based on the computer-generated reports that are tamper-proof and free from fraud. 
• You can also integrate your tools with other systems, i.e. further improve your process at different stages. 
  

Conclusion

AI claims automation is becoming a common practice in the motor insurance industry. With the present tech that’s available, companies can easily automate the claims settlement process and improve the customer experience, reduce costs, and cut down on claim processing time. 

Additionally, with enough training data, AI systems will eventually be able to make accurate predictions for faster settlement of claims

With the pace at which technology is evolving today, it won’t be long before AI insurance solutions are 100% efficient, and more and more businesses will want to adopt these changes.