Economic turmoil fuels the rising cost of auto claims
December 14, 2022 - Motor claims follow the traditional customer experience: Taking out a policy, renewing and making a claim.
By Chris Bakes, managing director, auto solutions; Jason Kurutz, director, product management and business strategy; and James Paprocki, managing director
Insurance carriers are continually looking for ways to process claims faster without sacrificing quality and to improve the claims experience for their valued policyholders. Many have turned to the burgeoning field of insurtech but have encountered challenges that include insufficient resources for successful development, inconsistent integration with other systems and services, and loss of the human touch amid an overemphasis on efficiency.
In response to client feedback to this effect, Sedgwick recently introduced an innovative solution that we hope addresses these concerns and more: a digital tool for the end-to-end, automated processing of low-severity residential property claims, such as small-scale leaks and fence damage. What truly distinguishes this approach is its full and seamless integration with other offerings in the property space, including desk and field adjusting, repair solutions, temporary housing and more. Its intuitive self-service options and auto-adjudication capabilities make the claims process quick and easy, and the tie-in to services offered by our expert teams means policyholders enjoy a one-stop, full-service experience that meets all their needs.
For decades, the auto industry has relied on “just-in-time” manufacturing. This means that vehicles and their parts are made in accordance with current demand, rather than in advance. When carefully coordinated, a just-in-time approach helps to promote efficiency and control production and warehousing costs. It does not, however, account for the kinds of major disruptions the industry has experienced in the past two years.
The insufficient supply of parts can be attributed to several interconnected economic factors.
The COVID-19 pandemic led to widespread factory closings and labor shortages, as well as bottlenecks in trucking and marine cargo. Additionally, newer vehicles feature complex safety and infotainment systems that require semiconductors. These microchips are still in extremely short supply due to manufacturing slowdowns and heightened demand for smart devices and other electronics. Further compounding the situation is the Russia-Ukraine conflict; the area normally provides multiple raw materials to the global auto industry and produces car parts, such as wire harnesses, that are essential to the manufacturing process.
The convergence of these supply chain complications, along with inflation across most economic sectors, amounts to a near-perfect storm for organizations trying to manage auto claim costs. The standard percentages commonly used in adjusting auto claims simply don’t apply in this environment.
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December 14, 2022 - Motor claims follow the traditional customer experience: Taking out a policy, renewing and making a claim.
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December 15, 2022 - Motor claims follow the traditional customer experience: Taking out a policy, renewing and making a claim.