How Will Big Data Automation Impact Insurance Field Data?

A Conversation With Brandon Burton

In This Episode:

Up Next

How Will Property Data Help Manage the California Insurance Crisis?

Brandon Burton:

And that’s what Mitigate really leverages. It leverages the ability to dramatically increase the fidelity of the data while significantly reducing the time burden on the technician, and everything else builds on that, right. The rest of the claims automation cycle is dependent upon how accurate that field data is, how complete that field data is something I refer to as fidelity.

Maiclaire Bolton Smith:

Welcome back to Core Conversations: A CoreLogic Podcast where we tour the property market to investigate how economics, climate change, governmental policies, and technology affect everyday life.

I am your host Maiclaire Bolton Smith, and I’m just as curious as you are about everything that happens in our industry. Surging inflation, persistent labor shortages, and the increasing frequency and severity of natural disasters are exerting pressure across our industry. This is especially true for the claims and restoration business. As insurance claims and restoration adapts to these pressures, people are increasingly looking to technology to lay the foundation of the industry’s future. Nevertheless, navigating shifts in claims operating models and strategies is challenging. InsurTech has increasingly provided solutions to navigate these market shifts while improving bottom lines. However, there is still plenty of room for innovation to drive growth in an industry faced with a seismic shift from legacy process to a modern streamline and customer-friendly approach.

So to talk about how technology is helping claims and restoration professionals navigate stringent standards and market pressures, we have Brandon Burton, the Senior Principal of Industry Relations here at CoreLogic. Brandon, welcome to Core Conversations.

BB:

Very excited to be here with you today Maiclaire on Core Conversations.

MBS:

All right, well, I am super excited to talk to you. So, okay. We’ve talked on this podcast a lot. Insurance has been around forever, for generations, and obviously it’s evolved. We’ve seen a lot of this especially in the last couple of years. So to start today, can we just talk a little bit about how technology has altered the claim side of the insurance industry?

BB:

Absolutely. I don’t think you have to look very hard to see all of the ways in which technology has impacted the claims process, especially over the last 10 years. Automation is a buzzword that we hear a lot. Artificial intelligence is a buzz phrase that we hear a lot, and although these are buzz phrases, they’re reality in the claims lifecycle. And one of the most difficult things that the claims lifecycle has always faced is, especially in mitigation, is just how volatile one project is to the next. The amount of time and effort that’s involved to look at each individual project to know whether or not there has been compliance with standards, if it fits the norm for process. And that’s where technology has really come to bear, is to help that process of simplifying. Just understanding whether or not best practice was applied.

MBS:

Okay. Obviously simplification, digitization, there’s advantage of that. It’s making things easier, but there’s got to be challenges associated with that as well. So can we talk a little bit about the opposite side of that or what are some of the challenges that have come with this simplification of the digital world?

BB:

Yeah, absolutely. And it strikes the same chord because it all stems from just how variable one project is to the next. It’s easiest to automate when you have consistency. The challenge is no two homes are the same. No two water source is the same, no two set of occupants are the same. And that brings a lot of variability into the process, which makes it more challenging to apply that technology.

Erika Stanley:

Before we get too far into this conversation, I wanted to remind our listeners that we want to help you keep pace with the property market To make it easy, we curate the latest insight and analysis for you on our social media where you can find us using the handle @CoreLogic on Facebook and LinkedIn, or @CoreLogicInc on X, formerly known as Twitter, and Instagram. But now let’s get back to Maiclaire and Brandon.

MBS:

So I mean, I think a lot of us think technology solves everything. Is there not new technology out to help fix all these things that aren’t quite, the challenges that are out there?

BB:

And that’s part of what the industry has really worked through over the period of implementing technology, is to understand where are the similarities, where are the indicators that best practice was applied or wasn’t applied? And really zeroing in on where technology can identify not only whether or not it was applied, but even earlier in the claims cycle, which is where the technology really is beneficial, is just helping the service provider identify that best practice so it can be applied during the workflow of the mitigation itself, and that’s where the technology really becomes beneficial.

MBS:

Yeah. Do we see common themes coming from people in the industry? Is that what they’re looking for mainly, is better ways to do workflow or are there specific requests that they’re like, hey, we’ve got to have something to be able to do this easier or better?

BB:

And I think it comes from two sources. One is that service providers are trying to deploy the work through a very rapidly changing and evolving workforce, where the history of that workforce is not the same as it was 10 years ago with those that grew up in that industry. The labor pool’s changing quite a bit. And secondarily, I think the other place it stems from is that our standards are getting better. So our standard of care, the documented standard, is becoming more refined, more mature, and is providing better opportunity to automate upon.

MBS:

Okay. I want to dive into this topic of standards because I think that this is something that’s important. Specifically, well, companies have to adhere to standards. There are rules and regulations in the world. So can we talk a little bit about how these standards have potentially changed or what specifically are they impacting? Can you dive into that a little bit?

BB:

Absolutely. And I’ll just kind of preface by saying this is an area of particular passion of mine. I’ve invested a lot of time and energy into standards because I think they’re so critical for our industry. And it’s also one of the things that I think just as an organization, CoreLogic really brings to bear. There’s a lot to be said for how important representing the core and accuracy of the data is to the process, because you have so many stakeholders that all have very valid but very different interests in the process coming from their different viewpoints. And the one thing that rings true is that if the data is accurate, the data is true, the data is available, the data feeds and informs the process, and at the end of the day, all of those stakeholder interests are served. And that’s what I think standards bring to the process, is they bring that honesty and integrity into the data, and that’s why they are maturing so quickly at the same time.

I’ll give you a really good case in point, the S500, which is the standard for water damage mitigation, was just recently republished, updated in 2021, which is not that long ago. It’s already under revision again. That’s how quickly these are modifying and changing. Very, very quickly.

MBS:

Wow. Yeah. Is there a reason why they update them so quickly?

BB:

Yeah, because the technology is changing, what’s available to the service provider is changing, the amount of data we have as an industry to understand what is common among reasonable and prudent practitioners, that data is becoming more mature. And that’s really what the standards are based upon. A standard is a way in which an industry documents what is common among reasonably prudent members of the trade. That’s what a standard is. So as that data matures and we have more visibility into that data, so it’s kind of like a self-feeding cycle, we get better data, better documentation, better digitization that makes more data available into the standard writing process, and that self-serves and then refines the standards. So it’s a cycle that just continues to repeat.

MBS:

Yeah. That’s great. And that it’s moving pretty much as the speed that technology is moving as well.

BB:

Exactly. At the speed that technology will facilitate. Absolutely.

MBS:

Yeah. That’s great. I know we talked to our economists quite a bit on the podcast, and one thing that we’ve often talked about in the last couple of years is the construction industry and how there’s a shortage of labor shortage. Also, does that trend into the claims industry as well?

BB:

It does In particular, not really in particular on both sides of the fence. From the service provider side, straight through to the claims management and adjusting side, it affects both sides of that fence. From the service provider side, the skillset required to perform the work in the field where you got to think of the picture here for a minute. You’ve got a home, there’s been a water intrusion into this home. People’s worldly possessions and belongings are floating in three inches of water in the basement. Just think of the mindset of that property owner for a moment, and then the skillset of that individual that needs to come into that environment, make quick, emergency decisions about restoreability, to be empathetic to the customer at the same time, to ensure a successful project overall, that skillset and that blend of capabilities is rare. It’s not something you can find every day.

So the turnover that we see in that industry, which is significant, makes it difficult to fill that labor pool because I’ll be honest, ever since the COVID era, filling labor and that type of labor has become more and more difficult. It was difficult to begin with, but it’s even more challenging. Now we look over at the other side of that fence and we look at the claims side and the administration of those claims. And there again, carriers are having a difficult time ensuring that they have the right talent, training and expertise to fill those roles, to take in that documentation, understand the context of those projects, and then decipher that against standard of care, to determine, at the end of the day, were the right services provided in the right quantity for that particular project? Which is again, a very, very unique skillset.

ES:

Before Brandon to Maiclaire continue the conversation about trends in the claim and restoration industries, it’s that time again. Grab a cup of coffee or your favorite beverage. We’re going to do the numbers in the housing market. Here’s what you need to know.

In six U.S. housing markets, ou-of-town homebuyers earn 60% or more than current residents. Many of these non-local buyers are relocating in search of more affordable areas. However, this has made affordability more challenging for locals. The Miami area; Louisville-Jefferson County, Kentucky; New Orleans, Louisiana; Reno, Nevada; and Naples-Marco Island, Florida, occupy the top five spots where there is the largest gap between potential out-of-metro and local homebuyers. Some of these homebuyers could also be investors.

The share of investor purchases in the U.S. nudged up in the third quarter 2023. This is despite 2023’s, mortgage rate increases. By September 2023, the share of single-family purchases made by investors was 28% and shows no signs of dropping back down below 20% soon. In 2019 and 2020, investor activities never moved above 20%. California and Texas were the most popular states for investors. While investor purchase rates climbed in September 2023, owner-occupied purchases dropped. That month, owner-occupied purchases went down from 280,000 to 215,000. This may foreshadow how different types of buyers might react to mortgage rates above 7% and shows an early sign that investors may be the more resilient group. And that’s The Sip. See you next time

MBS:

So I’m thinking of ways that technology could help with that, with staffing, with helping to understand the skills that are needed and staffing people up for that. Can you talk a little bit about how is technology going to help this move forward?

BB:

Yeah. And it’s already begun to. One of the ways in particular that is happening is just by looking at the data that comes out of a project and being able to apply that standard of care, that S500 or whichever standard applies in that particular case, and identify what is really the list or set of required services that needed to be rendered based on that data. And because the standards are getting better, and quite honestly because the field documentation is getting better, getting much more fidelity in the data, more of that type of automation can be rendered, which really reduces the administrative burden both on the part of the service provider and those that are actually performing the claims adjustment or the claims review in terms of the amount of work required by each one of those skilled individuals. They can see more claims if they’re spending less time on each claim. So that is helping substantially.

MBS:

Okay. No, that does make a lot of sense. Okay. I want to circle back on standards. You mentioned this is something that’s near and dear to your heart, and I know you do serve on the board of the American National Standards Institute. So can you talk a little bit about how, how are standards developed? You’ve talked about how they’re evolving quite quickly, but how are they developed and what are some of the key problems in the industry? Some we’ve talked about, some others. What are some of the key problems these standards are trying to solve?

BB:

Yeah, so first I’ll articulate the role that I serve there, and then I’ll talk a little bit about how those play into industry. So I am the Chair of the American National Standards Institute, publisher of IICRC. So IICRC is our industry’s organization, the Institute of Inspection, Cleaning and Restoration Certification. And I’m sure 99.9% of anybody who listens here will know who the IICRC is. If not, definitely find out. You need to know who the IICRC is. And that organization, that group, serves cleaning, restoration, inspection, remediation, all of those fields as it relates to those types of services in our industry.

So everything from trauma and crime scene cleanup to the abatement of a meth lab through to fire restoration and water damage. These are all parts of the services that our industry provides. And we have standards in all of these areas, either currently published or under development. And what a lot of people may not necessarily be aware of is that we’re just about to get the industry’s first structural fire standard. This is a huge area of service that our industry serves. It has never had an ANSI standard. And that’s going to change the first quarter of 2024, which is absolutely massive. It’ll have a huge impact on that industry.

MBS:

Interesting. Wow, that’s exciting.

ES:

Before we end this episode on how technology is helping the insurance claims and restoration industries adapt to market pressures, let’s take a break and talk about what’s happening in the world of natural disasters. CoreLogic Hazard HQ Command Center reports on natural catastrophes and extreme weather events across the world. A link to their coverage is in the show notes.

2023 was a full year of natural disasters in the U.S. Natural catastrophes, like severe hail, fell across the central and southeastern U.S., becoming the costliest category of weather events in 2023. Just one week of severe thunderstorms in June generated an estimated $8 billion worth of insured loss. From mid-March through November, three-quarter inch or greater hail fell on more than 23 million homes across the contiguous U.S. More than 50% of homes impacted by hail were in Texas, Colorado, Illinois, Oklahoma, and Missouri. Texas saw almost 2.8 million homes subjected to one-inch or greater hail, and it was only one state.

Hurricanes also battered the coasts. The Atlantic Ocean basin saw the fourth-highest number of named storms since 1950. Seven of those storms became hurricanes of which three were major. And let’s not forget wildfires. While the West Coast experienced seasonal fires, devastating wildfires raged through the town of Lahaina on Maui, Hawaii, in August.

If you’re curious about what happened in the world of natural catastrophes in 2023 and what we can look forward to in 2024, get ready for an upcoming episode on Core Conversations where we will invite back Jon Schneyer, CoreLogic’s Director of Catastrophe Response.

MBS:

So if we look to the future, what does your crystal ball hold? If we look at we’re in this world of persistent labor shortages, increasing standards, with climate change and with exposure differences with people moving into these areas where we’re having, we had one of the worst hail seasons on record last year, growing number of claims, what’s on the horizon for a claims professional that they should pay attention to?

BB:

And I think you hit a couple of nails right on the head. First, depending on how you look at it, there’s a significant amount of job security in this space. We’re not going to see any shortage of claims. Those drivers that drive the volume of claims are going to increase over time, not decrease. When you take the amount of housing, the number of buildings that are present in North America and multiply that against the volatility that we’re seeing in change in weather patterns, those two are going to compound and drive up the claims volumes. We’re going to see nothing more than more claims in the future. So very secure in your employment in this space. Having said that, the pressures of a market like that are going to drive a change in the systems that stand up and support that market, not the least of which being the models and methods we use to manage the claim lifecycle.

Field documentation is the piece that I spend a lot of time on, so I can speak to that very, very specifically. We are going to see a much greater implementation of automation, of intelligence built into the data collection process, and not just for the sake of technology. The reason those are going to continue to become more prevalent is because they have to. We have to see a greater fidelity in the data, but we have to see a reduction on the administrative time to capture it, on the technological requirements of the individual capturing it. They can’t always be the expert in everything. So we need to see technology that brings that expertise for them. And that’s exactly what’s happening with some of the development we’re seeing in the mobile technology and the mobile field tools. That’s what’s happening. We’re bringing those standards to the user as opposed to expecting the user to be a master of all those trades.

MBS:

So I guess one thing that comes to mind when we think of new technology, is there any new technology that’s leading the pack that’s going to help with all of this that we are aware of?

BB:

Yeah. CoreLogic is introducing at INTRCONNECT. And for INTRCONNECT attendees will have first access into Mitigate. It’s an entirely new field documentation tool. So Mitigate is a product that strikes the balance between increasing that data fidelity while also recognizing the real world challenges of the technician in the field and the limitations of the time they have to spend capturing that data. Think about for a moment just what a mobile device brings already equipped. The camera that is there, the recognition for location, the recognition for date and time, and then the workflow itself. If we’re smarter about the workflow, and I know that this technician is performing X task at one particular point in time and they trigger another workflow, I already understand what they’re doing at that point in time. Capture with that, the rest of what the mobile device brings, and I can fill 5, 6, 7, 8 fields of information without the user having to even think about it. And that’s what Mitigate really leverages. It leverages the ability to dramatically increase the fidelity of the data while significantly reducing the time burden on the technician.

And everything else builds on that. The rest of the claims automation cycle is dependent upon how accurate that field data is, how complete that field data is, something I refer to as fidelity, and the better that fidelity, the better the automation cycle and the less the burden on everybody else in the line.

MBS:

I would think too, the less, the lower the probability of claims fraud too, which I know we’ve chatted about in other podcasts as well too. So wow. Super interesting Brandon. Thank you so much for joining me today on Core Conversations, a CoreLogic podcast.

BB:

Thanks for having me.

MBS:

All right. And thank you for listening. I hope you’ve enjoyed our latest episode. Please remember to leave us a review and let us know your thoughts and subscribe wherever you get your podcast to be notified when new episodes are released. And thanks to the team for helping bring this podcast to life: Producer, Jessi Devenyns; Editor and Sound Engineer, Romie Aromin; our facts guru, Erika Stanley; and social media duo, Sarah Buck and Makaila Brooks. Tune in next time for another Core Conversation.

ES:

You still there? Well, thanks for sticking around. Are you curious to know a little bit more about our guest today? Well, Brandon Burton is the Senior Principal of Industry Relations at CoreLogic. He comes from over 30 years of industry experience in the property restoration space where he served as the technical director for Legend Brands, an IICRC instructor, a published author, industry technology inventor, and advocate for best practice. Brandon also currently serves the industry as the chairman for ANSI/IICRC standards. You can join Brandon for leading edge Insights in restoration on his monthly webinar series, Technically Speaking, currently in its second full season. Register at nextgearsolutions.com/webinars.

©2023 CoreLogic, Inc. All rights reserved. The CoreLogic statements and information in this blog post may not be reproduced or used in any form without express written permission. While all the CoreLogic statements and information are believed to be accurate, CoreLogic makes no representation or warranty as to the completeness or accuracy of the statements and information and assumes no responsibility whatsoever for the information and statements or any reliance thereon. CoreLogic® is the registered trademark of CoreLogic Solutions, LLC.