Claims processing is the cornerstone of any insurance business because it is the point at which an insurance company delivers on its commitment to its customers. Oddly enough, claims processing in the modern insurance space remains a manual, inefficient, error-prone operation.
By automating claims processing, companies can reduce the inefficiency and inaccuracy of inputting data by hand, measurably decrease Loss Adjustment Expense (LAE), and keep customers satisfied.
In a recent research report, Claims Automation: The Future of Insurance (March 2018), Aberdeen examined manual and automated claims processing in the insurance space.
Complementary IT Enables Claims Automation
Aberdeen found that top-performing, industry-leading organizations are 35% more likely than the Industry Average (see Aberdeen’s maturity class framework on page 3 of the report) to have some form of automated claims processing solution in place. Doing so removes the manual and error-prone process of entering data by hand.
Coupled with image conversion, claims documents that are submitted in various formats can be seamlessly converted into the preferred formats while simultaneously eliminating the need to retain physical copies. (See Figure 1 below.)
The Best-in-Class are keen to entirely remove manual components from every stage of the claims process. In fact, they are 66% more likely than the Industry Average to have some form of robo-advisors implemented. With the aid of these advisors, insurance organizations can markedly increase their straight-through process rates. By giving customers the assistance afforded by robo-advisors, organizations can ensure all required information is present and accurate during the first stage of the process, thus reducing the need for claims staff on both the front- and back-end of the process.
Getting the Most out of Claims Automation
The utility of an automated claims solution can be significantly enhanced with the implementation of an electronic claims archive. Once the necessary claims documents have been uploaded and converted to the preferred format, they can immediately go into the electronic claims archive.
Of respondents who have adopted automated claims solutions, 63% have a centralized digital claims archive (see Figure 2 below). Doing so provides real-time visibility into that data, therefore cutting out the time wasted sharing that information with individuals across the organization. Plus, the repository enables a self-generated audit trail for each claim, which reduces errors and the chance of fraud.
This aggregation of historical claims data can lead to far-reaching benefits across the entire claims process. It can be used to update robo-advisors with the leading indicators of fraudulent claims and expedite them to the appropriate decision makers. Organizations can, again, increase the straight-through process rate while simultaneously increasing the likelihood of identifying and, ultimately, reducing fraud.
Another beneficial capability leveraged by organizations with automation claims processing solutions is a comprehensive mobile platform, which can improve both processing speed and customer satisfaction rates. A customer-facing mobile UI, for example, can make it simpler for customers to upload required information and documents with greater accuracy (than manual inputting). A separate mobile interface can aid third-party and in-house adjusters, as well, which reduces the time claims personnel must wait to receive critical information during the claims process.
For a deeper dive into Aberdeen’s research on the benefits of claims automation, download the full report: Claims Automation: The Future of Insurance.