September 8, 2015 | Written by: Wyatt Urmey
Categorized: InsurTech | Risk & Analytics
Share this post:
Insurance has to deal with some of the hardest angles of humanity, as particularly in P&C insurance, claims agents are dealing with people at very challenging times, like when they are injured or have incurred substantial damage, or even a loss of a home or loved one. At challenging times like this, expectations are high. Better focus and improved customer experience are becoming higher bars to meet for insurance, as recent research shows that a majority of insurance customers think other businesses are far easier to reach, as well as with which to conduct business. Moreover, millennial customers are much sought after by insurance, but are particularly fickle when it comes to loyalty or investing in insurance in the first place, compared to customers in generations past. Insurance providers need to impress now more than ever.
While technology can’t solve all the issues surrounding claims, new technology offers promise that insurance can more accurately detect inaccurate or bogus claims, allowing providers to concentrate more of their resources on those customers who have undergone real loss and hardship. Insurance telematics offers the possibility to custom fit products that are more appropriately priced for individual customers, and some of that potential is explored in “Capturing hearts, minds and market share,” a research paper by the Institute for Business Value. Telematics makes reference to a collection of technologies that use sensors to better understand individuals. The part of the story that could be further explored is how telematics and mobile technology combined with analytics can help limit the fraudulent claims, which have grown substantially through the last decade.
Why we need telematics
There is increasing evidence that more claims of in-store “falls” are bogus claims, or at the least opportunistic exploitation of the clean-up on aisle 3. In the linked news report, you can see the extraordinary lengths some go to so that they can make a fraudulent claim against a store. Similarly there is also evidence that workers compensation claims increased substantially — by perhaps 50%, according to the Insurancefraud.org — during a similar period. Beyond just the cost of the immediate claims, some of these same fraudulent claims then evolve to permanent disability claims which are a societal and government problem resulting in billions in losses.
This is where technology can help make the difference to ferret out bogus claims better.
How Telematics and understanding of context and location can help
Smart phones unite a lot of sensors, and combined with the growing amount of WIFI networks, beacons, and cameras, as well as other technologies in both the retail and factory spaces, it’s becoming increasingly possible to understand location and context deeply. This helps identify specific behaviors as well as possible risks before they become accidents. Further, when there is an accident, there is data enough to understand events that led to and followed the incident, which can help identify when they are legitimate.
So besides the added value reasons where insurance can share the benefits of the data it must collect and analyze anyway for its actuarial projections of risk. The other potential benefit of taping into Mobile and for insurance to have a robust mobile strategy, is it can help provide benefits that improve customer interactions as well insurance fraud as well as help prove and support legitimate workman compensation claims versus spurious ones.