The insurance sector has been looking for ways to fast-track claims processing to foster better customer experience and maintain revenues. Adopting technology like AI is not just a trend but a must.
See also: Insurance: An Industry Embracing AI
Let’s understand how AI streamlines each step-in claims processing:
1. Empowering Decision Makers
With AI entering claim processing, the ability to evaluate claims has leveled up. AI can make judgments based on large historical datasets and flag fraudulent activities missed in manual investigations.
2. Speeding Processing
AI-powered systems drastically speed up processes by automating most of the manual tasks. AI can tackle claims at initial levels and categorize them based on urgency. It can further escalate the conversations to the right authorities in real time.
Let’s now explore some of the top advantages of claims automation:
1. Smooth Data Analysis
Replacing manual processes with automation leads to higher employee morale. Automation addresses challenges like miscommunications between departments and other delays in claim resolutions. Automation reduces manual data entry, while processing and analyzing unstructured data.
2. Customer Satisfaction
Customer satisfaction and loyalty are closely tied to the speed and accuracy of claims processing. Automated workflows enable insurers to deliver faster resolutions, which translates to happier customers.
For example, with automation, customers can access the real-time status of their claims via chatbots, while freeing agents to spend time on developing meaningful relationship. McKinsey has found that using the right technology can increase customer satisfaction by 20%.
3. Compliance
AI can be used to spot potential problems that escape human scrutiny and enhance regulatory compliance.
See also: Cautionary Tales on AI
A Real World Example
A national healthcare insurance provider faced challenges in handling claim errors and corrections. Their system required human intervention for a few items. Subject matter experts (SMEs) reviewed emails, created correct copies, and resubmitted, requiring significant time and resources while adding complexity.
A claims automation solution saved over 1,300 monthly work hours for local claims and reduced processing time to 2.5 minutes per claim. For ITS claims, the system saved over 1,600 monthly work hours, with processing time cut to just one minute.
The robotic process automation (RPA) solution also enhanced accuracy by automating the error correction process.. It deployed bots to read and validate claim data, identify errors, and automatically correct them based on predefined business rules. The solution integrated seamlessly with the company’s existing claims management system.
Future Expansion
As AI and automation evolve, their impact on the insurance industry is expected to grow.
1. Advanced AI Models
AI will likely lead to even more sophisticated models. These models will be capable of understanding nuanced contexts and handling complex claims, such as assessing damage from natural disasters or predicting long-term healthcare costs.
2. Integration With IoT and Telematics
Insurers can gain insights into risk factors with real-time data collection. This allows for more accurate assessments and personalized policies.
3. Ethical AI and Transparency
There will be a growing emphasis on ethical AI and transparency. Insurers must ensure their AI systems are fair, unbiased, and explainable. This will maintain trust with customers and regulators as AI becomes more integral.
4. Expansion of Automation Across Insurance Functions
Beyond claims processing, automation will expand into underwriting, customer service, and policy administration. This holistic approach will enable insurers to create more efficient and customer-centric operations.
AI technology is set to create endless opportunities in insurance.
