Automated Claims Processing

Claims processing is probably the most important function for any insurance company. This is because this process is where the insurance company actually delivers on its commitment. The speed and convenience with which the claims are settled have a long bearing on the reputation of the insurance company.

Nowadays, most insurance companies have started automating their claims process. This decision is obvious given the numerous benefits that a company stands to reap after such automation has taken place. In this article, let’s have a closer look at these benefits.

Reduced Data Entry

Customers are required to fill in numerous forms as a part of their claims process. The information received from these forms has to be entered into a centralized system. No processing can be carried out unless this information is available in electronic format.

Before automation was extensively implemented in the claims industry, entering this data into the system was a manual, time-consuming as well as expensive process. However, modern technology has made it possible for software to directly read the information from forms and input it into the system. Hence, the conversion of data from paper forms to electronic entries can be accomplished with very little manual intervention.

Since data processing is one of the biggest costs which is incurred by any insurance company, reduced data entry goes a long way in saving costs.

Completeness of Application

The lack of complete data is a major hindrance to fast processing of insurance claims. The reality is that in order to claim insurance, different types of documents need to be submitted. The list of these documents varies on a case to case basis. Hence, it is not possible to give a simple checklist which can be verified.

Since the requirements are complex, most insurance consumers miss out on providing certain information in the first go. As a result, their application is sent back, and they are asked to submit more documents. The process usually goes back and forth a couple of times before the claim is actually processed.

The iterative nature of this process is a problem for both the insurance companies as well as the consumers. This is because the consumers have to wait longer before they can get the money which is owed to them. From an insurance company’s point of view, the continuous back and forth means the efficiency of the back office, as well as front office staff, is compromised leading to higher costs.

Eliminates Need For Storage

As already mentioned in the first two points, the claims process involves a lot of paperwork. Insurance companies are supposed to hold on to this paperwork for further reference. This becomes a problem since it is very difficult to maintain a physical archive.

With increasing automation in the claims processing industry, physical archives have now become obsolete. They are now being replaced by electronic archives. Electronic archives are easier to maintain. This is because the process of archiving as well as retrieving documents can be automated. This means that considerably less manpower and money needs to be spent on maintaining the archive. Also, since electronic archive does not occupy much space in the real world, the real estate costs are also saved.

Audit Trail

The best part about automating the claims process is that the audit becomes extremely easy. If any insurance executive has accessed a particular claim file or has performed any action related to the claim, their information is automatically recorded by the system. The software, therefore, creates a trail which can be easily checked while conducting audits. This feature is extremely valuable to insurance companies who have lost a lot of money in the past due to the connivance of their support staff with outsiders.

Visibility to the Consumer

From the consumer’s point of view, the entire claims process is a black box. This means that the consumer doesn’t know what is happening to their claim until they receive the money. This creates a feeling of ambiguity and uncertainty. Consumers do not mind waiting for some more time as long as they are in the loop regarding what is happening with regards to their claims.

New and advanced automated claims processing software makes it possible to provide this information to customers in a timely manner. Customers are often provided with a flowchart to explain the various stages that their claim will have to go through. A dashboard provides real-time to updates to customers whenever they log in to the system. Hence, automated claims processing software not only reduces costs by also enhances customer experience.

Identification of Fraudulent Claims

Automated claims processing software also has the ability to detect patterns in data. Hence, whenever auditors detect a fraudulent claim, they are supposed to flag it to the system. Over the course of time, the software has its own database of fraudulent claims. The system can then run analytical operations on this data in order to identify patterns which were common amongst those fraudulent claims. This data can then be used by the software to flag new claim applications which follow the same pattern and therefore may be fraudulent. Most claim processing software have the capability to continuously learn as more and more data points are added to their database over an extended period of time.

To sum it up, automating the claims settlement process has become a norm in the software industry. Companies that do not automate this process in the next few years may not survive since their administrative costs will be much more as compared to their competitors.