Automating claims management to win the digital generations

For decades, the insurance industry has focused on selling products and processing claims using outdated, monolithic systems and processes. And for decades, that approach was adequate. No longer. The future of claims management is here.

Today’s market is now saturated with more insurance products, and a more sophisticated buyer with a wide range of options. To meet these changing needs, insurers need to be nimbler, work faster, and make delivering a superior customer experience (CX) their top priority; especially as that CX pertains to the coming wave of customers; those who make up the Millennial and Gen Z generations.

Millennials and young Gen Z adults constitute the two largest generations in American history, 72 million and 69 million respectively. While both generations have historically broken away from the behaviors and norms of previous generations, both are now reaching the life milestones that will lead them to search the market for insurance products.

The traditional methods of engaging with these individuals, however, simply will not resonate with them. When shopping and purchasing products and services, these digitally savvy consumers are accustomed to the speed and convenience of an online or mobile experience. And they expect the same when it comes to purchasing a policy or settling a claim, i.e., a fast, frictionless, anytime, anywhere experience.

For leading insurers, claims process automation has been a priority for quite some time, as the costs associated with preparing, processing, paying, and adjusting claims represent the most significant share of an insurer’s operating costs. But cost is not the only concern. Traditional insurers face an onslaught of new, nimble insurtech providers who are offering the simple, seamless claims management experience that this coming generation of consumer demands.

A February 2023 survey, commissioned by Ricoh and conducted online by The Harris Poll, confirmed the necessity of insurers taking their claims management CX to the next level. The survey, conducted among 1,900 Americans with home/auto insurance, revealed that nearly 1 in 3 Americans who filed a home or auto insurance claim within the last 5 years still rate their claim filing experience as fair/poor/terrible. In addition, younger adults ages 18-44 who filed a home/auto insurance claim within the last 5 years were more likely than those ages 55+ to describe the experience as fair/poor/terrible (34% vs. 21%).

Why the poor experience rating, especially among the younger demographic? High expectations and razor thin patience, for starters. Processing claims requires capturing, extracting, classifying, validating, and sharing a tremendous volume of data. And that data often takes many forms. A claim is not, unfortunately, a single document. Instead, a single claim includes a packet of several documents (some paper-based, others digital) such as:

• Claimant’s identity and personal information

• Medical, damage, and accident reports

• First Notice of Loss (FNOL) reports

• Photographs and videos

• Witness statements and damage repair estimates

• Insurance coverages

• Government agency reports, and more

Adding to the complexity and inefficiency of the process, the needed data is often stored in numerous systems (e.g., CRMs, document management systems, claims systems, and policy administration systems). And then there’s access.

Access to data within most current, legacy claims management workflows is time-consuming, and with the manual entering and re-entering of information, is inefficient, error-prone, and sometimes costly. It’s easy to see that complex workflows, siloed data, and disparate systems continue to plague the claims process, creating costly inefficiencies and more importantly, a slow, painful customer experience that will send younger, high-expectation customers fleeing to another firm. However, AI-driven workflow automation that facilitates customer data analysis and access — combined with human expertise — can create more individualized services, while reducing tedious, time consuming, and error-prone “human-in-the-loop” tasks.

According to the Celent North American Property/Casualty 2022 CIO Pressures and Priorities survey, 59% of respondents said they were currently replacing, beginning replacement, or making significant enhancements to their core claims system. These enhancements, driven by automation technologies, are focused on the three most critical areas of customer experience as it relates to the claims management process; accuracy, speed, and efficiency.²

Automation enhancement in these areas can double the speed at which insurers process claims, reduce manual tasks by 80%, and improve their processing accuracy significantly. As a result, the customer experience is enhanced as back-office functions are performed more efficiently and with fewer errors, delays, and the kind of frustrating back-and-forth customer experience that can lead to attrition. All of which is critically important when striving to provide the customer experience that today's customers have come to expect.

In automating their workflows, insurers will benefit most from consumption-based, as-a-service solutions that deploy quickly, do not require a big upfront capital outlay, and:

• Extract and validate claims data, instantly and automatically

• Improve data accuracy and reduce costly errors

• Set up clean claims and enable straight-through processing of document intake

• Protect business continuity and enable anytime, anywhere secure access

• Unlock analytics insights and support data-driven decision-making

• Accelerate claims resolution to boost NPS, CSAT, and retention

All of which lead to significant gains in operational efficiency — and, most importantly, the fast, frictionless, omnichannel claims management process that the digital generations expect of their insurance provider.