Insurtech funding hit a record high of $7.4 billion in the first half of 2021—already surpassing funding in 2020. With more and more emerging players entering the field, consumer demands for a more digital, connected insurance experience have grown to new heights. For many insurance customers, the claims process is a critical moment of truth, making it essential that insurers deliver a hassle-free, seamless experience. According to an EY global consumer survey, 87% of policyholders say the claims experience directly impacts their decision to remain with an insurance provider.
Disconnected claims management harms an insurer’s competitive advantage and bottom line. When insurers experience inefficiencies in their claims processes, claims leakage—that is, the difference between what should be spent on a claim and what’s actually spent on a claim—becomes unsustainably high.
So how can insurers increase straight-through processing and optimize claims handling to deliver a more connected insurance experience?
1. Get the most out of your data.
Insurers have data living across many disparate systems, like CRMs, document management systems, accounting systems, core administration systems, and more. This results in time wasted toggling between screens, searching for information, and reentering data, increasing the likelihood of human error. This all results in a prolonged, disjointed customer experience.
Relying on outdated systems takes a heavy toll on insurers’ bottom lines—Forrester Research estimates that maintaining older applications and technology typically costs 70% or more of an organization’s technology budget, severely limiting what can be spent on innovation or new development for value-added services that would enhance the customer experience. Instead of relying solely on these disparate systems, insurers should look to unify and extend their data across systems with low-code.
With low-code, insurers can bring together their existing systems without data migration, creating a single engagement layer across the entire claims process. By using integrations and open APIs to unite data, systems, and processes in a single workflow, insurers can achieve the following benefits:
Utilizing low-code enables insurers to reap immediate benefits without the risk and expense of ripping and replacing core systems.
2. Optimize claims intake.
Disparate systems and data make it more difficult to manage claims from first notice of loss (FNOL) to close. The pre-defined data models of legacy systems limit the ability to capture quality data, resulting in manual intervention at multiple points over the lifetime of the claim and cycle time delays, particularly during high-intake periods like natural disasters
Automation gives insurers the power to tap into technologies like intelligent document processing (IDP), artificial intelligence (AI), and machine learning to optimize claims intakes and achieve these benefits:
By breaking down silos and unifying legacy applications and new data sources, insurers can more easily capture and manage each claim from the moment it’s reported.
3. Digitize the claims experience.
Demand for a digital experience from insurance consumers continues to grow. Throughout the industry, fully automated insurance products are bringing unprecedented speed and ease to the claims experience. And when we say unprecedented, we mean it: Lemonade, an emerging insurtech, set a new world record for settling a claim in just three seconds. To compete in such a high-speed market, insurers must streamline processes to accelerate time to close.
Here are just a few ways insurers can optimize their claims experience:
These steps are just the beginning when it comes to what insurers can do to achieve seamless claims processes for an improved, connected customer experience. The insurance industry is facing new and growing challenges on all fronts—threats like natural disasters and cyber attacks are increasing in both frequency and severity, overloading teams with surges in claims. That’s why the disruptors coming in with innovations that streamline and automate the claims process are so crucial.
For more tips on modernizing the claims experience for your customers, take a look at our eBook, 7 Ways to Modernize the Claims Experience—Using What You Already Have.