Poor claims experiences could put up to $170 billion of global insurance premiums at risk by 2027, according to New Accenture Research

Poor claims experiences could put up to $170 billion of global insurance premiums at risk by 2027, according to New Accenture Research

Artificial intelligence technologies such as machine learning and data analytics could transform the claims value chain and improve customer outcomes.

NEW YORK, LONDON and HONG KONG; August 3, 2022 – Up to $170 billion in insurance premiums could be at risk over the next five years due to poor claims experiences, with process inefficiencies in underwriting potentially costing the industry 160,000 million dollars more during the same period, according to a new report. of Accenture (NYSE: ACN).

the report, Why AI in Insurance Claims and Underwriting?”, is based on surveys of more than 6,700 policyholders in 25 countries; more than 120 claims executives in 12 countries; and more than 900 US-based insurers. Explore how the insurance industry is responding to the latest market dynamics, pressure from new competitors, challenges facing insurers and the growing demand for seamless customer experiences, as well as how technologies from intel ·artificial intelligence (AI) can be applied to satisfy and retain customers. and transform the subscription function.

The report found that one-third (31%) of claimants were not completely satisfied with their home and auto insurance claims handling experiences over the past two years. Of that 31%, six in 10 (60%) cited problems with settlement speed and 45% cited problems with the closing process.

Dissatisfaction with the claims experience is a key reason driving customers to switch insurers. Almost a third (30%) of dissatisfied claimants said they had switched carriers in the past two years, with a further 47% saying they were considering doing so. Overall, consumers who said they were not fully satisfied could account for as much as $34 billion in annual premiums, or as much as $170 billion over the next five years.

The report claims that AI technologies could improve the claims process. For example, four in five (79%) of claims executives surveyed said they believe automation, artificial intelligence and machine learning-based data analytics can bring value to the entire value chain. claims value, from flagging fraudulent claims to damage assessment and loss estimation. , reservation, adjustment, processing optimization and subrogation. However, adoption of these technologies has been slow to date, with only a third (35%) of claims executives reporting that their organizations are advanced in their use of these technologies. That could change, however, as nearly two-thirds (65%) of insurance companies plan to invest $10 million or more in these technologies over the next three years, prioritizing AI-based applications and automation technologies , according to the claims managers surveyed.

The report also found that insurers could reduce operational underwriting costs by adopting AI technologies, realizing up to $160 billion in efficiency gains by 2027. As insurers face currently with aging systems and inefficient processes, the research found that up to 40% of their Time is spent on administrative and non-core activities – an annual efficiency loss of between $17 billion and $32 billion. More than half (60%) of insurers surveyed believe that improvements could be made to the quality of their organizations’ processes and tools.

“AI is no longer a future technology, but an established capability that many insurance innovators are already putting to work to deliver better customer experiences and empower their workforce,” said Kenneth Saldanha, who leads the group of Accenture’s insurance industry globally. “As humans and artificial intelligence collaborate ever more closely in insurance, companies will be able to reshape the way they operate, becoming more efficient, fluid and adaptive. Those who are already going through harnessing AI will be able to create a sustained competitive advantage.”

Read the full report »Why AI in insurance claims and underwriting?” to understand how to drive AI at scale in insurance.

Methodology

The report is based on four insurance claims and underwriting surveys, looking at both customer and employee experiences and how insurers are responding:

  • A survey of 6,754 policyholders from 25 countries about their most recent experiences in filing auto and property insurance claims;
  • A survey of 128 insurance claims executives from 12 countries about their claims organizations’ strategies;
  • A survey of 434 U.S. property and casualty insurance policyholders, conducted in conjunction with The Institutes, an insurance education provider; i
  • A survey of 500 US life insurers on technology adoption.

To arrive at the $170 billion premium-at-risk figure, Accenture used modeling along with survey data from 6,700 insurance claimants, analyzing the global auto and property personal insurance market to calculate the annual volume of premiums and the percentage of people making a claim. annually This was used in conjunction with consumer survey data relating to the percentage of people who reported that they were not fully satisfied with their claims experience and those who said that, as a result of their dissatisfaction, they had changed carrier or will do so during the next five years. Accenture used a similar approach to calculate the $160 billion efficiency gains in the underwriting figure, taking into account annual personal, commercial and life premium volumes and costs invested in underwriting employees to determine a ratio of subscription costs. Efficiency gains were calculated to be between 0.5 and 1 percentage point of the expense ratio, representing between $9 billion and $15 billion globally per year.

About Accenture

Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills in more than 40 industries, we offer strategy and consulting, technology and operations and Accenture Song services, all powered by the world’s largest network of advanced technology and intelligent operations centers. Our 710,000 people deliver on the promise of technology and human ingenuity every day, serving customers in more than 120 countries. We embrace the power of change to create value and shared success for our customers, people, shareholders, partners and communities. Visit us at accenture.com.

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