Why insurtechs need to get data-clever at FNOL
Starting an insurance career as a claims handler, logging new claims, and arranging repairs for damaged vehicles, provides valuable perspective on the FNOL (First Notification of Loss) process and how it could evolve to help manage the rising cost of claims, yet do more for the customer.
Electronic notification of loss (ENOL) enables customers to log the incident themselves via an app or website. Lack of integration with back-end systems does often mean however that claims handlers can end up needing to re-key information. There may also be gaps in the information provided requiring claims handlers to re-confirm details with the customer – this is the second notification of loss (SNOL) and a further operational cost to the insurance provider.
The digital ecosystem aspect
Connected devices such as a home security system, escape of water detector or a vehicle could allow device notification of loss (DNOL), feeding a notification of the incident directly to the insurance provider. Factor in the rise in dashcam usage and ‘Cam-NOL’ could become more common – alerting the insurance provider to the incident as well as delivering footage surrounding the event.
Taking this a step further and Mobile Notification of Loss (MNOL) could become a feature of the claims landscape with smartphones and smart watches alerting insurance providers to an event such as a crash. We also need to consider the potential of virtual assistants to log a claim. While this may be some time off, chatbots are already helping the ENOL experience.
A ’Pre-NOL’ could also give customers the opportunity to understand the impact of a claim on their policy such as whether the loss would be covered and the cost to them prior to logging the claim.
These more remote and automated methods of FNOL can reduce claims handlers’ time, smooth the process for the customer and expedite claims. But they are just the start of the claims journey and more information is needed to speed claims settlement and help protect the insurance provider from fraud at a time when the insurance market needs to be on high alert due to the cost-of-living crisis.
Insurance providers should perhaps be looking at the picture of risk they build at quote and apply the same approach to claims. Why not use validated data to answer some of the questions put to customers at FNOL? This could start with data on the person to confirm they are who they say they are, any prior claims history, their policy history, and any links to fraud since the policy was incepted.
Managing FNOL in the P&C market
In-home insurance, data enrichment at FNOL could then extend to the asset to confirm key details about the property such as prior claims related to the property– what happened, when, and how much the claims settlement was for – even before the customer lived there.
The same approach could apply to a vehicle claim with data injected at FNOL confirming the make and model of the vehicle and the ADAS fitments. The most recent MOT could be verified along with an accurate valuation, the current mileage plus the claims history of the vehicle, and the owner. In time, connected car data could inform where and when, and how the vehicle was being driven in the seconds before the claim.
Insurance providers now take data enrichment for granted at the point-of-quote for good reason. Indeed, the demand for data has grown as a consequence of the pricing reforms. The more you can know about your customers, the better you can segment, price, and compete effectively. Apply the same principle to FNOL, and insurance providers not only have a chance of delivering a faster and simpler claims journey, garnering greater loyalty at renewal time, but have much to gain in improved efficiencies and fraud detection rates.
About the author: Kajal Vakas is the senior manager of claims, LexisNexis Risk Solutions, Insurance, UK & Ireland. She is an experienced Claims professional within the Insurance Claims and Technology space and has 13 years of combined industry and consulting experience serving large Insurance clients.