One of the biggest hitches at the success of marketing is the leaking bucket. In marketing, the leaking bucket would be the situation where a marketer doesn’t know which of its marketing investment is paying back.
Lately, with the digital transformation in the insurance industry, companies have started using technologies to simplify the transition from policy issuance to claim settlement. One of the most functional technologies that have left no stone unturned in its pursuit of delivering perfection is artificial intelligence in insurance.
Before sharing our two cents on how AI is transforming claims processing around the world, let’s look at how claims processing is typically carried out in the conventional insurance industry.
The way the insurance industry works is pretty much the same in every part of the world. A person purchases an insurance policy, pays premiums and claims the insurance if something unfortunate happens to the insured asset or person.
There are various things that an insurance company settles claims for. The customer has to produce relevant documents to verify the incident and request the claim. The claim processing procedure would more or less include three steps:
However, easier said than done. The above three steps involve lots of document analysis and fact checks before handing out the final settlement amount. The conventional methods give way to many insurance frauds because sometimes the plots are well-crafted and humans error.
Manual execution of hundreds or thousands of paper-based claims is quite daunting. It is technically impossible to review and verify every claim thoroughly especially when thousands of claims are flooding in. Hence, insurance companies started pivoting on artificial intelligence.
Many insurance companies are now exploring the untapped potential of AI. The integration of AI in the business model ensures added value to the clients and the insurers.
According to a survey done by Accenture, “74% of customers would be happy to interact with modern technology and would like computer-generated systems of insurance advice.” In fact, people tend to rely on technology more than humans in today’s time.
Insurance companies who have already unfolded the vast horizon of digital platforms are witnessing a remarkable reduction in claims processing time and cost, increased accuracy, minimized frauds, and amazing customer service.
Depending upon the nature of your insurance business and its specific requirements, you can mould the applications of AI. Below are some of the key areas that are being taken care of by AI now.
First Notice of Loss: FNOL is the first notice sent to the insurer after the occurrence of loss, theft or damage of the insured entity. Hence, it happens to be the first step in claims processing. AI automates the collection of data and documentation related to the claim.
Customers can file a claim simply through chatbot enabled forms. After submission of a claim request, the chatbot also assures the customer a follow up from the members. Chatbots automation reduces the time lost in collecting and sorting data, freeing up the employees’ time to focus on more crucial tasks.
Surveying Damage: Once the customer submits pictures of damaged assets, AI compares it with images stored in the past and pictures of similar incidents, running through data to identify fraud patterns. It finally assesses the cost estimation based on the damage and market price of repair.
AI analyses video footage and images collected from the site to verify them and sends out the payout estimation, repairing information, reimbursement or rejection of the claim to the customer. It enables the employees to amplify their productivity and accuracy by leveraging AI
Settlement and Claim Closure: Not limited to FNOL and damage survey, AI also assists the insurer in paying out the settlement and closing the claim in time. Once a claim is approved, AI can automate the payout via the mode of payment that the customer opts for.
AI establishes real-time communication with the customers, generates and sends out invoices, verifies the payment, and closes the claim upon completion. It accelerates the payment of settlement and confirms the accuracy of the process.
AI in insurance certainly improves the overall process for the insurers while guaranteeing higher customer satisfaction and retention rate. One may assume that AI would take over human employment but that is not the case. AI rather works as a friend to human executives, enabling them to carry out their tasks with more proficiency and efficiency. The technology enhances the overall experience for everyone connected to the chain including the company, the employees and the customers.
Jaidev Chatanat is a thought leader in the space of marketing intelligence, customer service and digital transformation. He has been an advocate for applying the right digital transformative strategies and techniques for many decades for fortune 500 companies.
He is reachable for consultation on firstname.lastname@example.org