Litigation, social inflation, driver safety, rising accident costs, and a decaying public highway infrastructure have all contributed to a hard market.
In 2021, this trend changed, with U.S. commercial auto insurers seeing the lowest average combined ratio of under 100% for the first time in the last five years. But how sustainable is this recovery?
To succeed, insurers now realize that they must reimagine how they do business. There is an increasing focus on operational efficiencies and technological advances to improve underwriting margins and pave the way to profitability. Claims management is one of these key investment areas. If done right, claims investments should result in capturing significant value.
Bumpy Road Ahead in Commercial Auto?
When Insurance Market Conditions Tighten, Claims Can Help
For the better part of a decade, the commercial auto line has been a challenging and mostly unprofitable line of business.
Key Challenges for Commercial Auto Insurers
Internet of Things (IoT)
The value of IoT lies in the constant stream of real-time data it provides. Telematics data can allow you to automatically detect, capture, and provide pre and post-incident investigative data to your adjusters. It can also reveal subtle frauds, for example, it could tell if a customer who had a legitimate accident, maybe a head-on collision, then tries to lump in previous damage, say to the rear bumper. Some believe telematics will overhaul the underwriting business. The tools, data, and mechanisms are here – now, all you need to do is ensure your claims management systems can support it.
High Severity Injury Losses
Long hours on the road, many miles driven, larger trucks with slower responses – it’s no wonder commercial fleet accident rates in the U.S. reach 20%. And they are among the most expensive injury claims to boot. Combine the high-frequency losses with much larger policy limits, and it becomes imperative for you to have a claims system that facilitates the accurate and efficient investigation, evaluation, and potential litigation of high-severity injury claims.
Commercial Auto Estimation and Repair
When a collision or unexpected mechanical breakdown puts a commercial vehicle on the disabled list, it’s often a scramble to get that vehicle rolling again. Fleet managers are on a perpetual quest to ensure their vehicles are operating at full capacity, and adjusters must be able to resolve these claims quickly. However, due to the greater variance in large commercial vehicles compared to personal autos, the estimation and repair are less uniform and more complex.
Omnichannel Communications
Your policyholders expect real-time communication across multiple channels (text, email, chat, phone, video) – corresponding just by snail mail or even email is no longer an option. Unfortunately, most claims insurance technology is outdated and does not support omnichannel communications, leading to frustrated customers and unhappy adjusters.
Five Sigma Benefits for Commercial Auto Insurers
Our cloud-native data-driven claims management solution makes your claims processing simple and smart.
Automated Claims Submissions
Our digital claims management solutions (CMS) provide:
- All FNOL data received from the insurers/digital channels are embedded automatically into our workflows and ready for the next step in the process
- Rapid system identification of claim types
- Automated triage and adjuster assignment
Embedded Omnichannel Communications
Our CMS includes an API-level communication module that supports all types of communications, including SMS, mail, voice video calls, and even WhatsApp. All claims-related communication is documented, stored, and analyzed automatically.
Just-in-time Recommendations
Our systems flag coverage and liability issues and present the adjuster with relevant information and investigative steps within the claims system.
Damage Assessment and Negotiation
The key to effectively negotiating a claim begins with accurate damage assessment. Our CMS includes a digital bodily injury evaluation module to itemize, assess, and aggregate damages.
Monitoring and Management
Based on our advanced data modeling, we enable insurers to monitor your operations and receive actionable insights that will help you make strategic management decisions.
A Commercial Auto Insurer Deploys a SaaS Claims Management System in Months
A regional insurer of heavy long-haul trucks and midsize local delivery fleet vehicles completed an initiative with their insureds to provide telematic discounts for all the insured vehicles that are installed with sensors, cameras, and EDRs from their preferred vendor. Through this initiative, more than 80% of the vehicles they insure are now connected.
Learn how Five Sigma provided an open, cloud-based, out-of-the-box commercial vehicle solution that was integrated and in production within six months.
More To Explore
Browse our blog posts for the latest insights and trends in claims management.
We analyzed over 10k exposures that were closed in the last six months for our auto insurance customers. Here's three data-backed reasons why insurers should go digital when it comes to auto claims payments....
When INSHUR wanted to bring its claims processing in-house, the commercial auto insurance company chose Five Sigma—twice. Our latest case study shows why....
