A great deal of attention — and investment — has been directed at insurtech start-ups as they deploy new technologies, processes, and skills to compete with incumbent companies. The amount invested has fallen from the lofty peaks of 2021 but still stood at $2.41 billion in Q2 2022 according to a report from Gallagher Re. This wave of innovation has put legacy insurance firms on notice that this is no time to be complacent.
Fortunately, the innovations that are behind insurtech unicorns are readily available to legacy insurance firms as well. Careful application of these new innovations can deliver big rewards for existing companies and the discipline of straight through processing (STP) is a prime example where gains in efficiency and profitability can be won.
Four Areas for STP Gains In Insurance Claims
Technology transformation and modernization can deliver big gains in a number of different ways. Increasing efficiency can have a direct impact on the bottom line and improve customer satisfaction as well, thereby boosting both profitability and customer retention. Specifically, new approaches can support customer reporting portals, increase usage of data, help focus on utilization of resources and deploy new technologies to provide faster service and enhanced insights.
Below are four areas where insurance providers can leverage technology for increased efficiency and improved customer experience:
1. Customer Portals
Reporting portals are a critical touch point between insurer and client, but legacy technologies are often slow, cumbersome, and require a great deal of time and effort from customers and company alike. Utilizing new technologies and processes for First Notice of Loss (FNOL) can dramatically improve the customer experience while simultaneously lowering costs by minimizing demands on employees.
2. Data Processing
Data is the lifeblood of the modern digital enterprise, but too much of it is tied up in physical documents that were previously inaccessible. The advent of natural language processing (NLP) and robotic process automation (RPA) have made more information available and the processing of all data more efficient. In a win / win, insights can be increased while costs are reduced.
3. Claim Segmentation
All businesses benefit by focusing resources where they are most beneficial, and the insurance claims process is no exception. By segmenting claims so that lower-value items are automated to avoid costly human intervention — and using AI / ML tools to learn from and improve the assessment and adjudication process of all claims — resources are optimized, insights are increased, and processes can be tweaked to maximize efficiency.
4. Claims Adjudication
New technologies can extend beyond the normal bounds of the enterprise, often making a dramatic impact on efficiency, customer satisfaction, and bottom line performance. One example is the use of Internet of Things (IoT) devices that can trigger FNOL processes and provide data for claims adjudication. A prime example is the use of smart sensors in connection with flood insurance. Sensors such as these can kick in as soon as a flood event takes place, helping the insured to get a quick response while gathering data to quantify to claim and rationalize response outcomes. Importantly, “customer delight” at such prompt and painless service can help dramatically increase customer retention.
A Bright Future for Insurance Claims Processing
The emergence of insurtech disruptors has led to some hand wringing and worried concern on the part of incumbent insurers, but the news isn’t all bad. The same technologies, processes and insights that drive insurtech innovation can be deployed and leveraged by incumbent insurance companies to good effect. While digitally native insurtech disruptors often have an early head start, incumbent insurance companies can learn from these efforts and then turn their natural advantages of size, customer reach, and industry experience to their benefit. Claims are a great place to start.
Maven Wave, an Atos company, has extensive experience in helping to drive change initiatives in the insurance industry to deliver innovative business outcomes — fueled by cloud — with risk and innovation top of mind. To learn more about innovation in insurance claims, download the white paper “The Future of Insurance: How Insurance Leaders Can Stake Their Claim” today.
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