Automotive property damage claims are being automated at an accelerating rate, as documented by the $7 billion public offering of CCC Information Services Inc. (“CCC”). CCC is an information technology company that works with automobile insurance companies and others. It describes itself as “a leading SaaS platform powering the P&C insurance economy.” Defense law firms that are auto panel counsel members will want to become familiar with this growing trend.
The CCC® Accident Advisor software is used by insurance companies to accelerate the time needed to process a claim and reduce claim adjustment costs by digitizing the first notice of loss (FNOL). This is the initial report made to an insurance company following an accident, theft, or damage of an insured vehicle. Drivers involved in an accident or loss are instructed electronically on how to submit damage photos and report details of an accident to the insurer for a faster resolution process.
CCC processes 16 million auto damage claims annually, according to the company. Processing time has been reduced by up to six days, and appraiser productivity has increased by 25 percent. For first party and third-party claims, CCC analyzes more than 12 million medical bills annually. Over 150 million documents are electronically reviewed for P&C insurers each year across demand packages and individual medical bills.
While the processing of automotive physical damage claims is a significant part of CCC’s offerings, it also provides telematics technology to compile and analyze data from newer connected vehicles. The ability to support usage-based insurance is one of many data capabilities.
CCC has built a sales platform with some impressive numbers, according to company reports:
- 300 insurance carriers
- 25,000 repair facilities
- 3,500 automotive parts suppliers
- All major auto manufacturers
The company is headquartered in Chicago, Illinois, with additional locations in Los Angeles, Austin, Atlanta, South Dakota, Alabama, and China.
Digital Transformation of the P&C Insurance Economy
State Auto Insurance Companies is an early adopter of the CCC technology platform. State Auto announced in December 2020 that it was adding first-party casualty claims to its automation program powered by CCC. The insurer, which is headquartered in Columbus, Ohio, markets its insurance products through more than 3,000 independent agencies in 33 states. State Auto now manages claims for auto physical damage, as well as first- and third-party casualty claims using the CCC digital workflow software.
According to CCC, its first-party casualty software digitizes bill intake and review. The time it takes for an insurer to process and pay a claim is reduced significantly using the automated process. More complex claims that require a manual review are flagged for additional action. An insurance company can instruct the software to follow specific rules for claims review, which speeds up the payment process. The CCC Casualty Solutions rules engine maintains unique business rules covering over 26,000 medical codes, as one example stated by the company.
CCC’s third-party casualty software uses artificial intelligence (AI) and biomechanical analysis to evaluate injury causation and bill payment processing. , increasing accuracy and reducing time, labor and cost associated with the third-party casualty claims process.
Aside from the P&C insurance industry, CCC sells software services in adjacent automotive markets.
- The CCC® Promote technology is an estimating platform for automotive parts retailers that is used by 25,000 repairers to process 24 million estimates for collision repair facilities annually. Subaru of America, Inc. announced plans to adopt CCC Promote in May 2020.
- CCC VIN Connect is an insurance telematics service designed to help underwriters make accurate policy decisions when preparing a quote. Used with driver consent, VIN Connect gathers data on driving behavior like speed, acceleration and braking in a virtual manner without the need for a physical device in the car. As of August 2020, the system is in use by Volkswagen Car-Net®. One benefit to drivers is that they may qualify for discounts on VW services in this case.
Background on the CCC Public Offering
In a February 3, 2021 news release, Dragoneer Growth Opportunities Corp., a special purpose acquisition company formed by an affiliate of Dragoneer Investment Group, announced a definitive merger agreement with CCC’s parent holding company. Once the deal closes, the stock is expected to be listed on the New York Stock Exchange under the name CCC Intelligent Solutions Holdings Inc.
An initial S-1 IPO filing was made with the U.S. Securities & Exchange Commission by Dragoneer Growth Opportunities Corp. on July 24, 2020. This was described as a “blank check” company and CCC was not mentioned specifically in the initial filing.
It wasn’t until Dragoneer filed an SEC form 8-K on February 2, 2021 that the specifics of the “business combination” became known, including the disclosure of CCC. On February 3 Dragoneer launched an investor webcast and the Wall Street Journal wrote an article on the transaction. All SEC filings are available via the SEC’s EDGAR system.
Implications for Auto Panel Counsel Members
There are at least two major implications for auto panel counsel law firms.
#1. Adjuster claims productivity increases of 25 percent are cited as one benefit of the motor vehicle claim automation process. This may be true, but local claims adjusters are one of the last links in personal connections available to an auto panel counsel defense firm. Years ago, adjusters had the ability to retain counsel. This has changed over time. Now as technology reduces adjuster ranks and the COVID-era accelerates “work from home” trends, defense lawyers will find it increasingly difficult to build or maintain a relationship-based business.
#2. Defense law firms are typically not at the forefront of technology adoption, from simple marketing solutions (like website management) to more sophisticated workforce management tools. Even basic performance metrics like average time to close a file or average cost per file are not tracked within most firms. While some law firms look the other way, their P&C insurance clients are moving aggressively to automate claims processing and driver telematics. The result is a disconnect that can leave the law firm at a disadvantage in terms of pricing, technology, and bargaining power.
At a minimum, managing partners should be alert to these trends. The first step in formulating a strategic response is to understand the scope and magnitude of change. And remember, always be marketing!
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. Information covered is believed to be accurate but is not guaranteed.