6 MINUTE READ
The insurance industry is traditionally reliant on manual processes. In claims management for example, data entry, document verification, and claims assessment all require significant time and human effort. Adjusters manually review and input information from various documents, handle extensive paperwork, and communicate with customers and vendors through phone calls and emails, making the entire process slow and expensive.
However, the industry is starting to wake up. Automation is becoming a major trend in insurance, and advanced claims management systems (CMS) that include automation features are making the lives of adjusters easier.
The Role of Automation in Claims Processing
Automation in claims management involves leveraging if/then logic as well as advanced technologies like data modeling, automatic document processing (ADP), artificial intelligence (AI), and machine learning (ML), in handling routine tasks and manual processes with minimal human intervention. It means that tasks that can be done (automatically) by the system without human intervention are done that way.
Technology can perform a wide array of functions in claims management, significantly enhancing efficiency and accuracy. For example, technology can automatically extract and input information from various documents and systems, generate concise summaries of lengthy documents, streamline communications, and offer intelligent recommendations for next steps based on data analysis. With technology, every process is shorter and more efficient.
Benefits of Automation in Claims Processing
- Increased Efficiency and Speed: Automation can drastically reduce the time to process claims. For example, automated FNOL populations can instantly pull data from customer profiles and policy systems to fill out required fields in the CMS, eliminating the need for manual entry.
- Reduction in Human Errors: Manual data entry and processing are prone to errors that might lead to handling mistakes, inaccurate settlements, and customer dissatisfaction. Automation ensures data is accurately captured and processed, minimizing human errors. Automation also ensures consistency across systems and documents.
- Cost Savings and Improved Profitability: By automating repetitive tasks, insurers can significantly cut down on operational costs. Automation reduces the need for manual labor and enables better resource allocation by freeing up adjusters to focus on added-value tasks like decision making and customer care, enhancing productivity without increasing headcount. According to a report by McKinsey, automation can reduce claims processing costs by up to 30%.
- Improved Adjuster Morale: Automation reduces adjusters’ workload due to repetitive and tedious tasks, allowing them to focus on the rewarding aspects of their jobs that require expertise and decision-making skills. This can lead to higher job satisfaction and lower turnover.
- Enhanced Customer Satisfaction: Faster processing times and accurate settlements lead to higher customer satisfaction and loyalty. Automation sometimes enables 24/7 service availability, allowing customers to file claims and make progress with its handling anytime.
- Better Compliance: Automation reduces administrative overheads by streamlining processes such as compliance checks and reporting. Automated systems can ensure that all necessary regulatory requirements are met without the need for extensive manual oversight, reducing the costs associated with compliance management.
Key Areas Where Automation is Making an Impact
- First Notice of Loss (FNOL): The FNOL is the initial report made to an insurer to start the claims process. Automation can streamline this step by allowing policyholders to report claims via digital channels, such as mobile apps or websites, which then automatically populate the necessary information into the system. This reduces the burden on call centers and expedites the initial handling of the claim. Advanced Claims Management Systems can then automatically fetch all policyholder and policy coverage details from various systems to fill additional fields and speed up the claim handling.
- Claims Triage and Assignment: Automated systems use AI to categorize and prioritize claims based on severity and complexity. This ensures that straightforward claims are processed quickly, while complex cases are assigned to specialized adjusters.
- Document Processing and Analysis: Automation tools can handle the extraction, analysis, and storage of documents. Automation can convert different types of documents, such as scanned paper documents, PDF files, or images, into editable and searchable data. This capability is crucial for processing claims that involve extensive documentation, such as property and casualty damage claims.
- Communication and Customer Engagement: Automated communication tools enable insurers to maintain constant and consistent communication with policyholders. These tools allow adjusters to send and receive calls, video calls, texts, and emails directly within the claims management system. Such integration ensures all communications are captured, transcribed, and indexed for compliance purposes, providing a complete communication history for each claim. Additionally, automation can schedule regular updates and reminders for policyholders, improving transparency and keeping them informed throughout the claims process, which enhances overall customer satisfaction and engagement.
Five Sigma – A Leader in Claims Automation
With its “Automation-First” approach, Five Sigma is at the forefront of transforming claims processing with automation and AI. Designed by claims professionals and technology experts, Five Sigma’s AI-Native claims management platform streamlines every step of the claims process, from FNOL to settlement.
Key features include:
- Automated FNOL and data population: Reduces the time and effort required to initiate and process claims.
- Coverage & Exposures: Automated coverage verification, exposures and reserve setting.
- Automated Claims Triage and Assignment: prioritizing claims based on severity and complexity – straightforward claims are processed quickly and complex cases are assigned to specialized adjusters.
- Vendors: Automatic vendor selection, based on past claims analysis.
- Adjudication: Automated method of inspection.
- Resolution & Payment: Automated processing and payment rules.
- AI-driven insights: Provides adjusters with recommendations for next steps, enhancing decision-making and reducing errors.
- Seamless communication tools: Integrates all communication channels within the CMS, ensuring comprehensive documentation and improved customer engagement.
- Extensive integration: Easily integrates with existing insurance systems and third-party applications, ensuring automated data extraction and synchronization and smooth workflows.
Five Sigma customer testimonials, such as INSHUR and Xceedance, showcase how Five Sigma’s automated claims management platform has significantly improved operational efficiency, reduced costs, and enhanced customer satisfaction.
