After 25 years of building a successful technology solution company with my brother, Keith, and serving the auto insurance business, I have reflected on the lessons we have learned over the years and the opportunities going forward in the industry.
Last year was a challenging year for all concerned, but the technology advances driven by COVID-19 have been a silver lining.
Even if you have the best technology, that does not guarantee success
Although some say that the insurance industry has not changed much over this time, the progress in technology has been highly motivating; however, selling this technology into the industry has often been a challenge.
Fundamentally, I think there has been little incentive to change in the U.S. The system has worked, albeit inefficiently. Customers weren’t always happy about their claims process, let alone a catastrophic hail event claim, but accepted that this was just the way it was. Perhaps it is similar to the traditional retail banks not opening after hours when everyone actually needs the service. We just put up with it until something better comes along.
Get started, even if it is only part of the end-to-end solution
Despite initial push back, we saw relatively quick adoption of technology-enabled vehicle damage estimation. Sometimes, you have to focus on a specific niche or problem rather than try and deliver a total end-to-end solution.
I have learned that if you believe in what you are doing and there is a sound business case, there is always a client and market willing to move forward.
Importance of collaboration with all stakeholders
One of the reasons we experienced success ‘Down Under’ was the opportunity to co-design the solution with the client, customers and the supply chain. We needed to adapt our approach for this specific market and recognize the difference and nuances.
In the first two major hail events that occurred, paintless dent removal (PDR) usage increased by 44% and millions of dollars of costs were avoided for insurance clients. Customers and repairers were also happier as everything was more efficient. We saw the trifecta—a win, win, win for the insurer, repairer and customer.
COVID-19 has now accelerated digital transformation
I am optimistic about 2021 as COVID-19 has changed consumer behavior for good. Customers now expect brands to deliver a multi-channel experience. The bar has been set very high by the likes of Amazon, Apple and other digital-first orientated tech companies.
There will be more demand for SaaS cloud-based solutions that provide a touchless claims solution. If insurance companies drag their feet, they will now lose customers because expectations have changed.
A recent industry survey I read estimated that there is a 65% probability that customers will switch insurers if they have had a poor hail claim and repair experience. When you look at how few people switch insurers every year, the management of cat events significantly impacts a brand’s reputation and customer retention. In addition, if that customer has made a cat event claim, on average, it is seven years before they make another. As a result, the insurer not only pays out, but then loses a client who could be profitable in the future.
The impact of ADAS and autonomous vehicles
In addition to the opportunities from this ongoing online revolution, I also see the growth in Advanced Driver-Assistance System (ADAS) and autonomous vehicles as the next incentive for the industry to adopt end-to-end digital solutions, given the complexity of assessing and fixing damage to a vehicle that is loaded with sensors.
Repairing a modern vehicle is already challenging with all these safety features. Autonomous cars will take this to another level. Utilizing pen and paper and the conventional repair process will be challenged with the additional requirement for a pre- and post-evaluation of whether the car is safe to drive.
Many lessons have been learned over the years, which has only made us stronger for the exciting road ahead for digital tech solutions and innovations.