Digital Workflows for Automating Insurance Claims: Use Cases

Leor Melamedov

Far too often, P&C insurance companies’ most mission-critical processes are inefficient and cumbersome to execute. Nowhere is that more evident than during claims processes, where despite the urgency of settling, most insurance companies falter in getting to completion quickly.

These companies tend to use a combination of manual methods and digital tools that demand coding from the IT department, customized integrations, or even fail to integrate smoothly with existing systems. Such disjointed processes make it difficult for insurance companies to adjust, reconfigure, and update business rules as policyholder and compliance requirements change.

Automated digital workflows are designed to eliminate these siloes, and make it easier for claims adjusters to get customers through the filing process and to a final settlement. The best-automated workflows have low or no coding requirements, enabling insurance carriers to make changes on the fly.

Here, we’ll explore why point solutions are not enough, the advantages of claims automation for insurance, and potential use cases to streamline insurance claims.

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The Limitations of Traditional Claims Automation Insurance Software

Many insurance companies already have digital tools in place for business process management. Yet these tools often only cover certain aspects of workflows rather than end-to-end processes.

For example, robotic process automation (RPA) is growing in popularity thanks to its ability to improve the efficiency of specific tasks, such as inputting the First Notice of Loss (FNOL), automatically notifying loss adjusters, and distributing assignments to claims handlers.

The problem here is that silos remain, and processes are not integrated. As a result, it’s common to see things like customers being able to fill out some forms electronically, but the forms don’t remember information that was supplied at another stage of the process. Claims adjusters waste time chasing brokers for more information that wasn’t submitted (or was submitted incorrectly) during the FNOL.

Adopting digital tools as point solutions isn’t optimal, as it leads to choppy digital journeys. For example, customers may be able to submit their FNOL electronically, but then receive email and phone calls requesting supporting documents. The system simply isn’t smart enough to adapt FNOL processes to the unique characteristics of the policyholder.

When systems don’t communicate automatically with each other, when customers are forced to redo forms or get unexpected requests for additional documents, when digital tools are tacked onto otherwise non-digital processes, several insurance KPIs are negatively impacted including:

  • Turnaround time: Agents spend an excessive amount of time chasing customers for documents and signatures due to disjointed processes. All stakeholders, from customers to brokers to adjusters, spend disproportionate amounts of time following up.
  • NPS: Net Promoter Score, a measurement of customer satisfaction, suffers due to lengthy, confusing, and manual processes. According to Accenture’s research, claims that took more than 20 days to be resolved had the highest negative claims experience ratings. This jeopardizes post-claims retention.
  • Compliance: Insurance is a highly regulated industry. Without the ability to quickly updated process workflows and document requirements to changing regulatory needs, insurers put themselves at risk of noncompliance.
  • Cost of claim: The operational and processing costs of traditional insurance processes can really add up, from chasing customers for supporting documents, to fixing NIGO forms, to manual data entry. Claims costs represent almost 80% of a policyholder’s premium. The longer it takes to settle a claim, the higher the claim costs, hurting the insurer’s profitability.

Benefits of Automating Insurance Claims With Digital Workflows

The P&C insurance industry has multiple stakeholders, involves complex calculations, and is beholden to complex regulatory demands. This calls for more intelligent automation of the entire insurance claims lifecycle.

Based on the type of claim and the policies held, the automated digital workflow triggers requests for required documents, eSignatures, and approval. It ensures that all required evidence for additional living expenses (ALE) and repairs are collected according to the conditions of the policy.

Why Automate Insurance Workflows?

Automating insurance workflows makes it easy for insurers to is essential for the most accurate yet efficient claims processing.

On the one hand, frequently changing KYC requirements mean that managers need to keep their processes up-to-date. Failure to do so can result in fraud, hefty penalties from regulators, and reputational damage.

On the other hand, insurers cannot afford to be dependent on IT departments every time they need to make changes to their processes. Such dependency leads to widespread inefficiency, employee fatigue, and customer frustration.

Adopting a digital workflow automation solution can allow insurers to build processes that reflect compliance and business requirements –– without a manual or IT dependency.

The ROI of Automating Insurance Claims

  • Simplified processes: A single system controls the entire end-to-end process with a simple drag-and-drop interface.
  • Digital tools in one digital suite: At various stages of the workflow, rules trigger the sending of requests for eSignatures, eForms, document collection, and ID verification.
  • More streamlined processes: Easy and intuitive conditional rules can be set to ensure business logic between steps, within steps, and within form fields.
  • Optimized: Each customer interaction can be optimized across touchpoints and existing systems.
  • More visibility: Digital workflows come with dashboards that allow business leaders to gain visibility into the KPIs that matter most, such as cycle time, loss costs and NPS.
  • Zero IT involvement: Project managers can adjust their business rules according to their needs without requiring IT support or coding.

Top Use Cases For Claims Automation in Insurance

Automated digital workflows ensure insurers’ processes reflect the latest compliance and business requirements. At each stage of the insurance claims process, requests for customer information or action are automated according to the specifics of their case and policy.

The top use case for digital workflows can be found during the following stages of the insurance claims process:

1. First Notice of Loss (FNOL)

Before: Customers, already stressed out due to the incident, scramble to figure out what’s required for their FNOL. Brokers are not always fully informed, either, resulting in them having to chase customers for additional evidence.

After: Brokers are automatically informed of exactly what they need to collect from the customers, eliminating ambiguity and later follow-up.

Customers should be able to quickly and digitally submit all the required information during the FNOL process in one shot. Automated processes make it easy for the insurance broker to request the appropriate supporting documents, such as photo or video evidence.

In the FNOL form, conditional fields adjust to the customer’s information, such as risk category or claim type.

Examples of conditional logic in FNOL processes include:

If/then – type of claim
If then – status and type of policyholder
If then – generate documents and terms
if/then – request further customer information
if/then – ask for signatures
if/then – modify customer record

2. Claim Investigation

Before: Back-and-forths between the claims adjuster, broker, and customer are common, resulting in frustration and misunderstanding. The claims adjuster must gather missing information, prolonging the process.

After: All evidence and documents are instantly and digitally sent from the broker to the claims adjuster. Missing information is unlikely, as the broker had complete clarity regarding requirements.

Since the FNOL is handled in a standardized and automated way, the claim investigation is significantly expedited. The broker hands off the case to the claims adjuster, who has everything he or she needs to determine the amount of loss and damages covered.

3. Damage Evaluation and Repairs

Before: The insurance adjuster spends time fielding customer questions about the next steps and repair personnel.

After: After each step in this stage is completed (e.g., appraising, contracting, repairs), the insurance adjuster automatically and digitally informs the customer of what’s next.

Given that each claim is unique, some stages but not others may be needed. Some may require a different level of appraisal or multiple types of repairs from different repairmen. When each step is completed, the system instantly informs the customer of the next required action.

4. Payment

Before: Customers are uncertain when they will receive payment, leading them to call the insurance company — sometimes repeatedly.

After: Customers are automatically informed about the settlement of the claim and the payout, as well as the estimated timeline.

It’s stressful for customers to have to constantly check on when they can receive their payment. With automated digital workflows, customers gain visibility into the process, and payments are instantly deployed the moment they are ready.

Digital Workflows for Automating Insurance Claims

Automated digital workflows allow insurance companies to dynamically build and adjust processes to meet their current needs. This flexibility means that customer interactions with the insurer are more targeted. Customers provide only the information that is needed from them, no more and no less. Automated workflows ensure insurers keep the ball rolling between critical steps in the claim cycle, bringing both better compliance and efficiency.

Lightico offers such a workflow automation solution that uses conditional logic to streamline end-to-end insurance claims cycles. The platform includes eSignatures, smart eForms, digital document collection, and instant ID verification. Learn more at Lightico.com.

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