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Insurers looking to rethink the claims process are often working with MSOs

Friday, March 18, 2016 - 07:00
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It’s unclear whether the company will be innovative with claims processing as well. But if Lemonade makes a shop referral and an insured has a bad experience, it’s almost guaranteed that everyone else in that customer’s insurance pool will hear about it.

“Lemonade will have to build a best-in-class claims operation, and gain access to capacity at the best body shops,” Auto Insurance Report points out. “Ask any low-volume insurer how it feels to [try to] get the attention of a body shop when State Farm, Geico and Allstate are their biggest customers.”

Cycle time projections under review

One aspect of claims processing that can impact all shops in either DRP or non-DRP situations are the cycle time expectations of consumers and insurers. Shops often complain that formulas insurers use to forecast “length of rental” often give consumers an unrealistic view of how quickly they will get their car back. If the insurer’s goal is to push DRP shops to perform, that’s understandable, some shop owners say; but when such formulas establish unrealistic expectations for the consumer, and requires multiple adjustments to completion date information by the shop and rental car company, that impacts efficiency and customer satisfaction.

Pat O'Neill

As ABRN reported earlier this year, Allstate and perhaps other insurers are reviewing such formulas to determine if there’s room for improvement. A Collision Industry Conference (CIC) subcommittee is participating in the effort, designed to culminate this fall in one or more proposals that could be tried by some insurers. But the committee has cautioned that repairer input doesn’t ensure that whatever insurers establish will be seen as an improvement.

“This doesn’t mean that the result that might come up at the end would be something that CIC would completely condone, but I think it behooves us to at least be involved in what might be something that we’re going to have to deal with,” Pat O’Neill of the CIC committee involved in the project said.

It’s a minor potential change in future claims processing that could have a big impact on everyone involved.

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