Mark Colonnese, Director of Aquarium Software, offers his expert opinion on digital claims and claims automation in insurance, and how the process is being transformed with the advent of innovative technologies and big data
Using technology in claims automation is nothing new, but the advent of artificial intelligence (AI) is accelerating the process as increasing numbers recognise its value in streamlining efficiencies and delivering an enhanced customer journey. AI, in its purest sense, is about taking basic tasks such as reading an invoice or medical history and handling them without the need for human intervention. The more that mundane repetitive tasks can be automated, the faster the salient information can be extracted to the benefit of the customer. Crucially, it also allows the highly skilled claims assessors to focus in on the real value-add tasks they potentially otherwise would not have had time to investigate properly.
Claims processing data can be supplied in a multitude of formats, and where once this would have to be re-keyed in manually, AI allows such work to be completed faster and more accurately than ever, delivering greater granularity of information and reducing the risk of human error when establishing material facts. At the simpler end of the spectrum, AI centres around rules-based auto-adjudication, enabling rapid claims validation and settlement based on defined business rules.
Broad benefits for all
Insurers can reap the benefits of the significant process cost savings of AI, automating sometimes complex but narrowly defined tasks with great effectiveness. Where more complex broader discussions are required, or where a claimant is distressed because of an incident abroad, for example – thanks to the effective use of AI – operators are freed up to give the fullest practical or emotional support to their customers in their crucial moment of need and distress.
Effective use of AI is all about continuous learning, so employing such technology requires some degree of system training and machine learning. Over time, however, the more AI is involved, the more it will learn and improve – identifying fraud, and adjusting its approaches based on learned experiences.
While a positive customer journey is a vital consideration, speed of claim matters more than ever (one could argue that is a positive customer journey). AI means that valid claims can be quickly identified and paid in seconds, without the need for human intervention – delivering an efficiency of service no human alone could hope to match.
An essential element
Automation is becoming ever more essential, because as consumers switch onto the benefits, they will be making the switch to those providers who can offer the benefits these new systems can bring. We are already seeing a lot of innovation in this field in the travel insurance sector and we are only at the beginning of what will be a revolution in the way insurance products and services are delivered.
Insurers will have to offer it to stay relevant, and it also offers options for greater personalisation of product, which today’s tech-savvy customers are looking for. One size does not always fit all, and bespoke products have the potential to drive growth and profitability.
Computer says yes
One challenge that must be noted is the need to avoid falling foul of over-automation – trying to automate things that can’t or shouldn’t be automated, avoiding the ‘computer says no’ scenario and the risk of the resultant negative headlines. Besides, it’s worth remembering that in those real ‘moment of truth’ claim situations, it’s human emotional intelligence that really makes the difference where long-term customer loyalty is concerned.
More prosaically, for larger corporates, integration with legacy systems and interfacing with other business divisions and territories are just a few of the practical challenges. But none of these potential hurdles are insurmountable, as long as technology deployment is planned and resourced correctly.
The future of claims automation
Greater claims automation and fraud profiling is clearly the future. We will undoubtedly see more auto-settlement for low-value, high-volume claims in particular, but this is only the beginning.
The requirement for human staff engaged in labour intensive tasks will reduce, and with that will go the fatigue of doing the same job repetitively over and over again. This should lead to a happier workforce able to concentrate on more fulfilling and profitable work; more satisfied customers will be the natural by-product, with faster, more accurate initial assessment and more positive outcomes for all.
