From the short stories of Isaac Asimov to “2001: A Space Odyssey” and beyond, artificial intelligence, or “AI,” is often associated with science fiction. But this once-fantastical concept is making a big impact on today’s businesses. In recent years, AI has been gaining traction as an everyday tool for automating business processes in the insurance industry as providers strive to better manage big data and improve responsiveness to customers to drive revenue and achieve better overall outcomes.
Here are four ways AI is paving the way to smarter, more efficient claims processing:
- Faster End-to-End Automation
Although many insurers are investing in more digital solutions to streamline business processes and increase efficiencies, much of today’s claims processing still surprisingly involves a significant amount of manual effort; the handling of a claim still requires matching the request with customer information that resides in various systems and databases. Finding this data, such as policy holder status and associated entitlement to reimbursement, and automatically processing the claim accordingly, presents a big hurdle in increasing straight-through processing (an initiative used by companies to optimize the speed at which transactions are processed).
By leveraging AI for business, insurers can eliminate much of the manual and repetitive nature of the claims process to achieve better end-to-end automation. AI helps to integrate information exchanged between disparate systems for seamless claims handling and faster straight-through processing. This enables insurers to shorten the claims cycle, all while enhancing the customer experience and cutting down on costs.
- More Insightful Response
There is no doubt that in today’s marketplace, the customer is king. And what insurance customers want is speedy claim processing, seamless communication across multiple channels, including phone, email and social media, as well as the ability to do their own research when desired and for someone to step in and show them the way when not. But the more disjointed and manual that processes remain, the greater the gap between customer expectations and the level of customer experience delivered.
AI helps to create an omni-channel experience for all stakeholders involved in the claims process, from the contact center staff to the claims agent. By improving the flow of information between these parties and incorporating various data sharing and communication channels, insurers can create a 360-degree customer view that enables them to deliver quick and consistent responses and superior customer experiences.
- Strategic Fraud Prevention
Fraudulent claims cost the insurance industry $30 billion annually[1]. Unfortunately, in most cases, fraud analysis is done after the fact, as opposed to while it’s happening, when it would be easier to stop or mitigate. Some insurers employ hundreds of specialists using innovative technologies and network analysis tools to help prevent fraud. Yet, a higher degree of automation is sometimes seen as “opening the door” for it, as fewer claims agents are handling the claim and may notice suspicious activities.
AI uses intelligent automation, pattern-spotting, and self-learning capabilities to help recognize potential fraudulent claims. Its contextual understanding capabilities, combined with the ability to connect with other systems, allows insurers to sift through vast quantities of information and monitor the complete communication history of each customer to quickly spot anomalies and segment cases that pose a higher risk of fraud before they occur.
- Priming the Next Generation of Claims Agents
Many insurers are struggling to leverage the experience of their current workforce while bringing on new workers in a controlled, productive manner. There is expected to be a 3 percent shortage of claims adjusters in the next decade[2] and many claims managers are concerned with the “lack of incoming talent” and with companies that aren’t willing to spend money to attract and retain experienced employees.[3]
Luckily, for insurance providers AI-based solutions can be used to pass down valuable knowledge from one generation of agents to another. By creating a knowledge transfer system, insurers can quickly train inexperienced agents while lessening the impact on cost and customer satisfaction. Additionally, it helps optimize workflows for the handling of claims so agents can be better matched with tasks and roles based on their areas of expertise, and newer employees can get up to speed more quickly.
In many ways, the stakes have never been higher for insurance companies. According to a report by Capgemini,[4] only 30 percent of insurance customers worldwide rated their customer experience as positive. Lower barriers to changing providers coupled with higher expectations from policyholders regarding responsiveness to claims put enormous pressure on insurance carriers. But while policyholder expectations for superior customer service continue to increase, AI-based solutions are helping insurers become more flexible and adaptable in the highly competitive markets they serve, ultimately resulting in more satisfied, loyal customers.
Notes:
[1] Insurance Information Institute Report: Why Mobility Matters to U.S. P&C Insurers, Cognizant
[2] Deloitte: 2013 Property & Casualty Industry Outlook
[3] Claims Journal 2013 Jobs & Salary Survey
[4] World Insurance Report 2013, Capgemini, 2013