Insurance companies are attempting to digitize the claims journey alongside third-party administrators and other claims partners. Leading the way are technologies like artificial intelligence (AI), machine learning (ML), and advanced data and analytics. Here are some of the top advantages of automated claims management systems.
The Advantages of a Highly Automated Claims Management Process
There are several elements of the insurance claims lifecycle that automation can make more efficient. Each of the following benefits of an automated claims management system brings advantages to the customer, the insurance agency, or both.
First Notice of Loss
The initial phase of the claims lifecycle is referred to as FNOL, or first notice of loss. It's also one of the areas that has the greatest potential for digitization. The manual data collection by claims or customer support employees, which is frequently done on paper, is being reduced or eliminated by an increasing number of carriers through automation. They’re using self-service apps that incorporate varying degrees of voice-to-text, video, and photo functionalities while collecting essential data.
Claims Segmentation
Using machine learning tools that take into account historical claims data, as well as recent claims information, predictive analytics and AI algorithms can be used to segment claims by complexity and severity. This can be done by taking the company's business operations and augmenting them with machine learning tools. For example, a self-service application can be used to expedite the claims process without involving a human, at least in simpler situations. The more complicated situations can be referred to an adjustor or claims handler, particularly if they involve physical harm, the need for medical attention, or carry a higher risk of litigation.
Claims Process Automation
There is no question that automating portions of the claims process can significantly improve what can be a time-consuming and labor-intensive process.
The second-largest auto insurer in the United States, GEICO, wanted to speed up the process of auto claims and repairs. This was achieved through a collaboration with Tractable, a business that creates AI solutions for accident and catastrophe recovery. Because it has been "trained" on millions of prior claims, Tractable's unique computer vision technology can evaluate car damage just like an expert assessor. By incorporating AI into the process, GEICO can analyze estimates in a matter of seconds—significantly lowering its claims overhead expenses.
Customer Service
You can attain higher customer satisfaction scores by automating even just a few elements of the claims handling process.
A program called Immediate Response claims handling has been launched by Progressive, which is the third-largest insurance provider in the United States. A claimant can contact a Progressive agent by phone any time of the day or night to set up a time for an adjuster to visit the vehicle and conduct an inspection. The aim of the program is to shorten the time it takes an adjustor to see the car, which was typically between seven and ten days. Now, they can get eyes on the vehicle in a matter of hours.
Telematics
Usage-based insurance is not a new idea, but it’s still gaining popularity. With younger consumers being drawn to the idea of lower auto insurance premiums based on driver performance, usage-based insurance has been picking up steam.
Telematic systems can make a big difference in the claims management procedure. They can give insurance companies real-time notification of an incident, allowing them to start processing the claim right away. Using multiple sensors and data gathering methods, telematics can record driving information such as quick acceleration, braking patterns, airbag activation, and the crash's GPS position. Telematics can also help the policyholder get a tow or with getting a replacement vehicle.
Fraud Detection
Unfortunately, insurance companies often lose money from fraudulent claims. But an automated system can detect fraud before the company—and others—fall victim to it. Fraud detection works by using artificial intelligence to automatically identify anomalies in what people report during the claims handling process. Each suspected case gets flagged for further inspection by an agent. In this way, the number of fraud cases plummets, which protects insurance company profits.
Automated Settlement
Although the majority of insurance companies work to settle accident claims as quickly as possible, it often takes up to 30 days—or longer—before the policyholder receives payment. But you can boost customer satisfaction by increasing the speed of claim resolution and payment.
For instance, this can be done by collecting images of damage and using AI algorithms to assess the monetary cost of an incident, such as a hurricane or storm. This gives claims administrators a head start on the settlement process, boosting customer satisfaction in the process.
To dig deeper into how automation is already improving how claims are handled, check out the whitepaper, The Future of Insurance: Touchless Claims.
