There are many technologies and innovations in the insurance sector. Data Analytics, the Internet of Things, Drones, and many others. However, there is only one technology that is truly disruptive for the insurance industry – real-time video.
What Defines Disruption?
The word “Disruption” is frequently overused, but it has a real tangible meaning. Technological Disruption occurs when the technology creates a new market and shrinks or completely eliminates another Market. The Internet of Things and Drones in insurance operations are great technologies, yet they do not cause significant disruptive impact to the existing markets. These technologies deliver efficiency improvements in data collection, enhanced operations, and others, but they deliver improvements rather than having the ability to completely redefine insurance.
Applying Live Video in Claims
Let’s imagine a policyholder reporting a home insurance claim. However, rather than waiting for someone to come out to investigate the damage, the insured has the ability to demonstrate the issue immediately in live video and acquire a settlement check in less than 24 hours. What about having the ability to show a scene of the auto accident live in order to protect themselves from liability claims by another party to avoid law suits and litigation costs? This is powerful. This is not just future tech, live video is here, and it’s readily available for immediate use.
The impact of supplying mobile live video from the hands of the insured and its disruptive nature is huge. The typical field adjustment of property claim ranges in $200-700 dollars per visit. In automotive claims, it’s custom to see appraisal costs ranging $50-200 dollars. With live video, the field adjustment and appraisal expenses are no longer necessary and the savings are significant. With 70% of home insurance claims being small claims, streaming technology offers a very large opportunity to lower claims handling costs. In automotive, it is customary to expect 10% of the small claim volume to be spent on vehicle damage appraisal and repair estimation costs. About 70% of vehicles after an accident are driveable. Which means that there is an opportunity to reduce expenses an over $260 billion of annual automotive claims payments. 10% cost reduction in expenses for this market presents a very large opportunity in itself. But we don’t need to stop there. Real-time video streaming can also help with re-inspections and supplemental claims.
The field adjustment and appraisal market is being reduced. Live video has the capacity to eliminate field adjustment and field appraisal for 90% of the small claims and 50% of medium size claims. This is a very significant impact to field operations. The best part is that this technology is not dream tech that we envision having within the next 5-10 years, but rather something that is already applied by many insurance carriers and third party organizations.
Live video solutions deliver immense cost savings to drive major competitive advantage and this is the right time to explore where real-time video would fit in existing claims operation. With many additional workflows that can be enhanced to deliver further improvements in efficiency and productivity, it is clearly visible that live video is the most disruptive of the technologies in the insurance market.