Claims management is a moment of truth for insurance companies. How they manage their claims process affects both customer retention and bottom lines. For instance, in a survey, 83% of the respondents who were dissatisfied with their claim handling said they had switched or planned to switch to another insurer. On top of that, claims and associated expenses make up ~70% of an insurance carrier’s total expenditures. Not to mention the billions of dollars lost to insurance fraud every year. It’s clear that claims management as it stands is in dire need of transformation. And that’s where technology steps in.
Four ways artificial intelligence is transforming claims management
- Improving process efficiency – Claims management is a document-intensive process where manual teams are often left to dig out relevant information from a variety of structured and unstructured documents. From the first notice of loss, it could take days for a claim just to get logged into the system! AI could remove the inefficiencies in this process, make data collection and extraction a matter of minutes, and fast-track the final pay-out. The result? Happier customers. What’s more, we’ve helped our clients cut down cost per claim by 80% leading to millions of dollars in savings.
- Preventing fraud – Speed isn’t everything when it comes to managing claims. Yes, you must keep the customer happy, but you also have to consider the impact a fraudulent claim has on other customers. While AI can speed up the process, it can also provide invaluable insights to identify fraudulent claims quickly.
- Improving the productivity of claims assessors – Computer vision and deep learning algorithms can make the job of a claim assessor easier and drastically reduce the cost of claims processing. For instance, by analyzing photos, AI can detect the extent of rooftop damage due to a storm and separate it from regular wear and tear. It can also check the claim’s veracity by checking weather conditions based on the geography and date of loss. The insights from this analysis remove the need for the assessor to visit these properties saving time and expenses. The AI can altogether remove the need for human intervention by assessing the damage’s extent, categorizing it, and estimating pay-out. This means a claim can be logged, assessed, and paid out in a matter of minutes instead of the days and weeks it takes today.
- Predicting litigation – Customers unhappy with the claims settlement could challenge it in court. Ensuing litigation could mean hefty legal costs for the insurer. Manually analyzing data to predict the propensity of litigation for every claim with any sort of accuracy is an impossible task. However, AI can make it possible. It can quickly analyze data related to the claim, claimant, the past legal case histories of similar claims, and the final settlement to predict whether the claimants will go to court. These insights help insurers take proactive steps for an amicable settlement.
Getting a head start on cognitive claims
We live in the age of information. The sheer volume of data available as documents, images, videos, etc., to process a claim is becoming a challenge for insurers depending on manual processes. However, what is a challenge for human capability, can become an asset with AI deployment. With AI-enabled claims, insurers can boost the productivity of their teams, fast-track processes, sky-rocket efficiency and significantly reduce costs, all the while improving customer experience and, therefore, retention. Claims transformation is inevitable; the question is, how fast do you get to it.
Authored by Sushmita Allam