Insurance 2023 – “Deep Field Research” Explores Hype vs. Reality
Last December, I found myself stranded on the side of a dark highway in Northeast Georgia.
What could have been an emergency turned into an opportunity to test predictions I had published in the past when “Insurance 2020” was the distant future.
The results were not what I expected.
An Unplanned Stop on the Way Home from Grandma’s
I was driving with our kids, returning from a visit with Grandma in Florida. It was dark and after 10 PM as we cruised along the highway at 70 mph, but traffic was light, and we were less than an hour from home. Most of my kids were sleeping.
My kids will tell you they were startled awake by a loud “thud!” Jack, my son in the passenger seat, watched transfixed as an antler shattered the headlight in front of him. As the driver, I only had time to think “Oh, deer!” as a buck trotted into the beams of our headlights. After the impact, I watched in morbid fascination as the deer flew through space, tumbling head over hooves for what seemed like minutes before it sailed off into the darkness.
At first, our stout SUV seemed unfazed and kept running normally. Then the engine temperature started climbing. By the time I pulled over, steam was billowing from under the hood.
Remember how futuristic “Insurance 2020” once seemed?
When I began working as an analyst, “Insurance 2020” was the distant future – fertile ground for long-term predictions. We envisioned a complex dance of intertwined technologies – SaaS platforms, the IoT, drones, autonomous vehicles, big data, AI, blockchain (add your favorite buzzword here) – all working at the speed of digital to meet the needs of policyholders and insurers. Claims that once took weeks would be settled in minutes – even seconds! In fact, many claims would be avoided before they even happened. We had no doubt that, by 2020, “digitalization” would transform the industry.
An Opportunity for “Deep Field Research”
My kids and I were thankful that none of us had even a scratch. As we sat at the side of the road, and realized we were in an inconvenience, not an emergency, the gears started spinning in the geeky analyst part of my brain. “Hey! Remember all those cool Insurance 2020 scenarios? It’s 2023! This is a research opportunity. Let’s see how well those predictions panned out!”
On the road in 90 minutes
Moments after we stopped, I received a call on my mobile phone. It was my insurance company, calling to see if I needed assistance! After checking to make sure we were OK and verifying some details, they assured me help was on the way.
In less than an hour, a tow truck drove up followed by a full-size SUV - a rental vehicle for us. We transferred ourselves and our luggage to the rental while the tow truck loaded our wrecked SUV, and then we resumed our drive. On the way home, I received a text from our insurance company – they would contact me the next day with the results of their inspection.
Day 2: Claim closed
Early in the afternoon, I received a call and an email from our adjuster. The deer had smashed deep into the engine compartment before ricocheting out into space. There was so much damage to the engine and body that our SUV was a total loss. The insurer would pay out the value of the vehicle per a third-party appraisal, less our deductible. I was impressed with their speed and the fairness of their settlement amount. By the time we finished the call, the payment was in my checking account.
Day 4: Sporting New (Used) Wheels
Two days later, after my wife drove up from her mom’s to rejoin us, we test-drove a couple of used SUVs available through our insurer’s certified partner network. We settled on a used SUV that was a little newer than our old one.
We were thankful that nobody was injured, our claim was settled quickly, and we were rolling again in a matter of days.
So, what really happened was…
That seemed plausible for an ideal insurance claim experience in 2023, right?
Pretty tame, actually, considering some “future of insurance scenarios.” No drones. No autonomous vehicles. Barely a hint of the IoT.
That’s not what actually happened, though. Here’s the real story…
On the road in a couple of hours
After pulling to the side of the road, I rifled through our glove compartment, found our Insurance ID cards, and called my insurer. (I have my insurer’s mobile app, but I haven’t used it since I installed it, and I couldn’t remember my password.) The call center rep checked to make sure we were OK, then gathered the accident details and dispatched a tow truck to us.
I texted some close friends to ask for help getting home. Thankfully, they were available and on the way in minutes. We arrived home about two hours later than planned. The next day, one of our friends gave me a ride to pick up a rental vehicle. My policy only covered a compact rental, so I paid out-of-pocket to upgrade to an SUV our family could fit in.
Day 11
Our rental was only authorized by my insurer for two weeks, and my wife had returned from her mom’s with our other car, so we returned the rental.
Day 17
After playing phone tag for a couple of days, our claims adjuster reached me by phone. He reviewed the estimated damage and settlement amount. Unable to use the checking account linked to our policy, he needed a debit card number for the electronic payment, and I didn’t have my card with me. So he said he would send us a check in the mail.
Day 24
We received and deposited the check from the insurance company.
Day 61
The collision repair shop had a backlog of a few months, but they had made our SUV a priority because it was disabled. They sent a text to confirm repairs would start the following week.
Day 69
The collision repair shop found additional damage to the vehicle body and various engine components. They reached out to our insurer to process the supplemental damages.
Day 94
Our claims adjuster called with the news that the additional damage made total repairs greater than the value of our SUV. It was now considered a total loss. My claim was being transferred to a different adjuster, a total loss adjuster, to be processed.
Day 96
We drove to the collision repair shop and recovered all remaining personal items from the wrecked SUV. One of the folks at the collision repair shop commented that the total parking fees our insurance company owed for our wrecked SUV were over $2,500 and counting.
Day 110
Our total loss adjuster called to review our final settlement amount. The valuation and final settlement were very fair. She verified my Zelle account info, and the final settlement payment was deposited in my checking account while we were on the phone.
We were thankful that nobody was injured, and that our claim had finally been settled.
Observations
This (tongue in cheek) “deep field research” is obviously just an anecdote, a single example not necessarily representative of the whole. Recognizing this, here are a few of my takeaways.
Within this claims experience, my earlier predictions about the future of insurance were…a total miss! This didn’t feel like “Insurance 2023.”
Over the course of the claims process, I found the information in the policyholder portal and mobile app to be moderately useful, but sometimes outdated and/or incomplete. The primary and most useful interactions I had were by phone, which is not my preferred method of communication.
There were a few key points when the process seemed to stall. I had to contact the insurer to prompt action at these times. I also had to help with coordination among the collision repair shop, independent claims service, and insurer when the supplemental damages were discovered. If I hadn’t acted, I wonder if this claim would still be open.
To be fair to my insurer, I live in a very rural area where options are limited for services such as collision repair. Longer timelines are a fact of life “out here.” This was undoubtedly a factor.
Every person with my insurer that I spoke with over the phone was professional, pleasant, and helpful at that moment. Any problems and delays appeared to be shortcomings within the overall process.
Final Thoughts
My insurer is one of the largest in the US. I chose them, in part, because they were highly rated for claims satisfaction. They have implemented a claims system from one of the leading core platform vendors, and they have easily spent hundreds of millions of dollars on digital transformation. However, from my vantage point as the policyholder, I saw little evidence of benefits from these investments.
Reflecting my experience, I wish my insurer had done the following:
Provided an overview of the claims process, a description of what to expect at each stage, and a “you are here” indicator for the current stage.
Communicated when the claim moved to the next step of the process via the policyholder’s preferred channel.
Sent updates at regular intervals via the policyholder’s preferred channel. (I would have appreciated a text or email every few days with the status of the claim, instead of radio silence.)
Offered a convenient channel with accurate, up-to-date information for the policyholder to check the status of the claim 24/7, such as a policyholder portal.
Monitored claim progress against established baselines, and intervened or escalated the claim when it began to exceed these.
Today, as we look to the future of insurance and “Insurance 2030” is now our playground for predictions, emerging technologies and futuristic capabilities are all the rage. IoT sensors. Streamlined automation. Advanced analytics. AI. Ecosystems. Wearables. 24/7 policyholder surveillance systems. Micro claims. Instant payments. Digital risk management coaches. (To name a few.) The list is endless, and the possibilities seem limitless, but they can be confusing and daunting, especially for those who are running legacy systems or in the early stages of modernization.
My advice: New tech certainly has its place. We should seek to understand and squeeze all the value out of new technologies that we can, but we should not take our eyes off fundamentals like good communication and claims process management. There are off-the-shelf solutions for improving claims management and communication with policyholders that are readily available today. If you’re an insurer that can execute these fundamentals well, you’ll run circles around those who have their heads in the clouds of “Insurance 2030.”
Jeff Haner is the founder of Coretech Insight, an independent advisory firm.
Coretech Insight provides research, frameworks, and insights focused on matching P&C insurers with ideal coretech providers so that, together, they can be wildly successful.
Jeff has served in senior IT, advisory, and marketing roles with Deloitte, Oliver Wyman, NJM Insurance Group, Gartner, and BriteCore. While with Gartner he authored the Magic Quadrant for P&C Core Platforms. Jeff’s experience as a customer, analyst, and vendor provides a unique perspective that cuts through the noise and finds ideal matches between insurers and coretech solution providers.
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Contact Jeff at jeff.haner@coretechinsight.com