KEY TAKEAWAYS:
--Modernizing legacy systems and accelerating as many manual steps as possible is crucial. Legacy systems can often be a bottleneck, as they can be slow, difficult to update and prone to errors.
--Another important way to accelerate processes like claims is by automating some of the necessary communication with policyholders.
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The need for speed in the insurance industry is evident, especially when it comes to claims. According to a recent report by Insurance DataLab, the claims management process still draws the highest number of complaints from policyholders. In fact, more than 80% of complaints about each of the top five insurers over the last five years were about the claims process.
So why is assessing and approving claims still so time-consuming and complex?
The short answer is that there are still too many manual steps involved. Imagine a scenario where a policyholder submits a claim for a car accident. With traditional legacy systems, the insurer has to go through the physical evidence, manually input the claim details into their system and then assess the claim’s validity. This process can take days, if not weeks, leading to frustration and dissatisfaction for the policyholder.
These legacy systems can often be a bottleneck for insurance companies, as they can be slow, difficult to update and prone to errors. This is why modernizing legacy systems and accelerating as many manual steps as possible is so important. Accelerating claims processing times is not only essential for staying competitive but also for driving growth and profitability.
See also: Making the Claims Process More Efficient
Putting claims underwriting on the fast track
The good news is that digital platforms and tools are making it easier to accelerate many of the manual processes insurers deal with every day, including claims underwriting.
With these digital platforms, policyholders can submit their claims online or through a mobile application, and insurers can instantly receive all the necessary details and supporting documentation. Once a claim is submitted, advanced algorithms and artificial intelligence (AI) can accelerate the process even further, for instance in assessing the validity of the claim or detecting fraud. These algorithms can analyze various factors, such as policy coverage, accident reports and historical data, to determine the appropriate amount of compensation to be paid.
According to a PwC study, insurance companies typically allocate 70% of their IT budget toward maintaining legacy systems. Before diving into full automation with AI, upgrading legacy systems to accelerate as many manual steps as possible is a priority that insurers shouldn’t overlook. As these systems age, the cost of upkeep increases, but this cost is often surpassed by the missed opportunities and higher expenses incurred from manual processes.
By modernizing existing systems, insurers can be confident that any new technologies they wish to introduce, such as AI, will integrate seamlessly with their existing infrastructure and data and put them on the right path toward faster, more accurate underwriting decisions and a better customer experience.
Making space for more customer self-service solutions
Another important way to accelerate processes like claims is by automating some of the necessary communication with policyholders. Instead of time-consuming phone calls, insurers can use online portals or mobile applications to provide updates on any claim’s status. Policyholders can easily track the progress of their claims, eliminating the need for constant follow-ups and reducing frustration.
Today’s consumers expect to receive immediate support when they need it, and providing exclusively in-person or phone support no longer meets these expectations. Additionally, it’s not just the younger generations that prefer digital options. Among customers 55 and older, 71% prefer processing claims through digital platforms like video or chat.
By providing these self-service options, insurers can empower customers to initiate claims or manage their policies independently, reducing the time and effort required. This not only accelerates the claims process but also boosts customer satisfaction and fosters loyalty.
See also: 5 Ways Generative AI Will Transform Claims
Moving into the era of automation
Accelerating the manual steps involved in claims is crucial for insurers to maintain efficiency and customer satisfaction overall. Modernizing legacy systems is a critical first step in achieving this goal. It's not just a technological upgrade but a strategic move toward future-proofing the business and seamlessly transitioning into the era of AI and automation.
