According to a McKinsey report, there is 43 percent automation potential for the BFSI industry. It is stipulated that in a few years, one-fourth of the task force in the insurance industry will either be consolidated or replaced by automation technologies. As such, insurers are now aggressively looking to adopt intelligent automation powered by technologies like Artificial Intelligence, Machine Learning, and Robotic Process Automation. When implemented correctly, they can make processes more efficient and reduce operating costs. One of the critical business processes being transformed by automation is claims. Agencies are either modernizing their legacy systems or integrating them with modern solutions to improve claims processing.
So, what does all the buzz surrounding automation in the insurance industry entail? And most importantly, how can insurance claims process automation help businesses and their customers? Let’s find out.
What are the Challenges with Manual Insurance Claims Processing?
Manual insurance claims processing is usually plagued with the following challenges:
● Higher cost of processing
● Lack of proper management and coordination
● Siloed data and departments
● Delayed claims settlements
● Human errors and inaccuracies
● Disconnect from claimants and customers
Advantages of Automating the Insurance Claims Process
Insurance claims process automation lends an array of benefits. When done with the help of a software, insurance agencies can unify various tasks and divisions including data management, file creation, workflow automation, claims resolutions, and more. This not only makes the claims process smoother but also simpler. Here are the major advantages of automating insurance claims.
Insurance agencies gather a lot of information from policyholders when processing claims. Usually, the customers have to fill out and submit certain forms during the process. With the help of insurance claims transformation tools, agencies can automate data entry and form filling. They will not have to hire resources for managing the information. Moreover, data entry is a vital yet time-taking task that is prone to errors and duplicates.
Automation tools can also be used for interpreting the data entered in the forms and consolidating it in a unified database. It expedites claims processing and enables agencies to enhance the customer experience.
The audit process can be very time and resource-consuming. Collecting all the relevant data and documents is probably the hardest part of the process. Using a claims system allows agencies to integrate information from various sources and decisions and offer end-to-end visibility for ensuring that nothing falls through the cracks.
Insurance claims process automation, when done using unified software, enables insurance agencies to keep a record of all client and claims-related activities and create a clear audit trail. Hence, when it is time for an audit, all the requisite data is easily available. Apart from saving time and costs, it also improves accountabilities and allows agencies to detect problems, gaps, or fraud.
Better Resource Utilization
Optimizing regular admin duties with automated claims software enables employees to focus their attention on more creative and complex tasks that cannot be properly automated. Judicious allocation and utilization of skilled resources can help agencies save a lot of time and improve employee satisfaction.
Remunerating experienced employees for performing rudimentary jobs that can be performed quickly and effortlessly using a software is not cost-effective and can result in higher employee attrition and dissatisfaction. By automating mind-numbing tasks, an insurance agency can also accomplish more with fewer resources, thereby saving costs associated with finding, hiring, training, and retaining staff.
Higher Privacy and Security
Paper-based documents that contain confidential information can be easily lost or stolen. The insurance industry is highly regulated and agencies must take all measures for protecting crucial business and customer information.
Insurance claims transformation involves digitizing the data storage. The document management systems help in keeping the information safe and allow agencies to meet GDPR norms. Data breaches and leaks can be a costly affair for businesses and can negatively impact the company’s reputation.
Less Storage Space
Storing paper documents demands significant physical storage space, which in turn requires financial resources. Office space can be expensive, especially for growing agencies. Paper-based files also involve other expenses including the cost of paper, printing, filing cabinets, storage tools, and more.
As insurance claims process automation is becoming more and more common in the industry, records and files are now being digitalized. As such, agencies no longer have to store large volumes of physical documents. Digital archives do not demand physical storage spaces. They can be easily maintained and retrieved as and when required. Moreover, it also helps agencies in going paperless.
Enhanced Customer Experience
In a traditional business setup, when a claimant submits an insurance claim, they usually do not get regular updates or notifications regarding the process. They end up having to wait until the results, and this can be frustrating for modern-day customers.
Insurance claims transformation can help agencies offer regular updates to customers and make the claims processing more transparent. Clients can sign in to the portal to view the status of the claim and may also get notified through email or text messages.
Automated claims solutions are less likely to make mistakes than their human counterparts. In the insurance claims process, the smallest of errors can cause a domino effect and add up to big dollars for the business. Given that a majority of mistakes and inaccuracies can sneak in during the data entry or processing phases, digital tools can help curb its effects and protect the agency from getting into hot waters. This also cuts down the back and forth that might arise out of inconsistencies and lowers the number of statements that the agency will have to issue or reissue.
All in all, insurance claims process automation is essential to stimulate agency growth. When done correctly, it can help in identifying and resolving issues, fraud, and bottlenecks. It also streamlines the process and allows agencies to process and settle claims in a timely manner. Moreover, it transforms the agency into a future-forward business that can readily anticipate and respond to changing conditions.