Insurance firms have a limited number of levers to get loss ratios and combined ratios in a good place. The first is, of course, cost reduction, and lowering the cost of processing claims is a major part of that.
Therefore, it should come as no surprise that insurance companies are interested in using technology, such as artificial intelligence, to increase their efficiency in processing claims. That is something that insurance clients frequently tell us at Indico. According to our observations, a prevalent issue is that the claims expense ratio has been rising generally, which naturally affects the combined ratio of an insurer.
It’s a significant issue since, after a policy is formed, controlling claims expenses becomes one of the main strategies to keep expenses down. However, a number of insurance claims processing tasks are well suited for automation through the use of different AI technologies. One such task is intelligent intake, which entails automating the initial receipt of different claims documents.
The following list of five ways AI can assist chief claims officers in achieving their claims processing objectives is based on our discussions with chief claims officers.
- Quicker resolution of insurance claims. An insurance company’s processing costs are expected to increase with the length of time it keeps a claim open, which will raise the loss and combined ratios. This includes the possibility of litigation, which rises the longer a claim is pending resolution, in addition to the different touches that are likely to happen, each of which drives up expenses. Naturally, litigation can significantly increase claims expense ratios. Therefore, you can handle the claim more quickly if you can use technologies like intelligent intake to gather in all the data you need.
- The processing of claims involves less physical labor. In order to lower loss ratios, insurance companies have been concentrating hard over the past year or two on minimizing the amount of manual labor required for claims processing. For instance, in the past, insurance companies have frequently used armies of people in other countries to transcribe call center calls in order to ensure quality. Now AI can perform the same job, with better quality.
Reducing manual labor in the claims submission process is another priority for chief claims officers. Perhaps it’s the capability of asking claimants to send in pictures of their damage, after which an AI-powered intelligent intake system evaluates the damage and generates a series of questions for the claimant.
Although a human will probably still be needed for larger claims, such as those involving commercial insurance policies, those preliminary procedures can greatly cut down on the time and manual labor needed to decide a claim.
- Submissions of more thorough assertions. A carrier’s chances of processing a claim more quickly and accurately increase with the amount of information they have about it. With intelligent intake systems, insurers may collect as much information as they want from claims documents instead of having someone condense them and give a few bits of information they believe adjusters need.
More information might help you make a more informed decision about a claim, especially when it comes to business interruption claims. It results in a more accurate and equitable evaluation of claim exposure and the amount that a carrier must pay. Loss and combined ratios are subsequently impacted by that.
Additionally, collecting more information minimizes the number of actions you need to request from a claims adjuster, especially when it comes to commercial insurance claims.
- Detecting insurance fraud with AI. Finding false claims is a surefire method of lowering insurance loss rates. Insurance fraud can be detected with the aid of a variety of AI technologies. In order to absorb, process, and comprehend material, intelligent intake is the first step. In order to detect fraud, you can then compare it to another data set, most likely from a third party.
Say within a relatively short time span a carrier receives multiple claims for damage to a small number of cars within a given company’s fleet of leased vehicles. AI can help companies uncover such potential indications of fraud that may be difficult for humans to ferret out. Using AI to identify fraud in this fashion helps reduce loss ratios by flagging claims that should be denied.
- Improve the customer experience and NPS. In the end, it’s clear these steps have a double benefit: on top of reducing costs, they also help companies get claims processed faster, which makes customers happy and improves a carrier’s net promoter score (NPS). Done correctly, use of AI technologies can streamline processes, reduce instances of carriers asking customers to submit the same documents multiple times, and boost the company’s reputation.