Still-Video Helping Automobile Insurers : Innovation: By using cameras that capture images of cars on diskettes, companies can store records directly on computer workstations.
Along with tons of pollution, the cars on the region’s freeways generate a mountain of paperwork for insurance companies like the Automobile Club of Southern California.
Fortunately, technology spawned by the videocassette recorder has helped the Auto Club’s data-processing division in Costa Mesa steer away from the latest potential paperwork pileup.
A new state law that went into effect in May requires the company to store voluminous photo records. The law, a measure aimed at stopping the filing of false claims on “ghost vehicles” that don’t exist, requires insurers to inspect each car and store at least three color pictures of every insured vehicle.
“The law pushed us a little harder to find a solution,” said Wayne Merrick, a systems-processing specialist at the company’s Costa Mesa office. “We found it in still-video.”
The company, which insures more than 600,000 vehicle and property policyholders in the state, complied with the law using so-called still-video cameras. The cameras, which are based on the same technology as VCRs, can capture images on diskettes, allowing the company to forgo photographic film development costs and store records directly on computer workstations.
Clark Murray, Auto Club director of information services in Costa Mesa, said the insurance company expects to save more than $700,000 a year, mainly in bypassing the process of developing and printing film. By comparison, this project has a one-time cost of about $500,000.
“The brute force solution would be to buy a lot of regular cameras and do a lot of film processing,” Murray said. “This allows us to do it in a much more cost-effective way.”
The still-video cameras, a video camera-like gadget that takes freeze-frame images on video film, capture as many as 50 frames of pictures on 2-inch-square diskettes that function much like personal computer disks.
The still-video pictures are incorporated into the company’s “image-processing” system, or computerized record storage system, which the insurance company installed several years ago. The pictures help cut fraud in that they at least verify that the insured vehicle exists and its vehicle identification code is correct.
It takes a lot of technology to address the scope of the company’s storage problem. The Auto Club must store 36,000 new pages of documents daily, in addition to the 7 million documents that the company already has on file.
Last year, things got more complicated. The state Legislature passed the photo inspection law as a way to combat insurance fraud. The state Department of Insurance estimated that 15% to 30% of the $860 million in losses caused by fraud each year could be attributed to owners filing false claims on so-called “ghost vehicles.”
Since May 1, the company’s policy underwriters at 80 branch offices have used still-video to record images of newly insured cars and their vehicle identification numbers. The company has been taking 5,000 still-video photos a day, far more than it could process using photographic film.
