The danger of 'working harder'
How automating claims processes can ultimately improve customer satisfaction and give clients what they really want.
In the changing world of insurtech, it’s important for companies to consider what innovations they’ve created that will improve their customer experience and customer satisfaction. Because whatever your company has — or hasn’t — done, customers are talking about it.
In recent years, and leading up to the pandemic, all types of carriers focused on making customer engagement more appealing, especially through the acquisition phase. It’s great to focus on ease of interaction between customers, agents and carriers. However, building a strong relationship with customers extends beyond selling a product.
Understanding why someone buys something is the first step to ensuring that they will be satisfied with their purchase, and maybe even bring new customers to you.
Beyond the mandatory aspect of certain types, let’s think a bit about why any customer concedes to buy insurance: for security. Customers ultimately are comforted to know they, their loved ones and their valuables are protected. Insureds also are paying for assurance that they will be able to repair that vehicle or fix the damage at home. So, a smooth, speedy and efficient claims process goes a long way toward satisfying and sustaining customers.
Why are some customers happier?
Let’s consider the approaches and results from two major insurance sectors: auto and property.
Within just a few years, we’ve seen digitization and new technologies that have markedly enhanced the claims experience especially for auto insurance — for both the insurers and insureds. A recent study by J.D. Power shows that auto insurance claim customer satisfaction continues to grow in auto’s claims management processes.
However, the same cannot be said for the property insurance claim processes. In February 2022, another J.D Power study announced that property insurance claim customer satisfaction has fallen to a five-year low.
Granted, the extraordinary circumstances of the pandemic surely contributed to the findings of both studies. Some caveats:
- Especially in early 2020, people stayed home, didn’t commute and drove less overall. With significantly fewer cars on the roads, fewer auto insurance claims were filed, so carriers were more responsive to those fewer claims. And because of multiple factors increasing vehicles’ market values, cash settlements for claims climbed higher than previously. Faster payouts of larger amounts delight customers for obvious reasons.
- Conversely, the pandemic made adjudicating and settling property insurance claims more difficult. In cases of catastrophic losses, the lockdown restrictions, supply chain issues, and workforce gaps meant longer timeframes to reach claims settlements. And nothing lowers customer satisfaction more than delayed payments after losses.
However, the trend of increasing dissatisfaction existed before the onset of COVID-19. So how to address and fix this issue today while preparing for the new unknowns of tomorrow? What should you be watching for as we move into the post-pandemic era and beyond?
Not all tools are transformative
Insurance carriers are wise to be responsive and lean on new solutions and technologies, or more importantly, to drive the insurtech industry toward building targeted applications that solve specific issues in processes such as claims management. But leveraging tools and technologies in the claims estimation process doesn’t necessarily pay off in the vitally important claims-settlement stage.
Real change is achieved when manual intervention is eliminated. Technology equipped with artificial intelligence and machine learning can manage data intake and classification, as well as many basic elements of claims processing, handling these tasks faster than any human can, and leaving people more time and bandwidth to do what they do best.
In recent years, insurers have emphasized enhancing the claims process through the use of tools to help estimate and digitize time-consuming claims-management activity. But the net improvement to the experience is nil. For example, insurtech tools promise claims adjusters that they can perform property inspections via satellite or drone images, or create super-detailed image analysis. Although helpful for decision-making, these enhancements don’t significantly reduce the effort nor time required — a large amount of thoughtful judgment and manual work is still necessary.
On the other hand, intelligent automation can be leveraged to streamline the complete claims process, dramatically transforming timelines and task loads. When your teams have more capacity and bandwidth, they can investigate and resolve claims faster while offering more thoughtful and personalized service, thereby improving your customer satisfaction rates and your employees’ day-to-day work experience.
Intelligent automation at work
Here are a just a few ways automation can improve your claims processes right now:
Intake or First Notice of Loss (FNOL)
How automation helps: It’s widely known that first notice of loss is one of the most time-consuming parts of the claims management process, requiring intake and classification of a large amount of structured and unstructured data which will be consulted throughout the remainder of the process. Machine learning may interpret and classify any unstructured data from claims to speed processing, allowing that information to flow into internal systems automatically via API or RPA-based integration. Eliminating manual input drastically reduces handling time per claim. While human supervision is available as needed, the most tedious parts of the process can be significantly reduced for employees.
Claim Validation
How automation helps: When reconciling a claimant’s confirmed information with their policy and coverage, the existence of digital records allows rules-based logic to perform straight reconciliation augmented by ML models, which allow for “fuzzy matching.” This capability addresses subtle differences between key fields across data sources. For example, if the policyholder is “Samantha E. Wilson” but the claim form is signed by “Sam Wilson,” a cognitive solution with sufficient training would recognize that these are probably the same individual.
Claim Investigation
How automation helps: During the investigation, an adjuster reviews and determines the potential liability of the insurance carrier based on the details of the claim. This requires contextual and cognitive judgment, but intelligent automation can process even unstructured information from open-source content and navigate internal systems. Human experts may still finalize the analysis but would reach their decisions more quickly.
Fraud Detection
How automation helps: For certain types of claims, rules-based tools can generate potential fraud alerts based on data points from previous interactions, details of the claim or amounts of money. However, this approach can result in many false positives. Intelligent automation offers an analysis of those factors and can eliminate most of these distractions. Additionally, it can process unstructured information from open-source content to facilitate an investigator’s research. For example, using cognitive AI to search social media accounts might reveal potentially incriminating details. Ideally, this enables the fraud investigator to act faster.
Claims Adjudication & Settlement
How automation helps: When due diligence is complete, underwriters or adjudicators can establish the extent of liability to the customer. Like claim validation, this process involves swiftly reconciling confirmed information from the claim, the customer’s insurance policy, and their payment history at the time of potential settlement. Intelligent automation can compare data against digital records and information provided during intake. Further, automation opportunities can speed up the settlement process, meeting operational and compliance needs centered on audit and compliance analysis, financial reporting, and quick-pay claims.
When automation handles the most time-consuming and tedious tasks, your talented employees can leverage their expertise for decision-making and better service, resulting in faster resolution and settlement of claims with enhanced customer satisfaction.
You might tiptoe in with only automating specific tasks as laid out earlier; or, keep an eye out for more comprehensive, industry-specific solutions that package multiple tasks into the equivalent of entire roles, as leading providers create powerful digital workers that can collaborate among themselves and with their real-world counterparts on your teams. An automation vendor specializing in the needs of insurance and other regulated industries can point you to actionable solutions to suit your organization.
It’s worth asking yourself: As a carrier, are you in danger of losing business to more innovative competitors? Because dissatisfied customers won’t stay unhappy for long — and they won’t stay with you.
Rajesh Datta (rdatta@workfusion.com) is SVP, Insurance; Paul Gozzo (pgozzo@workfusion.com) is Head of Automation Consulting; and Amy Winn (awinn@workfusion.com) is Editorial Lead at WorkFusion.
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