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Digitalized Claims Processing as 'Business Enabler' for Insurers



Advancements in digital technologies continue to disrupt various industries and for the insurance business the challenge is reaching the "innovate or die" level.

A smart, fast, and better insurance service is crucial for insurers to provide since tech-empowered consumers are growing and they want real-time results in availing of products and services and getting other things done in just a few taps and swipes.

Vijay Sinha, MD & CEO at COCO by DHFL General Insurance, underscored the need to improve claims processing since it is a main factor in customer experience (CX).

"Customers would judge the efficacy of an insurer by its ability to provide insurance claim to the customer when the need arises, i.e. when they experience the risk against which they have taken insurance," Sinha wrote. "However, since the insurance industry is highly regulated and by its very nature treads on the side of caution, claim verification and processing can often have a long gestation period."

Brett Johnson and Agnes Lau-Fernau of international consulting services firm Mazars Group noted claims processing in the insurance industry is an area that is ripe for innovation and evolutionary change in the way things are done.

A recent report revealed many insurance firms still do highly manual process on claims processing which requires human intervention and is susceptible to errors. In fact the digitisation of claims is still in its infancy in Asia, and most Life/Health insurers are a long way from fully integrating digital technology into their claims processes. Across Asia right now, claims digitisation mostly revolves around online electronic and mobile claims payments for relatively small sum assured claims, applicable to a limited range of products, the report said.

Besides manual process, the other two major challenges of the insurance sector are scattered data, and legacy applications.

Manual processes in insurance companies involve several back-end processes which are usually labor-intensive, time-consuming, and repetitive such as underwriting, renewing premium, and conducting compliance.

The scattered data problem refers to dealing with mixed data format like electronically and on paper. Companies need to transfer this data into their machines which can be costly and susceptible to human errors. As for legacy applications and point solutions, they lead to operational inefficiencies and excessive costs used by administrative functions.  

Benefits of Automated Claims Processing

Suresh Sankaranarayanan, CTO at Kotak General In Insurance, claimed "insurers today increasingly view technology as a business enabler, rather than an operational tool."

Sankaranarayanan identified significant benefits of a digitalized insurance business such as automated workflow, fraud detection, reduced closure time for claims customers (like resolving queries), and achieving hassle-free No Claim Bonus Confirmation.

Aside from customer satisfaction, automating processes in the insurance industry can help insurers save up to 65% in cost reduction alone, wrote Daniel Newman, a principal analyst of Futurum Research and CEO of Broadsuite Media Group.

Srinidhi Rao, head of Robosoft Technologies, USA, stressed that insurers will have to re-look at digitization from a broader perspective which is inclusive of product innovation, services, and business models.

He claimed artificial intelligence (AI) enabled assistance can lower the documentation time by as much as 80%, thereby making insurance companies more profitable.

"Today, companies need to rethink how they want to use human potential and how much they can trust a computer to handle their operations. By doing this, one thing becomes clear that human touch will become premium in the future, especially when robots will do most of the repetitive and mundane work," Rao said.  

The Mazars Group pointed out strategic introduction and blending of modern technology to assist a standard process, such as claims processing, represents an innovative way for insurance leaders to drive evolution and generate a substantive return on investment.  

Research and experience illustrate that companies using Robotics Process Automation (RPA) have generated impactful and lasting results including:

• Transaction Processing Improvements by up to 50%, • Standardized Processes, • Productivity Benefits Greater Than 60%, • Reduction of Manual Effort by Nearly 90%, and • Fostering an Environment that Supports Risk-Free Processing of Sensitive Data

Business and technology specialist Soumik Roy taught that claims processing if handled well, can present a whole new world of opportunities for insurance companies and their agents — and significantly boost customer experience or CX.

"Claims provide an opportunity for insurers to get in touch with customers and understand their needs. In the digital world, it allows them to collect more data on customers and provide them with better products and services in addition to advising them to increase their policy cover (if needed). Modern-day insurers and insurtech startups are doing this quite effectively, making insurance a painless process. If traditional insurers don’t catch up, they risk losing business to other players in the market," Roy explained.

Speeding Up Claims Processing

Alex Sun of Mitchell International, affirmed that "chatbots have the answer" for insurers to improve their customer experience, and many are investing in the technology powered by natural language processing.

"Chatbots are fast and efficient, and customers can interact with them in the way they are most comfortable communicating — via whatever mobile device they have in their pocket. And, unlike humans, chatbots can help more than one customer at a time and are available around the clock. But they are not strictly a utility play. When they are designed to have personalities that align with the brand powering them, they move from being simply transactional to transforming the customer experience," Sun explained.

He shared a recent Accenture study of the insurance industry, wherein 68% of respondents said their companies use some sort of AI-powered virtual assistant in at least one segment of their business.  

Geico’s virtual assistant, Kate, for example, answers basic policy and billing questions within an app. Digital insurer Lemonade takes things a step further. Their chatbot, Maya, sells inexpensive homeowners’ and renters’ insurance, and their claims bot, AI Jim, makes Amazon Prime’s same-day delivery look slow — it recently settled a simple claim in three seconds.

Sun added as chatbots become more commonplace, they are making their way into behind-the-scenes claims processes as well. Tableau’s prototype chat software, Eviza, has a voice interface so users can drill into its signature data visualizations simply by asking questions out loud. Clara Analytics offers askClara, a chatbot the company bills as a “24/7 personal assistant to the claims handler.” Like customer-facing chatbots, it can answer routine questions about a given set of claims.

Customer experience futurist Blake Morgan featured how Internet-of-Things or IOT allows insurers to move more quickly and make powerful data-driven decisions.

Morgan attested companies no longer have to wade through paperwork, and can instead move through the claims process more efficiently. Instead of filling out countless forms, customers can now submit claims via mobile apps by taking a few pictures. Connected devices like biometric and environmental sensors make it easy to calculate risk and adjust policies as situations change.  

He added data from connected devices allows insurers to know their customers on a deeper level with more accurate personal information, which can help create powerful bonds and add an element of customization to insurance that has long been lacking. Insurers can also more easily detect fraud, recommend personalized products, and create more accurate estimates.

"In an analog world, an insurer didn’t know when a customer put their house on the market. In a digital world, insurers can know of available homes right away and recommend a new home insurance policy, plus auto and life insurance coverage," Morgan claimed.

Meanwhile, Daniel Newman a principal analyst of Futurum Research and CEO of Broadsuite Media Group, listed some mobile solutions that insurance providers now use to make life easier for their customers. Among these are self-service dashboard, purchase options, and Insurance As A Service (IaaS).

Newman wrote self-service dashboards that are usually seen in grocery store lines and restaurants are now also being made available in insurance.

"As people nowadays want to use their phones to get things done, they’ve also started to get more comfortable with doing serious things — such as taking out mortgages and buying cars — at the click of a button," Newman wrote. "Purchase options are now also being made available by some insurance companies — helping to compare often complicated policy coverage and costs at the click of a button. One can even enroll on the spot, having insurance in minutes without ever needing to speak to a sales agent."  

Then there is also Insurance as a Service (IaaS), which allows people to insure expensive items like cameras and jewelry only when they are in use. Newman thinks the service is a prime example of using technology purely for customer experience as it allows people to keep their goods safe as needed, rather than forcing them into a long-term policy for items they rarely use.

Newman opined: "The insurance market is known to be oversaturated with providers. Those who jump in early to give customers what they want and need via digital transformation will absolutely have a leg up on the competition."  

About QuickReach

QuickReach seeks to help companies implement digital transformation through solutions that foster agility and speed in going digital.

QuickReach is a Singapore-incorporated product company backed by the experience of the BlastAsia team. Established in 2001, BlastAsia is one of the largest software product engineering companies in the Philippines and is ISO-certified in Quality Management Systems and in Information Security Management Systems. BlastAsia is also a Microsoft Gold Partner for Application Development and Cloud Platform.

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