In the last few years, the insurance industry has evolved and exploded in its application of technology for policy-related processes. According to a 2021 article by Statista Research Department on InsurTechs, 310 Insurtech startups exist in the United States, and the value of capital invested in global InsurTech companies is $14.5 billion.

COVID-19 also thrust technological inefficiencies into the forefront as carriers scrambled to find new ways to meet customer needs and ensure the health and safety of its policyholders and employees during the global pandemic. Insurance professionals sought out additional innovative data gathering approaches to make more touchless underwriting and claims processes. However, abandoning human touchpoints or eliminating policyholders from the procedure could have adverse effects, both to the customer experience and for the carrier’s bottom line. Striking the balance will be imperative for carriers moving forward.

A Need for Change in Data Gathering

Keeping track of policy data on paper, in emails, on thumb drives, and in other places can make it difficult for insurance professionals to stay organized, efficient, and accurate. Photo Credit: “Bookkeeper” by Oliver Menyhart / CC BY 4.0

No one will argue that switching to more advanced techniques wasn’t a necessary and beneficial change for most industries, including insurance. Nearly gone are the days of door-to-door insurance sales agents, paper-based form submissions, and rudimentary property sketches. They’ve been replaced by a variety of marketing methods through various platforms, electronic underwriting and claims filing, and modern imagery or digital drawings of properties.

InsurTech capabilities have delivered methods to streamline data gathering processes and improve customer experience with portals and pre-filled forms that can be accessed through computers, phones, tablets, and other devices. This makes it easier for policyholders to submit underwriting and claim information and for insurance professionals to access and archive it.

In lieu of sifting through email exchanges, images, attachments, and other files to organize whatever information was provided, carriers can put more focus on making sure they have all the data they need for a policy – and that it’s accurate.

(Validated) Claims and Underwriting Data at Your Fingertips

Artificial Intelligence (AI) and machine learning add new elements to the data gathering processes. Insurance services companies and carriers can tie in information, including property history, living space calculations, weather and hazard data, and structure profiles, from integrations with third-party sources.

Just like a policyholder can control various smart devices through their phones, InsurTech companies are making it possible for insurance professionals to have more validated data available to them. Photo Credit: “Smart” by Gerd Altmann / CC BY 4.0

Predictive modeling may help insurance professionals filter through the data faster and more efficiently to pull out key data points and make risk predictions based on claim and underwriting trends. These aid carriers in identifying high risk claims or policies that could negatively impact their book of business. It also enables them to make more accurate settlements and premiums.

Communication between the carrier and policyholder has also improved through technological advancements, including texting, phone calls, and messaging. Additionally, payments can be made electronically rather than waiting for the mail and then a check to deposit.

These innovations provide more accurate decision-making, consistency, efficiency, and convenience, but problems may still exist.

The Importance of Human Participation and Oversight

Regardless of technology automating processes, a human is still a key component. Photo Credit: “Arlington Research” by Arlington Research / CC BY 4.0

Even with all the available data, there are many cases of incomplete and inaccurate information being provided for property characteristics, equipment pricing, and other details that can only be obtained through onsite assessments and inspections or desktop reviews completed by a person. The best claim damage assessment process to ensure carriers are only settling for a covered peril is having experts who can fully inspect the equipment in front of them. They use testing based on engineering best practices to determine cause of loss and scope of damage more accurately.

Technology isn’t sacrificed using this method. Applications and portals ensure inspections are complete and consistent. Plus, the assessor can submit all information, including images, through a device before ever leaving the premises, which increases efficiency.

The same linking of human aspects and technology can be used during underwriting. Some experts in 2015 were speculating a demise to the role of underwriters because of technology, with underwriters even included in the Forbes list of 10 most endangered jobs in 2015. But even then, just as much as it is now, it was clear neither underwriter nor adjuster positions should be eliminated.

Artificial intelligence and predictive modeling can go a long way – but only to a point. Without having someone looking for outliers and inaccuracies, wrong information could still get through to carriers and impact decision-making.

One such consequence is that insureds could take advantage of the lack of oversight, which could result in an increase of fraud. Quality assurance should take place for data integrations and variant information, requiring a real person to review it and take the necessary steps to reach an accurate solution.

By removing the policyholder from the process, insurance professionals may be cutting off a valuable resource, particularly during underwriting. Through self-assessments made possible through technology, insureds can validate property data, report any changes made to a property, and provide their own images without the carrier needing someone onsite. Supplementing data gathering with self-assessments can also fill in the blanks for what’s missing or incorrect.

Furthermore, not every policyholder is ready to eliminate the human element. While technology has improved speed, many still want to make the connection with someone to ensure a person is handling their policy and claim with knowledge, experience, and care – rather than simply as a policy number.

Technology continues to evolve and make the insurance industry more consistent, efficient, and accurate. While innovations will only continue to improve, strike the balance and keep policyholders, insurance professionals, and third-party partners as part of the equation.

CCG IQ leverages the crossroads of insurance expertise and technological innovation to support carriers throughout the life cycle of a policy. Its suite of services, including HVACi, StrikeCheck, and CCG IQ Underwriting Solutions, rely on a network of thousands of experienced professionals nationwide to provide expert analyses on damage assessments for commercial and residential claims and loss control inspections for underwriting for personal and commercial lines policies. Our self-assessment capabilities keep policyholders as part of the underwriting process and are a valued resource during data gathering. Customized technology ensures all reports include validated best-in-class data and are consistent, efficient, and actionable. Learn more about CCG IQ and how its brands provide better data, processes, and results for all types of carrier needs.