The World's Fastest Insurance Claim
15 May 2017
There’s probably very little you can do in three seconds. But Lemonade, an insurance company who are powered by artificial intelligence and behavioural economics, have used this flash of time to do something entirely incredible: settle an insurance claim … And a paperless one, at that.
Whilst we aren’t suggesting for a moment that all claims handlers are about to be replaced by super-fast robots, Lemonade’s decision to settle the claim in lightning speed may well shake up the insurance industry even further.
So, how did they do it?
According to their press release, “At seven seconds past 5:47pm on December 23, 2016, Brandon Pham, a Lemonade customer, hit 'Submit' on a claim for a $979 Canada Goose Langford Parka. By ten seconds past the minute, A.I. Jim, Lemonade's claims bot, had reviewed the claim, cross referenced it with the policy, ran 18 anti-fraud algorithms on it, approved the claim, sent wiring instructions to the bank, and informed Brandon the claim was closed.”
“Since no international standards exist for the payment of insurance claims, the Guinness Book of World Records was unable to enter Lemonade as the World Record Holder,” said Daniel Schreiber, CEO and cofounder, Lemonade.
“Yet from all we can gather, in the 3,000 year history of insurance nothing like this has ever happened in 3 seconds. So we're claiming the title. The number to beat is now 3 seconds, and we hope others will rise to the challenge.”
Lemonade allow their customers to purchase insurance through an app, with no paperwork involved whatsoever.
If you think about the average time it takes to settle an insurance claim here in the UK – in some cases up to several months – this new time frame is nothing short of incredible.
Already, insurance is a sector of business that has had to rapidly readjust and reposition itself in the face of evolving technology. Cyber security and phone apps are just some of the developments that have forced an industry shake up.
Gone are the days where an insurance man would visit your home, equipped with a briefcase and notepad, and make lengthy hand-written notes about your claim. Now, robots with names are doing it instead. (In this case, Jim the A.I. bot.)
In today’s society, we want everything now. We want to be able to order food and clothes from our phones; we want to catch up on TV and listen to music, so why shouldn’t consumers want to purchase their insurance in the same way?
It’s the immediacy of making the purchase – and the claim – through the app that will no doubt give Lemonade the edge over traditional insurance firms.
Think about it: How did you book your summer holiday? How did you order your last takeaway? How did you start browsing for your last house? We bet it was through an app (or, at the very least, online).
It’s simply a case of changing needs: We consume things differently as technology advances. It’s easy to get swept up in the uncertainty that AI poses to the human workforce.
It will be interesting to see how the technology develops – it could go so much further or it may well plateau in the next few years. The insurance industry will really need to play catch up with a lot of other sectors to be considered truly ‘modern’.
But maybe this record-breaker from Lemonade will encourage competitors to follow suit.
To speak to me about recruiting for insurance claims handlers, click here.
Written By Stuart McKenna