$170 billion at risk from poor claims experiences – report

$170 billion at risk from poor claims experiences – report

The report found that 31% of claimants were not fully satisfied with their home and auto insurance claims-handling experiences over the past two years. Of that 31%, six in 10 cited settlement speed issues, and 45% cited issues with the closing process.

Dissatisfaction with the claims experience is a key driver in convincing customers to switch insurers. Thirty percent of dissatisfied claimants said they had switched carriers in the past two years, and another 47% said they were considering switching. Overall, the customers who reported dissatisfaction could represent up to $34 billion in premiums annually, or up to $170 billion over the next five years.

AI technologies could improve the claims process, according to the report. For example, 79% of the claims executives surveyed said they believe that automation, AI and data analytics based on machine learning can bring value across the entire claims value chain, from flagging fraudulent claims to damage assessment and loss estimation, reserving, adjusting and more.

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However, the adoption of these technologies has been slow. Only 35% of claims executives surveyed said that their organizations are advanced in their use of these technologies. That could be changing, however – 65% of insurance companies plan to invest $10 million or more in these technologies over the next three years, prioritizing AI-based applications and automation technologies.

The report also said that insurers could cut underwriting operating costs through the adoption of AI technologies, making up to $160 billion in efficiency gains by 2027. With many underwriters currently struggling with aging systems and inefficient processes, the report found that up to 40% of their time is spent on non-core and administrative activities – an annual efficiency loss between $17 billion and $34 billion. Sixty percent of underwriters surveyed believed that improvements could be made to the quality of their organizations’ processes and tools.

“AI is no longer a technology of the future, but an established capability that many insurance innovators are already putting to work to deliver better customer experiences and empower their workforce,” said Kenneth Saldanha, head of Accenture’s insurance industry group globally. “As humans and AI collaborate ever more closely in insurance, companies will be able to reshape how they operate, becoming more efficient, fluid and adaptive. Those that are already moving to leverage AI will be able to create sustained competitive advantage.”