The paradigm shift from traditional to digital means of carrying out operations is leading the industries through a pathway of growth and development. In the new era of technological advancements, the insurance sector is in the midst of a radical, digitally infused shake-up. Nowadays, an average of 61 percent of consumers prefer digital tools to monitor their application status. Also, as millennials and urbanites generally demand less physical interaction and prefer to consume digital services when possible in any industry, it is therefore plausible that, over time, for further digitization of claims processing there will be increased demand. For instance, millennials and post-millennials will make up almost half of the adult population by 2030. Pertaining to this, McKinsey predicts that more than 50% of claims processing will be automated by the year 2030.
The insurance claims process, contrary to what was believed in the past years in relation to the integration of cutting-edge technology and adaptation to the accelerating pace of technological change, has now evolved. Today, to better meet the changing needs of customers in an increasingly technology-centered world, one must enhance their service delivery capabilities. This leads the organization towards becoming a more agile organization that can adapt quickly to constant change and uncertainty.
Utilizing the potential of technology to streamline claims settlement
The insurance claims process has been bestowed with a number of disruptive technologies. Some of these technologies are Artificial intelligence, Blockchain, Machine learning, and robotic process automation. With high expectations, these digital natives expect a seamless, integrated, and digital experience across a brand’s value chain, which pushes insurance brands to embrace the disruption. It’s difficult to discern specific patterns in the claims data that require closer examination by humans. In contrast, artificial intelligence can identify specific claims patterns at random or at scale within minutes with some deft programming. Moreover, all these improvements can be achieved without greatly increasing operational expenses or requiring excessive time.
RPA: From First Notice of Loss (FNOL) to adjustment and settlement, RPA bots can automate the entire claims process. To automate transactional processes and map claim distributions, the claim adjusters require the use of RPA technology. As it automates many areas of claims processing such as accounting, tax and regulatory compliance, settlement of dues, credit risk assessment, and analysis, and administrative tasks.
AI: AI and machine learning can be used to easily detect fraud as well as target potential customers. Additionally, it allows you to study the behavior of potential clients and provide insights into possible future trends. For example, they can analyze images, sensors, and historical data and can then verify the AI’s results and settle claims based on them.
Big Data: Large amounts of data make it difficult to sift and sort the information during claims processing. If all the data are not considered, they may not make the best decision. If the insurance companies have less time, how can they handle large volumes of claims? In this case, Big Data Analytics helps claims adjusters flag the claims that need further investigation. It’s not just for insurers looking to reduce fraud that big data is useful, it assists the society as a whole by ensuring that they are provided with accurate claims settlements.
Cognitive technologies can play a critical role in improving the efficiency of processes, where ease, speed, the convenience of service, and price are key competitive differentiators. Professional claim adjusters use cognitive technology to access, identify, and extract the relevant information in documents, forms, applications, and policies to determine and finalize claims settlement.
According to a McKinsey report, automation can increase customer satisfaction by 15%, improve accuracy by 4%, and reduce claims journey costs by 30%. Hence, insurtechs need to create a clear and consistent message that demonstrates their willingness to adapt and evolve with new technology disruptions, as only such an approach will position them to be frontrunners in the new insurance era.
The Author of the article is Ravi Mathur, Co-Founder and CTO, Insurance Samadhan