Window Art

Claims involving only the breakage of vehicle glass, without corresponding collision damage, have long been considered a nuisance in claim operations for many major insurance carriers. Because auto glass-only claims represent a small fraction of total auto severity, carriers tend to believe that they can easily outsource these claims in order to focus on the higher dollar cases, such as total loss and auto/medical claims. Claim managers tolerate the relatively high ratio between the loss adjustment expenses (LAE) and the severity of these claims because the overall costs appear to coincide with the amount that can be reasonably expected.

Imagine that you are responsible for running a claim department in a successful insurance company. One morning, coffee in hand, the head of your line of business walks into your office with a problem for your consideration: Your team represents 75 percent of the business expenses, and the CEO needs to show a larger profit this year. As a result, your team can expect twice as many new customers and the responsibility of lowering the combined ratio while keeping auditors at bay. In desperation, you turn to technology.