Is smarter safer? the digital future of claims

At a Glance

Digital transformation makes insurance claims-handling better and safer, writes Atos’ Magnus Schoeman. New computer vision capabilities, together with automation and AI, enable faster, more accurate and less costly outcomes for insures and claimants while helping protect them against fraud.

4 Minute Read

Magnus Schoeman

Global Client Executive Partner, Atos

Digital technologies are helping to disrupt every part of the insurance value chain. From the intelligent automation producing initial quotes, through to the virtual agents transforming distribution, the business of insurance is changing fast.

At its heart are the customers who pay for their insurance policies and need help when the worst happens. When they initiate a claim, people’s lives can be devastated; and the teams working at claims service centers and in the field want to help and do whatever’s necessary to complete the claim.

Making claims handling easier and faster

Virtual adjusting tools help insurers to increase profit ratios, shorten cycle times, improve customer satisfaction ratings, and forge new business models. They can also benefit companies’ financial reserves; because if you can’t cover existing claims, you can’t write new business.

It’s therefore in customers’ and insurers’ best interests to optimize every part of a claim settlement using digital tools and data. Digital communications are quick and easy; claimants, adjusters and providers can make video-calls on social media platforms, and upload and share images.

More digitally mature solutions can deliver virtual claims handling, with natural language processing to process handwritten or printed claims and generate claims analytics. Artificial intelligence (AI) can scan images and provide a more precise and holistic analysis of the extent and type of damage; for instance, blue-sky aerial imagery (rooftops, vehicles, pools, gardens and so on) can be compared with grey-sky imagery of the same landscapes and buildings to assess storm damage.

New computer vision capabilities – combining video with AI – give adjusters and third-parties real-time and predictive intelligence. The ability to more accurately and comprehensively assess loss enables faster and better claims expedition. At every stage of claims, these capabilities also help to prevent and pre-empt error, fraud or crime.

Digital transformation of the claims process

Let’s look in more detail at how digital technologies can transform the five stages of claims handling.

1 First Notification Of Loss/claim entry. Online portals and apps offer easy ways to upload multimedia. Photos and videos extend adjudicators’ ability to assess damage in situ; images may be relevant to more than one insurance department (home versus car insurance policies).

2 Adjuster/assignment. Different types of losses can be processed, usually taking a rules-based approach to assign each claim to the right adjuster according to criteria (for example type of vehicle, type of damage). Depending on the insurer, the claim may be sent to a preferred service provider, independent adjuster or specialist. Data-driven decisions and triaging help expedite processes while finding providers that offer the best value in order to keep expense ratios (and ultimately the cost of policies) down. Virtual handling for claims below set thresholds (and with customer opt-ins) increase speed and efficiency, for example to assign repair shops or approve customer preferences.

3 Documentation. To cost out the damage, everything can be done on a smartphone. Adjusters can see relevant documentation, including historic claims and police reports, in one place. Given the sensitivity of much of this information, security is paramount, including data encryption, tokenization and anonymization

4 Investigation/analysis. At this stage, suppliers and providers are now connected into the process. Claims can be fast-tracked to third parties, with automated sending/receiving and monitoring of digital information. Virtual handling, enabled by AI or rules-based tools, enables estimate generation and billing from photos or videos.

5 Decision/payout. While arguably the most straightforward part of the process, this often matters most to customers and impacts customer satisfaction stores. Rules-based systems can automate payment in certain cases (for example, DRP (defects rectification period) or low-value claims). Depending on geography, there is some use of direct payments online and some carriers have started to use digital payments networks, such as Zelle in the US.

What to expect in the future

Looking to the future, straight-through processing and settlement will increasingly be the norm as blockchain and distributed ledger capabilities expand and the insurance ecosystem digitally matures.

Today, InsureTechs are penetrating the market and creating software as solutions. Many incumbents require more bespoke models, together with data science and integration skills to develop the best proprietary solution with no licensing costs. A level of integration in terms of systems and workflows is required to fast-track claims, where possible, to the most appropriate option.

Ultimately, taking care of customers during claims settlement is an insurance company’s core purpose. Harnessing hyperconnectivity and digital tools can truly transform the ability of insurers and their partners to make claimants whole at what can be a very stressful and worrying time.