Leading insurance companies are prioritizing claims process automation. Why? Because expenses related to preparing, processing, paying, and adjusting claims represent the most significant share of an insurer's operational costs. Even more than that, 87% of policyholders say the claims experience directly impacts their decision to stay with an insurance provider.
But for many insurers, complex tasks, siloed data, and disparate systems have turned the claims process into a painful customer experience. That’s why 59% of respondents to Celent's North American Property/Casualty 2022 CIO Pressures and Priorities survey said they were currently replacing, beginning replacement, or making significant enhancements to their core claims system.
Traditional claims vs. automated claims management.
Traditional approaches to claims management have been labor-intensive and full of inefficiencies. They require mountains of paperwork, phone calls, and data stored in numerous systems (e.g., CRMs, document management systems, claims systems, and policy administration systems). Employees would have to toggle between screens to find the information they need, manually re-entering data and increasing the risk of errors.
In contrast, automated claims management systems optimize underwriting efficiency with advanced algorithms and machine learning. They make it easier to collect, analyze, and process massive amounts of claims data faster and more accurately , reducing the cost of manual processes and human error.
Leveraging automation's power, speed, and efficiency calls for a strategic approach to the integration process. First and foremost, this means aligning workflow automation with the specific needs of the claims process. Second, you’ll need to select a process automation platform designed to seamlessly integrate with your existing systems and workflows to minimize disruption and maximize operational efficiencies. Finally, ensure your automated systems are resilient enough to adapt to changing business needs. By meeting these three requirements, insurers can be more resilient in today's rapidly changing business environment.
We've just scratched the surface of why automation is essential for insurers to achieve seamless, friction-free claims operations for improved customer satisfaction. For more tips on automating the claims experience for your customers, check out the following three pillars of claims automation success.
The 3 keys to automating claims management.
1. Accuracy
One of the most critical aspects of claims management is accuracy. Insurance claims can be complicated, involving multiple parties and complex legal issues. So it's essential to have accurate and detailed information about each claim to ensure that it is processed correctly.
Automated claims management systems can help insurers expedite claims handling and increase straight-through processing. For example, using automated document processing and artificial intelligence, insurers can automatically extract information from claims documents and automate decision making for routine claims, allowing adjusters to focus on more complex claims.
It's also critical to ensure your automation platform comes with pre-configured industry templates, integrations, and a data fabric to unify all data wherever it lives and provide claims adjusters with a 360-degree view of each claim. Instead of scattered and incomplete data, imagine a centralized location, or data fabric, where all your important data is easily and quickly accessible, eliminating data silos and time-wasting file searches.
By combining the strengths of human claim adjusters, intelligent automation, and data fabric, insurers can gain better visibility into the process and better identify potential fraudulent claims, subrogation, and litigation, enabling adjusters and external legal/recovery teams to collaborate across multiple channels, while making smarter and more efficient data-driven decisions.
2. Speed
Speed is another critical pillar of successful automated claims management. It plays an essential role in the customer service. But paper-based and phone-centric first notice of loss (FNOL) processes, disconnected systems, and disparate data impede claims management. Omnichannel digital intakes allow insurers to streamline claims intake, saving precious time and resources.
But when bottlenecks, breakdowns, and inefficiencies in claims management impede processes, claims leakage—the discrepancy between what insurers should spend and actually spend on a claim—can account for 2%–4% of an insurer's total claims cost. If left unchecked, this leakage problem can skyrocket to 20%–30% of total claims cost.
Unfortunately, the outlook for claims leakage doesn't look any brighter. With the frequency of natural disasters, cyber attacks, fraudulent claims, and other crises on the rise, the leakage problem will likely worsen. But expediting FNOL with AI and IDP can speed up settlements and deliver a streamlined, friction-free claims experience.
3. Efficiency
Finally, efficiency is a critical pillar of successful automated claims management. The insurance sector is highly competitive, and insurers must manage their costs carefully to remain profitable. Digital claims management systems can help insurers reduce costs by streamlining the claims processing workflow. For example, insurers can:
- Leverage artificial intelligence and intelligent document processing to extract structured and unstructured data from claims documents and emails to prefill data and accelerate intake.
- Use open integrations and APIs to create a single-pane-of-glass view of claims from all legacy systems, CRMs, and advanced data sources like IoT, telematics, and insurtechs.
- Create custom workflows for different user personas to expedite speed to close and increase customer satisfaction.
- Optimize fraud case management with a unified view and comprehensive control of all potential fraud alerts for SIU teams.
Yes, automation can minimize the need for human intervention in the claims process, but it can also augment the human workforce in the insurance industry. That's especially noteworthy considering that over the next 15 years, 50% of the current insurance workforce will retire, leaving more than 400,000 open positions unfilled. And according to the US Chamber of Commerce, all facets of the insurance industry will need help to replace experienced workers at every level.
The good news is that leading insurance firms are already piloting intelligent automation solutions that could help bridge the talent gap by driving productivity and reducing expenses while delivering returns over 10x their original investment, according to Accenture.
So, what challenges stand in the way of your organization achieving its claims modernization goals? Do you need help with improving claim processing time? Would that help you improve customer satisfaction and win more business? If so, check out our eBook, 7 Ways to Modernize the Claims Experience—Using What You Already Have.
