Insurers –Don’t Be Afraid to Embrace the Gig Economy!

When the name Henry Ford is mentioned, it is synonymous with revolutionary ‘invention’, adaptation or implementation of the moving assembly line.

Many people have taken that to hyperbolic lengths, the creation of the ‘modern’ industrial revolution (please note that modern was used tongue and cheek).

If you ask someone on the street about Henry Ford, many believe that he ‘invented’ the automobile. That is quite a legacy, and well deserved. His ideas were new and fresh, and quite disruptive in their day.

Henry Ford would be proud to see the evolution of the ‘gig’ economy. Though no one person has been credited with the invention or creation of the gig economy, many innovators have contributed to its existence.

It has been predicted in a study by Intuit, that by the year 2020, 40% of American workers will be independent contractors.

40% four out of ten people. Almost one half of Americans. That is a staggering number!

So what is the gig economy, also known as the ‘sharing economy’?

This was a phrase coined in 2009 when full time work was hard to come by.

Talented workers would work any series of short term ‘gigs’ in order to make ends meet.

Let’s face it, from a young age all of us, in some small way wanted to be rock stars.   So now, rather than have a boring full time job, we all can do a ‘gig’ whenever it fits within our newly monikered desire to achieve a perfect ‘work-life balance’.

I’m an insurance guy, and the one thing we in the insurance industry don’t do well is new or cutting edge.

If it ain’t broke, don’t fix it right? Well, I would argue that it is ‘broke’. Let me explain.

Let’s start by agreeing that all insurance companies want to be the model for off the chart customer service, unparalleled customer satisfaction, phenomenal customer retention, efficiency across all channels, and yes, lest we not forget profitability.

I would argue that all of those lofty goals are one in the same. One begets the others and vice versa.

I’ve been in a lot of board rooms, and heard a lot of words from other executives about how these are the goals of their insurance companies. The overarching question is how?

Embrace the gig economy.

But before we get into how best a carrier can embrace the gig economy, let’s start by demystifying it.

Carriers have forever used the former version of the gig economy, independent contractors or vendors.

Their appetite for these professionals always seems to wax and wane but they remain an omnipresent fixture in the day to day insurance industry.

Let’s focus in on a typical homeowner carrier as our example as representational of the insurance industry.

A HO carrier, we will call them ABC Ins Co., or ABC for short, writes HO policies across a wide geographic area in order to avoid saturation of risk.

They have a home office, where they employ qualified adjusters. A claim comes in 450 miles away from their closest adjuster. They now call their IA firm, and ask them if they have an adjuster in the area.

Their answer is always yes (whether they do or not), and so the claim is assigned to the IA firm.

If a water mitigation company is needed, the carrier calls their best water mitigation company and says we have a new claims in this area, can you handle it (again the answer is always yes!).

Now the carrier feels as if they have done everything they could possibly do.

They have assigned the claim to the IA firm and they have sent a water mitigation company. Now they sit back and wait. And wait. And wait, the entire time playing quarterback between the policyholder and the IA firm and water restoration company.

This doesn’t seem like they are in control. They have now outsourced their customer satisfaction to two outside firms.

Let me be clear. We love IA firms. We are one!

We love all vendors. They perform amazing work on behalf of the carrier day in and day out. We just want them to be used more effectively.

How?

It starts with realizing what a claim is. A claim, in our humble opinion, when distilled down to its core essence, is a carrier responding to their promise to be there when something (peril) occurs at the loss location.

An adjusters job it to take the facts of that claim, apply the policy and indemnify the policyholder.

This can be done in many different ways, direct repair, check, combination of the two, but indemnification is the ultimate goal!

In order to meet this goal you have to make good decisions regarding the claim. And you can only make good decisions with good data.

The adjusters’ main job is to collect information in order to make an informed decision on that claim. So now let’s start thinking about what this information looks like.

We need a description of the loss. We need some photos of the loss, maybe a video. We need measurements of the affected area. We need to know the extent of the damage. We need to do some investigation as to causation. These are all the jobs that the adjuster performs.

How can this process be done more effectively via the gig economy?

We would argue that making good decisions on claims requires good data. A lot of it. The more data, the better the claim can be adjudicated. But why are we sending our best decision maker into the field to collect this straight forward data.

An adjuster in a car, sitting in traffic going to one loss location is highly inefficient. I would much rather place that highly trained, qualified adjuster, at his/her desk with a video feed of all that is going on at the loss location and allow them to quarterback the loss.

We at TelaClaims would propose a better solution. Embrace the gig economy. Realize that claims require data. The best and fastest way to collect that data is to segment highly specialized people into their respective areas of efficiencies and what they enjoy doing. We crudely refer to this as the boots and butts problem. Some adjusters are great boots, but not so great at sitting down and translating what they see in the field into actionable reporting. Others are great at reporting and are whizzes in estimate writing but hate being in the field.

In summation, work with your policyholder, not just for your policyholder, and leverage all of the willing participants in the gig economy to drive better data, at lower costs to you in order to make better decisions.

At TelaClaims, we have the software solution to reduce a 30 day claim cycle into 30 minutes. That becomes the very definition of a win, win, win.

So as an insurance executive, the next time you hear gig or sharing economy, embrace that and proudly report that we have leveraged the gig economy to afford the utmost in customer satisfaction which has translated into demonstrable cost savings and bolstered the bottom line. We love gig, so will you.

David Milton

Founder, CEO / TelaClaims. Author, speaker and entrepreneur. David spends most of his time today developing software solutions for the Property Claims and Insurance space. Enjoys good food, fast cars, and a room full of developers, marketers, and videographers. He lives in South Florida with his wife, son and two daughters.