Why AI? 7 benefits of AI-driven insurance claims management
AI-powered solutions are transforming the way insurers manage claims, compliance, and the customer experience.
Read time: 6 minutes
Digitization and automation in the insurance sector have both been gathering momentum over the last five years, with an exponential boost provided in 2020. With that, a new kind of customer has emerged; one who is now accustomed to the convenience, speed, and instant gratification of a digital world; a customer who now demands 24/7/365, always-on, anytime, anywhere access to their insurance provider.
So, it’s no surprise that as revealed in a recent Deloitte survey, a staggering 95% of insurers say that they are currently laser-focused on accelerating their digital transformation initiatives. That focus is largely on claims management which, according to Deloitte, is going to be the new behind-the-scenes battleground for transformation, differentiation, and importantly, automation. Considering that typical straight-through processing rates are at less than 10%, it’s easy to see why insurers must make use of the technologies that can dramatically boost data accuracy and help set up “clean claims.”¹
How Artificial Intelligence is transforming the claims management industry
Which technology is leading that charge? Artificial Intelligence (AI) and the implementation of AI in claims management. What, exactly, is AI? It's the application of advanced analysis and logic-based techniques to interpret events, automate decisions and initiate actions. This is made possible with the application of Machine Learning (ML), which enables the creation of algorithms or statistical models that can convert a series of data points into a single result. ML algorithms learn to identify patterns and correlations in data through “training,” which they can then use to provide insights and predictions without being explicitly programmed to do so.
By 2025, 60% of claims will be triaged with automation.² Forward-thinking companies are utilizing intelligent technologies, such as AI, to:
Accelerate claims processing
Increase throughput and accuracy
Deliver an enhanced customer experience
Meet industry compliance and regulatory agency requirements
Protect data and business continuity
Support a decentralized workforce
Improve claims volume forecasting
1. Accelerated claims processing
Through the use of AI in claims management, an automated claims processing workflow can optimize human-in-the-loop processes, speed processing times, mitigate fraud, and enhance the customer experience. A claim is not, unfortunately, a single document. A single claim can include a packet of several documents – some paper-based, others digital – such as:
Claimant’s identity and personal information
Medical, damage, and accident reports
Notice of loss reports
Photographs and videos
Damage repair estimates
Government agency reports, and more
No matter the source or form of the document, however, AI can automatically capture, collect, extract, analyze, and validate what it determines as relevant data… and, with incredibly reliable accuracy. How? By utilizing enriched data analytics and quickly figuring out what to look for in defining the document type. It then identifies key data fields to pull out of each document type and determines where to feed that data. The resulting claims process is now automated, accelerated, and far more efficient. The process is also considerably more “human friendly.”
2. Increased throughput and accuracy with the “clean claim"
Leveraging sophisticated AI/ML technology, insurers can build a highly automated claims intake process that means fewer manual tasks. Manual processing, of course, can lead to errors that result in customer attrition, inaccurate claim payments, and an increased susceptibility to fraud.
The key to efficiency in claims management is the establishment of “clean claims.” However, even with the most sophisticated AI claims automation tools in place, tech-savvy individuals who can perform the “human-in-the-loop” tasks are still an essential component to clean claim processing. Here, the insurer may choose to rely either on the company’s internal resources or outsource the “human touch” tasks to a third-party team of experts.
3. AI can deliver a better customer experience
Due to the very customer-service-focused nature of the industry, insurance companies are particularly vulnerable to customer attrition. To further complicate customer service for insurers, today’s customers demand real-time, anywhere, anytime responsiveness to their needs; what is today often referred to as the “touchless customer journey.” This consumer demand is accompanied by an extremely low tolerance for failure to deliver.
At the same time, insurers rely on their Net Promoter Score (NPS), to attract and retain customers. An NPS is influenced by anything that changes the way a customer feels about the quality of the service they receive. Are they receiving the timely, meaningful interactions they’re looking for? This is where AI – with its ability to create more meaningful interactions between information systems and human beings – can assist with NPS. And the ubiquitous chatbot, or “conversational assistant,” is a perfect example.
Through AI, chatbots are capable of “learning” from each customer engagement. The assistant enhances its knowledge base with each interaction, making it increasingly effective with each engagement. Additionally, a chatbot responds almost instantly, regardless of call volume. But answering fast is not enough. Beyond simply answering customer questions, a chatbot can be integrated with an organization’s information systems; capable, even, of managing personalized customer inquiries, such as a request for a payment history. This not only frees agents to focus on more complex issues that demand a true human touch, but also improves time-to-resolution, overall customer satisfaction, and renewal rates.
4. Take the complexity out of compliance
Claims and costs are driven by regulations and compliance, and there are few industries as heavily regulated as Financial Services, with insurance companies leading the pack. Meanwhile, the gap between the surveillance capabilities of regulators, and the insurance company teams responsible for compliance, is widening.
Utilizing AI-driven compliance solutions, insurers can ratchet up their workflows to effectively navigate an ever-increasing, and evolving, compliance landscape. AI solutions can drive workflows in the areas of auditability and transparency. These workflows enhance the compliance team’s ability to protect and validate data and with that, mitigate the risks associated with regulations set forth, for example, by the California Consumer Privacy Act (CCPA), its amended California Privacy Rights Act (CPRA), the Gramm Leach Bliley Act (GLBA), and the Health Insurance Portability and Accountability Act (HIPAA), to name just a few.
5. Protect data and business continuity
Claims processing requires the storage and management of vast amounts of data. Like any information repository, an insurer’s data management system is susceptible to cyberattack and data breach. AI/ML can quickly stem a costly and reputation-damaging cyberattack with its ability to “study” and identify existing data similarities and patterns. It then seeks to recognize those same characteristics in all incoming data. Should it detect an anomaly, it will notify a user or network administrator, preventing both downtime and potential data loss.
6. Improve claim volume forecasting
Insurers rely on volume forecasting to set the proper premium at the start of a contract, and the ability to forecast claim volume – precisely and reliably – is a critical component of this process. Custom AI models, driven by Machine Learning, are capable of quickly and accurately analyzing claim data that can assist in forecasting the complexity, as well as the amount, of individual claims; the impact of which cannot be overemphasized. Large claims with uncertain outcomes, for instance, can now take precedence over smaller claims with more predictable outcomes and resources allocated accordingly. The result? Improved claims triage, business results, and customer experience.
7. Support a decentralized workforce
In our post-COVID-19 world, according to Gartner, 48% of U.S. employees now work virtually. Gone are the days of face-to-face collaboration among underwriters, adjustors, and support staff members. As work shifts to remote, insurers must shift to AI-driven information validation and sharing solutions. What do these solutions bring to the table? Instant, secure access to all claims data from any device, anytime, anywhere. Reliable capture, validation, and accuracy of data. The elimination of manual processes that would often result in time wasted in the search for physical documents or recreating lost ones. Near real-time access to actionable insights across individuals and departments that can further enhance claims processing operations. And that’s just the beginning.
About Ricoh's Intelligent Business Platform (IBP)
Automate and accelerate claims processing with IBP Claims Management
“Claims operations that have been traditionally treated as outputs of a ‘reactive back office’ will have to become a powerful differentiator; innovative in nature, uncompromising on customer service, multifaceted in the capability of its talent, and capable of driving strong results.”³
Ricoh’s Intelligent Business Platform (IBP) Claims Management solution is designed and built to automate and accelerate the capture, intake, and validation of all your inbound claims – across both digital and physical channels — as well as provide robust analytics, SLA reporting and hosting services.
Leveraging our sophisticated technology and deep industry expertise, we help build highly automated claims intake processes that deliver dramatic efficiency gains with confidence, assurance in data accuracy and security. Our Claims Management services empower organizations to expedite claims resolution to drive what matters most: customer satisfaction, loyalty, and retention.
Increase throughput and accuracy - Automatically extract and validate data for faster claims processing — with assured accuracy of best-in-class computer vision technology.
Set up “clean claims” to accelerate workflows - Optimize straight-through processing and automatically populate relevant claims data into existing systems to accelerate workflows.
Boost customer satisfaction and retention - Shorten claims resolution times to drive higher NPS and CSAT scores, enhance loyalty, and improve retention.
Protect data and business continuity - PCI-Certified platform safeguards critical data to ensure compliance and help prevent downtime associated with data loss.
Support decentralized workforces - Empower decentralized teams and agents in the field to quickly access and share claims information — anytime, anywhere.
Low-capital, scalable solutions - Deploy quickly and without large upfront capital costs — and scale up and down easily to meet your needs— with a consumption-based, as-a-service model.
- 1Cybersecurity in Insurance - Thematic Research (globaldata.com) GlobalData. June 28, 2022. https://www.globaldata.com/store/report/cybersecurity-in-insurance-theme-analysis/
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