Virtual Claims

Compared to a lot of startups, you have a pretty long history. Tell us about Snapsheet.

We actually started in 2010 as a business-to-consumer company called Bodyshop Bids, and it was just trying to help consumers who got in car accidents to get bids from body shops. We built an app and a payment platform, allowed people to submit photos, and built a network of body shops. That’s where we started. Then we migrated in 2012 into the insurance space.

We realized that most of the cars getting repaired were going through auto insurance rather than paying out of pocket, so we started meeting with carriers and listening to the problems they had. We realized that our technology fit perfectly hand in hand with that. We proposed to a couple chief claims officers implanting a solution with us, and they jumped all over it. Back in 2012, the evolution of smart phones and smart phone adoption were still very early on. We’re much more advanced in smart phones today than we were back then.

How does the app work, and how does it benefit consumers and insurers?

We provide a full virtual solution for auto insurance carriers. Most auto insurance carriers run a combined ratio at or well above 100, which means, for every dollar they make, they lose more than a dollar, which seems a little crazy. The prices of repairing vehicles are going up. We provide insurance carriers with a technology platform that helps them reduce expenses today, increase customer satisfaction, and also sets them up for innovation in the future.

We pretty much plug straight into carriers’ existing processes. We allow the insurance carriers to assign us work to get estimates. We propose to the customer through our contact center to either use a self-service branded application for that carrier to take its own photos of the vehicle or a crowd-sourced photo inspection network, or we’ll work directly with any body shop. Our technology enables us to capture photos through different ways, but primarily it’s through the branded self-service app. The customers never really know that we exist.

Everything is white-labeled for that carrier, from the call scripting to the design of the application. We capture photos from that customer, and then the bulk of our Snapsheet employees write auto repair estimates. We have a bunch of checks and balances and technology to make sure that estimate is accurate and then provide the estimate back to the customer, back to the insurance carrier and then back to a shop. Then, we negotiate all the repairs with the shop if the car does end up getting repaired. We provide virtual touchless claims. The customer falls within the carrier’s brand, and the carrier doesn’t have to worry about anything. They let us and our technology take over the claim.

Why is the claims space for personal lines such as auto ready for change?

What has happened is that customers evolved a little bit faster than the insurance carriers’ claims departments. In the past, when the markets were hot, claims weren’t an issue, so insurance carriers didn’t invest a ton of infrastructure in that. They invested most of their money on capturing premiums and policy and underwriting and marketing. Claims were left to flounder a little bit.

By the time the carriers realized they had underinvested in claims, it became kind of a scramble. The customers were demanding virtual channels. The carrier infrastructure and processes simply couldn’t handle it. Insurance carriers were finally forced to come to the realization that the customer interacts with them during a claim and sometimes that’s the only time they interact with them for a long time. You have to do everything you can to make that experience good, because even if you control your expenses in that claim but you churn that customer out, you have to pay to get a new customer. You can see what the carriers are interested in—things like chatbots, visual recognition, anything that helps streamline the process and the cost of their operations while increasing customer satisfaction.

Where do you see the technology going?

From a claims perspective, we’re seeing a lot of interesting technology emerge out there. There has been telematics and the smart phone. There are a lot more sensors in the vehicles now and a lot more connected-car type functionality. People are trying to figure out how all of those pieces are going to work together. It’s a difficult task to tie everything together—and not everything has to be tied together.

What matters is to help optimize certain functions. From a technology perspective and claims, you’re going to see more adoption of virtual like we do. Probably less than 2% of the auto claims market is adjusted that way. The whole industry has to reset itself onto this new virtual infrastructure, and that’s going to take years to do in insurance. For years, carriers will be catching up to those kinds of platforms.

I don’t see a world where the insurance carriers—as much as they’re trying—tie all the pieces together. I think it’s much better for third parties to put everything together. Then, it can be distributed to everyone in the industry. It’s all going to come down to the application inside the carrier workflows.

How many claims are you handling now? Do you have a growth target?

This year, we’ll do between 400,000 and 450,000 claims, which is a pretty big number, and that probably puts us well in the top 15 in claims. If we were an insurance carrier, we’d be the No. 15 claims department. It’s a pretty big number. We’re trying to double each year for the next few years. We’ve been doing that successfully. We want to be processing millions of claims in the next few years. We’re marching toward that by locking in new customers and continually growing share within existing clients.

Will Snapsheet move beyond auto into other claims?

Right now, we’re focused primarily on auto. The penetration of virtual is still very low. There is a lot of growth to go. Auto is unique. There are different years, makes and models, but it’s still the same box with four wheels that you’re taking photos of. So you can control the customer experience. Things like home become a little bit more difficult, because not every home is the same. It makes this self-service model a little more difficult. I think for the foreseeable future we’re really focused on helping this auto market realize its potential and transform, and then we’ll be in a better position to look around once we have this one locked down.