Among other issues, paperwork-based claims processing results in inefficiencies due to several factors:

Manual data-entry: Manual data entry results in high error-rates and high labor costs.
High error-rate and unreadable forms: On average, over 60% of manually filled forms have mistakes, unreadable handwriting, or unreadable scans. Lost documents is another issue. When receiving incomplete or mistaken data, adjusters must communicate with the claims intake department to clarify inbound data and gather additional information. Then, customer representatives must contact the insured, creating friction and causing delays.
Incomplete data submitted by customers: Errors can also be introduced to both the data-entry team and the customers themselves. Such errors require back-and-forth communication with the customer to correct the mistakes, resulting in friction and delays.
Multiple data formats: Customer inputs end up in multiple media formats: paper, PDFs, electronic documents, scanned images, emails, or apps. All those disparate formats must be reconciled to streamline processing.
Lack of integration requires expensive automation solutions: The lack of integration capability between legacy apps that drive core processes and newer technologies require insurers to invest in automation solutions such as RPA technology to streamline processes. However, those projects are often lengthy and expensive.
Changing compliance requirements: Significant changes in regulations and compliance are a commonplace occurrence, greatly complicating the claims processing. In fact, following certain regulatory changes, the whole process might have to be completely overhauled. This can become a major drawback as far as claims experience is concerned, especially for insurers who operate across state lines and countries, each with their own set of laws and regulations.
Supporting technologies are expensive: RPA and OCR technologies significantly reduce the manual labor overhead, speed up claims, and streamline the back-end processing. But these technologies are not cheap, especially at scale. ZDNet estimates that the largest organizations are planning to invest $10 million to $20 million annually in RPA systems alone.
Bad customer experience: Manual claim processes cost insurers millions in direct costs. But the subpar experience during a sensitive claim process also costs them their customers and results in skyrocketing churn rates.

The paperwork crisis in insurance

To stay competitive, insurers must deliver outstanding experiences at every touchpoint. But claims experience is especially crucial: in the eyes of the customer, claims experience is probably the most significant interaction with their insurer.

Special Reports /

Challenges and solutions in streamlining the P&C claims experience

Related Stories

Recommended For You