New Lightico Survey Reveals Critical Digital Gaps in Workers’ Comp
By Leor Melamedov
Like all insurance companies, workers’ compensation providers would like to believe they are meeting their customers’ growing digital needs. To help workers’ compensation insurers better understand how they fare in terms of providing efficient and streamlined services, in July 2020 Lightico surveyed 400 insurance professionals in the workers’ compensation industry.
We found that while many insurers have made significant digital strides, paperwork continues to choke providers, and managing claims and policies remains cumbersome. As the coronavirus rages on, the need for remote insurance processes is no longer an optional nice-to-have, but a necessity to ensure continued operations today, and continued relevance tomorrow.
In this blog, we’ll explore some of the key trends affecting workers’ compensation — and the obstacles to digitization that remain to be solved.
Most Insurers Are Actively Looking to Digitize, Especially Amid Coronavirus
Regardless of their current level of digitization, the vast majority of workers’ compensation providers are committed to digitizing more fully. 75% of the insurers we surveyed are either “urgently looking” or “actively looking” to digitize. A mere 5% said they are “not interested” in digitizing at all.
Closing the digitization gap has always meant saving time and reducing costs. But now, there is an added imperative to digitize: the coronavirus. Concerns about virus transmission turned face-to-face meetings, mailing reports at the post office, and other non-digital processes into a liability.
But something positive and lasting came out of this forced change. The subsequent worldwide shift towards remote communication during the pandemic meant that insurance agents, employers, and employees all had a chance to become more comfortable with digital processes. And many of the processes and behaviors developed during the coronavirus came to be widely seen as more convenient and in many cases preferable, regardless of the virus threat.
Despite High Interest in Digitization, More Progress is Needed
Workers’ compensation providers are increasingly embracing digitization, but several digital areas require additional investment. Carriers are still lagging when it comes to transparency, automation, and digitizing reports, signatures, and other paperwork — and it’s holding them back from thriving in the “new normal.”
Insufficient Transparency Hurts CX and Burdens Call Centers
The survey results show that transparency will need to be improved to meet customer expectations and avoid call center inefficiencies.
56% of carriers fail to keep their customers informed regularly throughout the entire process via seamless digital communication tools such as push messages or real-time claim information. Employers and employees are left in the dark for excessive periods of time about the status of their claim. There can be serious consequences to this: without clarity surrounding when a payout will come and how much they are entitled to, injured employees may delay critical treatment.
In this reality, call centers can be expected to be bombarded with streams of calls from confused and concerned employers — all of which could have been avoided through automatic updates sent to the relevant parties.
Paperwork Delays Time to Settlement
While at least partially digital processes are becoming more common, workers’ compensation insurance remains heavily burdened by paperwork processes. The workers’ compensation professionals we surveyed rank paperwork in general (82%), signatures (82%), and document collection (78%) as particularly burdensome aspects of their jobs.
This is especially problematic due to the multiple parties and forms that are inherent to the workers’ compensation process. With so many moving parts, maintaining outdated paperwork processes incurs substantial time and financial costs.
In addition, paperwork reporting has proven to be financially costly. Studies show the average cost to rework a claim is $25.
Yet despite the obvious burden that paperwork imposes on insurance companies, only 36% of the workers’ compensation professionals we surveyed said they were “fully digital.” In light of digital trends accelerated by the coronavirus, being partially digital isn’t enough. For example, insurance providers may enable employers to download forms from a website, but if they ultimately need to be printed, filled out by hand, and scanned, this adds unacceptable friction into the process.
A Digital Way Forward
Workers’ compensation carriers are more motivated than ever to go fully digital, especially in light of growing customer expectations and remote trends accelerated by the coronavirus. Yet partially digital half-measures aren’t enough to ensure streamlined remote interactions, efficient use of agents’ time, and rapid time to settlement.
To truly transform the entire workers’ compensation cycle, carriers will be served well by completely digitizing forms that injured employees can fill out in real-time. Mistakes will be less costly, as the injured party can simply re-enter the digital environment and instantly correct information. No other channels such as printers, scanners, or mail are required.
The good news is that today’s insurance carriers can leverage end-to-end customer-facing digital solutions that are built for scale, both in terms of pricing and functionality. In addition, such solutions are often easier to implement than many insurers anticipate, and sync with existing IT systems.
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