The concept of straight through processing (STP) has been used in the financial services market since the '90s. The idea is to reduce the need for human intervention and create fully automated business workflows that speed up transactions.
Thanks to improvements in software tools and artificial intelligence, STP can now apply to insurance claims because it enables carriers to be responsive, reduce the risk of errors, cut costs, and process claims faster. Automation combined with AI enabled start-up insurer, Lemonade, to process a claim in just three seconds last year. Let's take a closer look at some of the problems STP can address.
|Manual processing
Carriers are under pressure to reduce costs, but manual claims processing is time-consuming, labor intensive, and fraught with the risk of error. There are bottlenecks that slow progress down, hand-offs between siloes, and disparate systems and databases to search and collate. A single policy might necessitate data exchanges from multiple agencies, carriers and other third parties. Due to incompatibilities between IT systems and siloes, that data is often manually re-keyed.
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