In the low touch relationship that insurance companies and their customers continue to operate in, claims processing is hands-down one of the most important interactions.
So when the insurance company takes 1-2 business weeks – which sometimes extend to 28 days or comes down to 5 business days – to process a claim, both the stakeholders suffer. Insurance company’s costs go up and the customer satisfaction rate falls.
Time and again, it has been made evident that claims management is one of the biggest problem areas for an insurance customer. The problem area that leads to customers switching their insurance company after a bad claim experience.
Now, for something as business impacting as claim processing, it is important to identify and underline the problem areas which need an overhaul.
Problems with traditional claim processing
It is crucial to know what is lacking in the current claims processing approach in order to move towards solutions.
In addition to frustrations around how information is shared and the time spent on documentation, there are many signs of a non-working claims process.
Massive lag time
Your capability around handling claims in an expedited manner is a sign of your effectiveness as an insurance company. The extensive lag time that occurs after an incident is a sign that the processes are not streamlined or are as timely as they should be.
Lack of clarity in terms of paperwork
Typically, it can be time-consuming to gather all the required documents for paperwork. So when an insurance company demands a new document after every time interval to process the claim, it can become challenging for the customer to arrange and provide them.in real-time.
Lack of actionable data
Every insurance company follows a tracking procedure to gather information and track the numbers of claims processed. However, the percentage of companies using that data to generate actionable insight around a particular demographic or location is still very limited in number.
While these are the top three problem areas in a claim processing journey, it could be anything else. The outcome, however, would remain the same – dissatisfied insurance customers.
What does an insurance customer want?
Efficiency, speed, and transparency are some of the key attributes of a quality claims experience that the customers expect. The answer to this expectation lies with data. Data can help with streamlining the claims process and setting the base for better experience.
Here are some data-oriented options that insurance companies can consider to aid this customer expectation.
- Property and casualty insurers can use the historical repair data for decreasing the estimation time for different homes and vehicles.
- Advanced telematics data can be captured during the automobile accident and downloaded from the cloud to trigger a first notification of loss entry. The underwriters then can score that data to identify the extent of loss compared to automobile’s present value.
- AI can scan claims and identify any fraudulent behavior, while the robotic process automation technology can pay claims which meet certain financial parameters.
- Through the help of intuitive insurance apps, the customers can upload the image or video of the damage and initiate the claims process.
As you could have reckoned, the insurance customer’s expectations and their probable answers are heavily inclined towards convenience and no-touch claim experience. Achieving this in reality, however, would call for several process changes on the insurance company’s part.
Ways to Make Claim Processing Efficient
In a world where technology-centricity is growing at unprecedented measures, it is imperative for an insurance company to embrace digital technologies for enhancing their service delivery abilities and improving claims process. Here are some of the ways to approach this change.
1. Digitization of documentation
Dealing with massive volumes of paperwork day in day out, the insurance sector recognizes the importance of digitization. The entire claims process flow gets improved when the claim requests are captured electronically. Through the digitization of the claims documents all the relevant data gets highlighted and validated for expedited processing.
2. Auto-classification of the documents
By automating the labor intensive, prone to error, and time intensive manual tasks, auto-classification can significantly lower the labor costs, better the information quality and expedite claim processes.
The benefits that auto-classification technology brings with classification of document, page separation, data validation, etc. can be used for driving robust capture-to-process use cases.
3. Cleaning of claims
Claim processing is a multi-step complex process. Achieving a clean claim – the one that gets processed in the first go, requires an inclusion of technology to support improvement.
By using technology like AI for locating information in the document, insurance companies can identify if the claims documentation is complete, which can lead to faster workflow.
4. Inducing transparency in process
Prompt communication and transparency is a crucial element of claims processing. When you regularly send the claim status report to the customers, they feel secure and less anxious as to where the process is stuck. Achieving this level of transparency would call for a connected system where the data is shared between parties at every stage in real-time.
5. Using insurance analytics
Incorporation of analytics in the insurance company gives them the right abilities for handling complex claims, avoidance of errors, effective management of risks, elimination of performance variability, and reduction of the operational cost.
In addition to these benefits, collection, analysis, and extraction of insights from different data source helps with the deployment of right people at the right place. The result? Better claims management.
6. Insurance claims investigations
It is crucial for an insurance company to investigate the genuinity of the claim. According to Gartner, annual losses due to insurance claims fraud can go up to $40 billion per annum.
Using technologies like AI, IoT, etc. insurance companies can identify the fake claims and eliminate the chance of paying high costs to a fraudster. On the front of claim accuracy, technology can be used for – reviewing documents, conducting surveillance, analyzing social media accounts, and tracing past records, etc.
So here were the different ways an insurance company can make claim processing efficient. Incorporation of these approaches, however, is not easy. An insurance company which is too stuck to its traditional, legacy-system dependent processes are difficult to change.
However, this change is the only way for them to achieve business continuity and not lose business to their technology-first competitors. Achieving this can be difficult when you are handling the reformation as a DIY project.
We can help. Get in touch with our insurance reformists to digitalize your claim processing approach.