Insurance claims processing is complex and requires many small processes to align with each other to deliver efficient outcomes. The speed at which insurance data gets generated every day makes the process even more complicated, requiring a solution that can harmonize it and leverage it for business insights. It is in the business interest of insurers to use AI-powered solution to leverage claims data to gain insights to become more efficient and deliver better and faster service to their customers.
Claims processing is data-intensive and time-sensitive. A good claims settlement process allows an insurance company to give excellent service to its customers with timely settlements and accurate payouts. AI-powered solution can go much further than just making the process efficient. It can offer many advantages, such as fraud detection, payout estimates, subrogation potential prediction, fast-tracking claims, litigation probability detection, and BI leakage propensity calculation.
Insurance Claims Processing Challenges
Fraudulent claims cost the insurance industry more than USD 40 billion per year. Covering the costs of fraud requires an increase in premiums, which costs the consumers anywhere between USD 400 to USD 700. It also impacts the service quality offered by the insurer as the revenue takes a hit, and there is less surplus available for other consumer-friendly initiatives. Ultimately, customer satisfaction dips, and the insurer stands to lose customers in the current scenario when retention is critical for keeping a competitive edge.
As insurance companies want to reduce fraud, they set up stringent authentication processes and use the services of SIUs (Special Investigative Units) to ensure that the claims they are settling are genuine. Referring claims for investigation further hits the revenue, as insurance companies need to pay the SIUs for their investigative efforts. Keeping everything in sync becomes very difficult for insurance carriers.
Similarly, if seemingly straightforward cases get delayed due to the authentication process, customers tend to become annoyed with their providers. When customers have a less than satisfactory claims settlement experience due to delayed or inaccurate payouts, they are bound to consider switching insurance providers.
Challenges like inaccurate payouts, delayed settlements, and identifying fraudulent claims can be tackled more effectively if:
- The concern can be identified early in the cycle, and,
- There is a possible solution available for the insurers
The AI Advantage
AI-powered solutions that are developed with machine learning and deep learning capabilities are able to fulfill both of these criteria. Deep learning capabilities allow the solution to glean information from structured as well as unstructured data. For example, an advanced AI solution can scan the image of an incident and assess the damage. It can also “read” the adjuster notes, including their shorthand, mentioned on forms filed along with the claim.
Machine learning capabilities of a pre-trained neural network further allows the solution to look at historical data and find patterns indicative of fraudulent or authentic behavior in the past. It is also possible to integrate information from external data sources, such as location, police report, criminal database, and weather conditions, to further assess the authenticity of the claim as early as FNOL (First Notice of Loss).
AI Benefits Everyone
The modern insurance ecosystem has the potential to bring the customers, insurers, and their employees on the same page. Everyone wants the right claims to be settled as quickly as possible, with the least possible hassle and expense, and AI can make it so.
The acceptance of AI-driven solutions is evident in these numbers:
- 75% are okay with receiving customized insurance advice generated electronically by analyzing their preferences
- 74% prefer to interact with modern technological platforms
- 78% would consider financial advice offered by a virtual assistant
- 82% believe AI can transform the way information is obtained from customers
- 53% believe they can benefit from improved insights into customer requirement
- Have invested USD 124 million in AI-related technologies
- Chatbots, powered by AI, used to deliver effective customer service, available 24/7
With the growing acceptance of AI among both insurers and their customers, it is now possible to move forward with more innovative solutions that are focused on delivering outcomes that can ultimately take the claims settlement process towards becoming highly accurate and fast.