Let’s talk about text baby

Claims is probably among the most crowded technology spaces in the insurance industry. There are so many ‘innovative’ solutions and services on offer that keeping track of them can be a full-time job.

Having been in the trenches of claims technology for over a decade now, here is my personal take on the solutions/platforms/services that offer the most potential value. The focus is on technology areas rather than specific solutions.

Before getting to the list, some thoughts on the imperatives that govern the claims function. There are three key considerations that have guided the choices. They are not unexpected, but it is helpful to note them for context.

  • Customer experience: Obviously, the claim event is the moment of truth that the policy is sold for. It is the realization of the promise and a bad customer experience will almost inevitably result in attrition, potentially reputational damage and in some cases regulatory scrutiny. Conversely, a favorable experience can make ‘customers for life’ and proponents.
  • Severity: Equally obviously, claims payments are the most significant expense for carriers and the focus of constant executive attention, if not anxiety.
  • Efficiency or claims adjustment expense: Since claims is basically a cost center, adjustment expenses whether assigned or unassigned are some of the most watched items in the organization.

Somewhat miraculously, there are technology solutions today that promise to improve customer experience while controlling severity and adjustment expense. In this series of posts, I propose to look at closely at some of these starting with something that may sound (ahem) prosaic but has tremendous potential. In fact, it is the combination of familiarity of the technology, relative ease of integration and the often over-looked potential that made me pick this as the first topic.

Text messaging

Let’s talk about text baby… and particularly, as the song goes, ‘let’s talk about all the good things and the bad things that may be’

Text messages are now the most popular form of communication with US consumers. This is borne out by multiple statistics.

  • Americans send roughly 26 billion text messages every day (Business Insider)
  • The average person sends 15 texts per day (State of Texting Report, 2019)
  • At least 97% of smartphone owners text regularly (Pew Research Center)
  • Messaging is the #1 reported use of smartphones (Axway, MarketingCharts)
  • 70% of smartphone owners say messaging is one of the top 5 uses of their device. That’s at least 13% higher than any other feature (Axway, MarketingCharts)
  • 76% of consumers said they’ve received some kind of text message from a business (State of Texting Report, 2019)
  • 39% of businesses use some form of texting to communicate with their customers (State of Texting Report, 2019)

It’s easy to think of text messaging as just another communication channel. However, when it comes to the claims process, text messaging can be a very powerful ‘gateway technology’.

Most insureds have a smart phone these days and are attuned to taking pictures of the damage. Allowing them to send these by text message unlocks many possibilities. Here are some of the features that a full-fledged SMS capability could offer…

  • Ability for Insureds to send pictures, videos and other content via SMS.
  • Ability to send insureds claims related notifications via text messages.
  • Ability for insured to communicate with their adjusters through text messages.
  • Ability to send secure links to documents.

Extending this further there are additional possibilities

  • Early total loss detection using computer image processing which can lead to considerable savings in severity and adjustment expenses.
  • AI based Interactive Virtual Assistants (‘chatbots’) can let insureds check claims status and address frequently asked questions resulting in call deflection and, if done right, an improved customer experience.
  • Electronic document signature links can be texted for immediate response – this can for instance considerably reduce cycle time for obtaining release forms for total loss vehicles.
  • Links to electronic payment solutions can be sent via text and further serve as an authentication factor
  • Optimal method of inspection selection.
  • Remote inspection/desk adjustment.
  • Finally, texted links to feedback surveys sent get far better response rates.
Text strategy considerations

The most important factor to keep in mind is that text is an effective channel mainly because it is relatively underutilized. Customers check and respond to text messages because they expect the message to be urgent or significant. It is important not to misuse the channel by bombarding the customer with unnecessary texts.

Secondly, no matter what the solution, it must allow for the entire text message conversation to be saved to the claim file in the system of record. To my knowledge this problem has not yet been fully solved. Some carriers have custom built solutions using platforms such as Twilio while others are using third party solutions from the likes of ZipWhip, HiMarley or others. Yet others channel their interactions through CRM solutions such as Salesforce. Only the first approach allows for automatic indexing of conversations and it is an expensive option. I’d welcome readers’ own experience with this issue.

Thirdly as claims organizations add services and solutions there is a real danger of the customer getting text messages from multiple unfamiliar numbers. While this is an issue common to the other major digital channel (email), the customers do not have the same sort of user interfaces to effectively search, sort and file messages, create rules around them etc. The net effect could be increased customer frustration with the process.

To illustrate the risk, consider a reasonably forward-looking carrier Acme Insurance that has enabled some of the key features we have listed above. Let’s say it has

  • a. An external photo capture solution for desk adjusting.
  • b. Integration with a rental car company that in turn sends text updates.
  • c. The DRP shop has a solution for providing updates.
  • d. Acme hosts its surveys on an external platform such as Qualtrics.
Now consider a simple claim journey

The customer was involved in a minor collision. She drove the vehicle home and reported the claim to Acme. She opted to receive updates through text and provided her phone number. She wasn’t sure if she wanted to get the vehicle repaired so the carrier offered her the option to send pictures of the damage and get an estimate. After getting the estimate she decides to get the vehicle repaired at a DRP shop. She drives the vehicle to the body shop and gets a rental car. There is additional damage discovered by the shop which extends the repair time. Eventually the vehicle is repaired, and the customer gets it back.

If these different services are not properly integrated, let’s look at the customer experience from a text message perspective. These are the minimum texts she will receive

  • On opting in to receive text message updates:
    • From Acme’s number – “Sorry to hear you had a claim etc. etc. You have opted to receive updates at this number etc. etc. Text YES to continue or STOP to stop.”
  • Shortly thereafter, on choosing to send pictures for estimation:
    • From photo estimating vendor’s number: “Welcome to Acme photo estimate powered by Si Si Si. Click here to download the app”.
  • When the rental is set up:
    • From the rental company number: “Your rental has been confirmed etc.”
  • During the repair process:
    • From the repair shop’s number: Various repair events.
  • When a supplement is discovered
    • From the repair shop’s number: “We discovered an issue etc.”
    • From the rental company number: “We have extended your rental etc.”
  • When repair is completed
    • From repair shop’s number: “Your vehicle is ready for pick up etc.”
    • From Acme’s number: “Click here to participate in a short survey”.

In this relatively simple example, the customer has received texts from 4 different numbers. As the carrier plugs in more services, the likelihood of receiving more messages from more numbers increases.

Is it worth the additional integration effort to send all text messages go from the carrier’s number? For many the answer may be ‘perhaps not’. Carriers can consider the following more cost-effective, practical approaches:

  • Avoid duplication: Review the flow with each service provider and identify which events will trigger a message and who will send it.
  • Ensure consistency in messages. For instance, ensure that the claim number is prefixed in all messages in the exact same format.
  • Get copied on all texts sent to the customer.
  • Allow selective opt out at least from the carrier’s own messages.

To sum it up here are the key takeaways

  • 1. Text messaging is a key enabling technology. Do not ignore it or treat it as an afterthought. Invest in technology (custom built or one of the solutions mentioned above) that lets you manage the channel effectively.
  • 2. As you add services and solutions to your claims application ecosystem, make sure to look at the customer experience in totality and invest effort to work out the various update events.
  • State of Texting Report, 2019
  • Axway
  • Marketing Charts
  • Pew Research Center
  • Business Insider
About the Author:

Nachiket Jeurkar is a Principal with Exavalu and leads the Insurance Practice. He has over 25 years of experience in management consulting and the insurance industry. You can reach him at Nachiket.Jeurkar@exavalu.com

Exavalu is your strategic partner on high impact Digital transformation relevant for your Industry. We’re a unique Business Advisory & Technology Consulting firm run by seasoned Industry veterans that are former executives, CIOs, CXOs, and Consulting Principals. We deliver meaningful change and sustained value aligned with your desired business outcomes leveraging our Industry experience and Solutions capability.

This publication contains general information only and Exavalu is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Exavalu shall not be responsible for any loss sustained by any person who relies on this publication.