When insurers are looking for claims processing innovation – or have a new concept they want to try out – they have increasingly turned to MSOs. As George Avery, who retires this year as a top claims executive for State Farm, said back in 2012, MSOs present an “interesting platform” in which to experiment with a change on a large but not national scale.
“You hear people talk about how the model is broken,” Avery had said. “There are components (of change) that could be perhaps introduced into an MSO that you couldn’t quite introduce company-wide…That is a place where you could possibly go and say, ‘Look, we’d like to try something different.’”
Confidentiality agreements – and a desire to protect any potential competitive advantage – tend to keep MSOs pretty tight-lipped about any out-of-the-ordinary claims processing agreements they may have with insurers. But insurers themselves sometimes talk about innovations they are pursuing; proposed regulatory changes can sometimes offer clues; and industry vendors sometime share details about processes they are enabling – or hope to – for insurers.
Estimate via photo?
In about 1 in 5 states, for example, claims processing is required by law to begin with an appraisal based on a physical inspection of the vehicle. But companies like Snapsheet, which offer estimates based primarily on uploaded photographs of damaged vehicles, are among those supporting regulatory changes in the states that currently require physical inspection.
In 2014, for example, the Massachusetts Auto Damage Appraiser Licensing Board (ADALB) issued an advisory stating that photographs of vehicle damage could be used by an appraiser in lieu of a personal inspection of the vehicle. But just 14 months later, the board rescinded that advisory.
Massachusetts shop owner Rick Starbard, who was appointed to the ADALB last year, said he felt the 2014 change was wrong, in part because he feels it was “rushed out as an advisory ruling” rather than a formal change to the regulation, which would have required hearings and testimony. He said after the initial change was made, he heard of many instances in which original appraisals, based in some cases on “consumer’s iPhone photos,” included only a fraction of total cost of repair.