Bridging Technology and Operational Excellence
For many years, the insurance companies have been battling the same enemy: paperwork, delays and repetition. A single insurance claim could be handled by five different people, go through three different computerized systems and be communicated through a dozen different emails before a single payment is made. The underwriter will have to re-type the information. The adjuster will have to locate missing documentation. The customer will have to wait. But now, insurance workflow automation is shaking up the whole picture.
Redefining Insurance Operations Through Automation
It uses software, business logic and artificial intelligence to automate the process in such a way that it does not require any human intervention. It is no longer the employee who will take the policy information from the email and type it into the main system, but rather the software will do it, verify it according to the underwriting business rules and send it to the right place. Insurance companies that implement insurance workflow automation usually begin with simple tasks that have a high volume of work.
The outcomes can be quite drastic. In December 2016, the insurance company Lemonade announced that their artificial intelligence claims bot, known as AI Jim, settled a theft claim in just three seconds. The system analyzed the claim, checked it against the customer’s insurance plan, executed 18 fraud prevention algorithms and automatically paid out the claim without any human intervention of an adjuster. Lemonade launched its operations in New York in 2016 and used this model since its very first day. It does not mean that all claims could be processed so fast, however, it is possible to show what a good and automated process can provide.
Enhancing Accuracy, Efficiency and Customer Experience
Apart from speed, automation increases the degree of accuracy. Software applies the same set of rules to all cases and, therefore, there is no possibility to make mistakes while manually inputting data. Compliance managers get audit trails showing who or what made changes to a document and when. Finance managers enjoy lower costs of processing each policy. Employees, in turn, have more time to make a judgment on complicated liability issues and difficult customer communication.
The customer is largely responsible for the pull. The individual who orders their groceries within minutes and moves their money around using a touch can expect the same thing from their insurance company. These customers want to be able to upload images of the damage, track the claims process, and get updates on it without having to call an insurance hotline. Insurers that do not provide these services could find themselves losing customers to their competitors who do.
Overcoming Barriers to Seamless Integration
However, there are some obstacles on the road. Most insurance companies still use core systems that have been used for decades and do not integrate easily. Bad data could cause major problems for the automation process, and regulators expect transparency regarding how these automated systems work, especially when it comes to decision making on pricing and claims. Employees might be worried about losing their jobs to automation.
Leaders of the industry believe that the wisest course of action is always to start small. The teams select one process, document all the steps, cut down on unnecessary approvals and automate the rest. They track the results in terms of cycle time and error rate and only expand after having achieved success in the first project. Successful initiatives also rely on human beings handling exceptions and ensuring that the complicated or sensitive issues receive their due. Insurance workflow automation is most effective when it serves rather than stifles humans.
The Next Frontier
Going forward, generative AI is driving progress even further. Insurers are experimenting with tools that allow them to summarize long claim files, generate customer letters and detect discrepancies in submitted documentation. Together with the already proven automation tools, these solutions can handle unstructured data like emails, scanned forms and images, which used to require human oversight. Analysts expect insurance carriers to integrate these solutions into complete end-to-end processes from quote generation to policy renewals instead of deploying them as pilots.
The move from bottlenecks to breakthroughs is well underway. Insurance companies that rely on paper and manual processes will continue to incur penalties through loss of clients and higher costs. Insurance companies that adopt insurance workflow automation will enjoy faster service, more precise processes, and more resilient systems and they will liberate themselves to carry out tasks that cannot be automated. The technology is no longer a faraway dream. It is a business reality, and the insurance companies that understand this will define the next ten years for the industry.
