Source: Andy Yohn

Digital transformation can effectively touch all insurance functions.

Switching to digital claims management will not only improve customer-facing operations but can also benefit insurers internally.

Proactive, efficient claims management is arguably the most critical component of an insurer’s ability to protect their customers and themselves. To be successful in this element of operations, many carriers are utilizing new claims technology and moving to digital claims processing.

But how? As part of the ongoing digital transformation of the insurance industry, many have implemented digital or automated solutions that touch all areas of insurance functions. To separate themselves from their competitors and elevate the customer experience, insurers must integrate these technologies — including digital claims — into their operations to keep pace.

Why switch to digital claims

Switching to digital claims management will not only improve customer-facing operations but can also benefit insurers internally. A few of the top reasons why insurers should switch to digital claims include:

  • Increased claims efficiency: Today’s claims technology makes it possible to streamline traditionally disjointed claims management practices, which can result in drastically faster processing and reduced claims cycle times. With dynamically guided workflows and automation, claims are processed in a fraction of the time. By freeing up agents, insurers can empower their claims employees to focus on delivering optimal customer service and positive outcomes.
  • Improved customer experiences: With digital claims, insurers can improve customer service while lowering expenses with automated tools. These automated processes can manage the investigation to the point of loss and reduce claim cycle times, thereby getting customers their settlements faster and giving them a better overall experience. The technology that makes digital claims possible is part of a comprehensive digital insurance ecosystem that can deliver personalized, transparent, and effective communications with policyholders wherever and however they want. According to Bain and Co., 61% of policyholders will switch insurers to find better ecosystem services.
  • Modernized operations and faster innovation: According to a PwC report, 67% of insurance CEOs see innovation as very important to their organizations. The speed with which insurers can innovate and introduce new products to market is a major component of success. With claims technologies, insurers can modernize many facets of their operations, which causes a domino effect where other insurance functions — including product development — can also be improved.

How to leverage big data & AI for digital claims

With seemingly endless options when it comes to mobile technologies, artificial intelligence (AI), and machine learning capabilities, insurers can unlock significant value by employing a new, modern claims processing workflow.

First, AI can tackle many facets of claims processing and is a major reason why many steps in the process can be automated. Secondly, the volume of data generated during the claims process (which is captured and analyzed by AI) can unlock new insights and inform nearly every facet of insurance operations.

Some of the primary ways insurers can utilize AI and big data in the digital claims process include:

  • Damage assessment: Insurers and customers can communicate about and work through the initial stages of the claims process using AI technology. Using just a mobile app, customers can take photos and videos of the damage, which is then processed by AI technology in a mobile application.
  • Customer interaction: Chatbots are now playing a vital role during the initial reporting of a claim. This allows customers to report incidents anytime, anywhere and can begin the process much faster than before. There is also great potential to use chatbots throughout the claim process to improve communications and cycle times.
  • Fraud detection/management: AI and machine learning provide much-needed new capabilities for the early identification of potential fraud, as well as new tools for fraud investigators. With real-time data and other new data processing, AI can detect fraudulent behavior and alert insurers before any money is lost.

Having claims information digitally available and orchestrated by a modern claims system can benefit insurers in several ways. With digital claims, carriers can achieve faster claims processing, implement advanced analytics and acquire loyal customers.

Digital claims can be a one-off solution, or they can be part of a larger insurance digital transformation. Depending on your organization’s needs and future goals, look for products that work as part of a larger digital ecosystem that can be scaled up and modernized easily. Cloud-based insurance technology is ideal for these capabilities, as they are essentially evergreen solutions that will continue to evolve as technology and the industry grow and develop.