Innovation for insurers begins in the back office
Insurance forms, documents and supplemental materials won't be going away anytime soon.
Global investment in InsurTech continues to grow, with a record $3.26 billion invested during the first three quarters of 2019 alone. Driving this growth is the need to automate core processes to improve efficiency and boost the customer experience amidst growing competition from both established players and smaller firms.
What has been a stumbling block for many insurers is the inherently document-intensive nature of the industry. From policy applications to complex multi-page, handwritten forms for claims reimbursement, more and more data is required to effectively assess risks and serve customers. And this data often comes in the form of paper documents, images, or electronic forms that are incompatible with enterprise systems and databases.
While it’s nice to think about a paperless future for insurance, the truth is that forms, documents and supplemental materials — whether electronic or paper-based — won’t be going away anytime soon. Independent agents will continue to require that customers fill out paperwork for new policies or to make changes to existing ones, and a subset of customers will continue to mail in their medical receipts and claims forms for reimbursement.
As a result, insurance companies continue to spend billions of dollars and hundreds of thousands of hours on manual data entry. This process is required to extract the relevant information from these pages and get it into the correct system of record for downstream processing.
But as insurance companies work to service customers and stay agile in today’s fast-changing world, we can expect to see more insurers embracing automation. By eliminating slow, tedious and error-prone manual data entry challenges, insurance organizations can more effectively capture information, enabling them not only to save time and money but also to make decisions and get back to customers more quickly.
Boosting customer satisfaction
Since a superior customer experience is a competitive differentiator, it has been a top focus for most insurers. For the most part, insurance customers don’t have complicated needs. They want a selection of reasonably-priced policies, access to clear and accurate information, and quick, hassle-free interactions with knowledgeable employees.
For example, when they’re filing an automobile claim, they don’t want to wait weeks — or even months — for a decision to be made, forcing them to pay the up-front money for repairs or rent a car or go carless in the interim. Individuals expect to get quotes, answers, and service quickly, and if a life insurer can’t provide a quote for a new policy within hours, the prospect will simply move on to the next carrier.
The reality, however, is that most insurers are failing to deliver a consistent, positive experience. According to Accenture, less than one-third of insurance customers say that their current providers are making customer interactions simple and easy. Further, according to a Forrester study, more than 30% of customers who endured a bad claims experience switched insurers within a year of the incident.
To resolve this problem, front-line representatives need accurate and up-to-date customer and account information, as well as an understanding of different policy changes and recent account activity. This not only helps them to provide reliable information to customers, but it also helps them to quickly process claims forms and supplemental materials, as one example, to determine and deliver benefit payouts.
Traditional back office processes
While the customer judges service based on interactions with staff, it actually begins in the back office. It is here where poor processes and manual operations can create the problems that stifle the flow of information between the customer, insurer and its partners.
Often the culprit is outdated, manual workflows that make it nearly impossible to systematically process documents and extract the data needed to assess risks, price policies and make other decisions. Many insurance firms are still relying on teams of data keyers to index and route documents, extract the correct information and get it into a compatible, usable format for downstream processing. This is made more challenging because these documents come in many forms — emails, faxes, cell phone photos and more, and there’s often little or no standardization between the forms received and the databases that must be populated. These documents might have crossed out lines, information in the wrong field, fax marks or other degradations that are common in real-world business processes and customer interactions. What’s more, manual workflows are ripe for human error, which has both financial, reputational and most importantly — human — consequences.
With this picture in mind, it’s not surprising to learn that a 2017 McKinsey Global Institute report found that nearly half of the time spent in the insurance workplace involves collecting and processing data — two tasks with high (60%) potential for automation. (And it’s not just entry-level workers who spend time on manual entry; individuals making over $200,000 each year also spend around 31% of their time processing data.)
Using AI to automate better data capture
In addition to promptly addressing customer questions and providing a positive customer experience, the key to smarter decisions about who to underwrite or how to stop customer churn all depends on the quality, accessibility and reliability of data.
In an increasingly competitive industry, leading insurance companies are putting customer experience front and center in their business strategy, and this starts with casting off the error-prone and inefficient data collection processes of the past and embracing a smarter, automated approach. Advances in artificial intelligence — and machine learning, specifically — are helping computers to think and perform more like humans, reading documents with sophistication and context so that data can be captured accurately — and in the right format — the first time.
By letting AI do the collecting and processing of data, insurance organizations and their employees can put their attention back on the customer, where it belongs.
Charlie Newark-French is the chief operating officer at Hyperscience, an automation company that enables data to flow within and between the world’s leading firms in financial services, insurance, healthcare and government markets. He can be reached on LinkedIn or by email.
These opinions are the author’s own.
See also: