Industry-wide costs of claims management ?

[crowned]

I am writing an article about how streamlining the filing of claims (via connected car data) could lead to cost-savings for the insurance industry.

For instance, BMW's ConnectedDrive service can automatically send some accident data (vehicle location, time, severity) to an insurance company.

Could this help avoid insurance fraud and reduce costs for an insurance company ?

What might this statistic be called ? Basically, I would like to know how much the insurance industry spends on processing claims, and how streamlining claims processing might save money.

Ideally, I'd find data for the European market, but i'm interested in whatever data might be available.

Thanks !

 

[fed up]

So much of auto insurance fraud comes from lazy insurance companies attempting to satisfy the customer by settling the Claim without any investigation. Any claim of insurance fraud opens up the company to litigation so it has to be indisputable and companies buy claims all of the time to avoid complaints to BOI.

 

[crowned]

So much of auto insurance fraud comes from lazy insurance companies attempting to satisfy the customer by settling the Claim without any investigation. Any claim of insurance fraud opens up the company to litigation so it has to be indisputable and companies buy claims all of the time to avoid complaints to BOI.

That makes sense. So, do you think getting automated telematics data in the event of an accident would be of interest to insurance companies ?

It could make it easier for the car owner to fill out the claims form, while at the same time encouraging him or her to be honest. That might reduce fraud.

What are common types of insurance fraud ? Is there some handbook or good site which discusses the various battles car insurance companies face ? Thanks !

 

[fed up]

No. People are NEVER going to be encouraged to be honest. They either are or they aren't.

Claims in the US are mainly handles via phone apps or internet as more insurers embrace the idea that they can reduce costs by reducing the amount of payroll associated with Claims. Auto claims are being submitted via photo apps, Homeowner claims likewise and by the use of drones. If my intent is to defraud a company, I'm going to do it because the number of claims submitted each day can hide my fraudulent claim. Since fraudulent claims only account for 10% of claims, the cost of discovering them might not be as high as covering them.
I have seen a few questionable claims started but the backlash if you guess wrong could be financially devastating in the court of public opinion. Even denying claims for legitimate purposes (no coverage) gets more press than deserved. A well reported instance was after Super Storm Sandy where a flood policy did not cover the contents of someone's basement. There was no counter point to the story segment which showed that the person purchased the base flood policy and was advised to never keep valuables in the basement because the policy only covered items normally found in a basement (heater, washer/dryer, etc). He lost lots of sheet music and some musical instruments but the big, bad insurance company denied the coverage for most of the items he identified as destroyed.
Using telemetrics from an auto in most auto claims would be seen as big brother spying on the driver. Companies already have access to the information but don't use it in most cases.

 

[adjusterjack]

I am writing an article about how streamlining the filing of claims (via connected car data) could lead to cost-savings for the insurance industry.

Why? What's your goal here?

BMW's ConnectedDrive service can automatically send some accident data (vehicle location, time, severity) to an insurance company.

Seems to me it would be a day late and a dollar short. The claimant and/or policyholder provides the VIN when calling in the claim and an adjuster has to go out and see the vehicle. By then the insurance company has all the information it needs.

Could this help avoid insurance fraud and reduce costs for an insurance company ?

Likely would have nothing to do with fraud or claims cost.

I would like to know how much the insurance industry spends on processing claims

The annual financial report (which you are likely to find online) of any insurance company has that information.

how streamlining claims processing might save money.

Insurance companies already doing that and already have all the information they need from car manufacturers from the VIN.

 

[fed up]

Ideally, I'd find data for the European market, but i'm interested in whatever data might be available.

Confused why someone from Michigan would want European data. European insurance companies may use more information because of the speed differences on the autobahn but I don't see a correlation for fraud.

 

[crowned]

Would location information be more interesting for an insurance company? Perhaps in order to see if cars were parked overnight where the policy expects them to be parked?

Thanks-

 

[fed up]

No because you are allowed to travel and there would be little record of habitually parking somewhere other than the mailing address of the policy. The claims process is already streamlined and would not benefit from connected car data. The goal of most claims reps that I have met is to get the claim closed

 

[crowned]

No because you are allowed to travel and there would be little record of habitually parking somewhere other than the mailing address of the policy. The claims process is already streamlined and would not benefit from connected car data. The goal of most claims reps that I have met is to get the claim closed

Sorry, I wasn't clear. I mean if an insurance company could read the car's location whenever it was turned off or on.

 

[fed up]

Sorry, I wasn't clear. I mean if an insurance company could read the car's location whenever it was turned off or on.

No