The insurance industry has seen significant advancements in technology over the years, transforming the way claims are handled and processed. One of the latest innovations that has gained increasing attention is touchless claims processing.
With the use of artificial intelligence, machine learning, and other advanced technologies, this approach aims to streamline and automate the entire claims process, eliminating the need for physical touch and human involvement.
Capgemini reports that by the year 2030, traditional claims processing is expected to reduce from 80% present to 30–40%, and no-touch or touchless claims processing is expected to increase from 0% present to at least 20%. As we head towards 2024 and beyond, insurers must embrace touchless claims processing to stay competitive in the market and meet the changing needs and expectations of customers.
In this blog, we will explore the reasons why insurers should adopt this method and its potential impact on the industry.
What is Touchless Claims Processing?
Touchless claims processing refers to the automation of the entire claims process using advanced technologies such as artificial intelligence (AI), machine learning (ML), and data analytics. The goal is to minimise human intervention, streamline traditional insurance processes, and expedite claims settlements. From the initial submission of a claims to the final settlement, touchless claims processing leverages technology to enhance efficiency and accuracy.
Benefits of Touchless Claims Processing for Insurers
- Faster Claims Settlements
In the traditional claims processing model, the evaluation and settlement of claims often involve a multitude of manual tasks, from data entry to document verification. Touchless claims processing revolutionises this by automating routine tasks.
Through the use of artificial intelligence and machine learning, insurers can accelerate the assessment and settlement of claims, significantly reducing the time it takes to process each case.
It not only meets the growing expectations of policyholders for quick resolutions but also enhances the overall efficiency of the insurance workflow. The agility gained through faster claims settlements contributes to improved customer satisfaction and sets insurers apart in a competitive market.
- Reduced Operational Costs
Automation in touchless claims processing translates into tangible cost savings for insurers. By eliminating the need for extensive manual labour, insurers can redirect resources towards more strategic and value-added activities. The reduction in operational costs enhances the overall profitability of insurance companies.
Tasks that once required a substantial workforce, such as data entry and repetitive administrative processes, can now be handled more efficiently through automation. It allows insurers to optimise their workforce, focusing on roles that require human expertise and creativity, ultimately creating a more streamlined and cost-effective operation.
- Enhanced Accuracy and Consistency
Touchless claims processing mitigates the risk of human error by leveraging automation to ensure a higher level of accuracy. Algorithms and automated systems are designed to process vast amounts of data without succumbing to fatigue or oversight. The result is a claims processing system that consistently makes accurate decisions.
It leads to fair and reliable outcomes for policyholders and establishes trust in the insurance process. The enhanced accuracy and consistency contribute to a more robust and dependable claims processing system, reducing the likelihood of disputes and increasing the overall integrity of the insurance operation.
- Improved Fraud Detection
Insurance fraud is a significant challenge that insurers face, leading to financial losses and increased premiums for policyholders. Touchless claims processing employs advanced analytics and AI algorithms to detect patterns indicative of fraudulent claims.
By analysing vast datasets, these systems can identify anomalies and red flags that may not be immediately apparent to human assessors. This proactive approach to fraud detection enables insurers to identify and mitigate potential risks before they escalate. The result is a more secure and resilient insurance ecosystem that protects both the financial interests of insurers and the premiums of honest policyholders.
- Enhanced Customer Experience
Quick and hassle-free claims settlements are at the heart of an enhanced customer experience. Touchless claims processing, by its efficiency, contributes to a positive experience for policyholders. The reduced waiting times and streamlined processes result in a more straightforward and user-friendly claims journey.
This positive interaction fosters customer loyalty, encouraging policyholders to remain with the insurer for their future needs. Additionally, satisfied customers are more likely to share their positive experiences through word-of-mouth, contributing to the long-term success and reputation of insurers in the market.
Why Should Insurers Embrace Touchless Claims Processing in 2024?
Touchless claims processing is the future and embracing it has only benefits to offer, so to make it more compelling here are the reasons why insurers should embrace this in 2024:
- Competitive Advantage
With growing competition in the insurance industry, gaining a competitive edge is essential for long-term success. Insurers that embrace touchless claims processing inherently gain a significant advantage. By offering faster, more efficient, and reliable services, these insurers stand out in a crowded market.
The streamlined claims processing attracts new customers and creates loyalty among existing policyholders. In a world where customer satisfaction is paramount, the ability to provide swift and hassle-free claims settlements becomes a powerful differentiator, positioning insurers as leaders in the industry.
- Adaptation to Changing Customer Expectations
The expectations of modern consumers are growing rapidly, driven by a need for instant satisfaction and easy digital experiences. Touchless claims processing aligns perfectly with these changing dynamics. In an era where customers value quick and hassle-free services, the adoption of automated processes for claims settlements meets the evolving demands of policyholders.
By providing a responsive and efficient claims experience, insurers exceed customer expectations. This alignment with customer preferences enhances customer satisfaction, builds trust, and ensures insurers remain relevant in a market where meeting and exceeding expectations are crucial to retaining and attracting customers.
- Risk Mitigation and Cost Efficiency
Automated processes in touchless claims processing play a pivotal role in mitigating risks and improving cost efficiency for insurers. The reduction of manual intervention minimises the risk of errors in claims assessments, ensuring a higher level of accuracy. Moreover, the integration of advanced analytics and AI algorithms enhances fraud detection capabilities, protecting insurers from financial losses associated with fraudulent claims.
Beyond risk mitigation, the operational efficiency gained through touchless claims processing leads to substantial cost savings over time. By automating routine tasks, insurers can optimise their workforce, redirecting resources towards strategic activities and ultimately increasing overall profitability.
- Future-Proofing Operations
Embracing touchless claims processing is a strategic move to stay ahead of trends and prepare for future advancements in the industry.
By adopting cutting-edge technologies, insurers position themselves as innovators and pioneers in their respective fields. Future-proofing operations through touchless claims processing is an investment in long-term success, ensuring that insurers can adapt to and leverage the advancements.
How to Enable Touchless Claims Processing
Enabling touchless claims processing should be on the priority list of the insurers and they should consider the following to practically enable it:
- Data Integration
Centralising and integrating data sources is the foundation of effective touchless claims processing. By creating a comprehensive view of customer information, policy details, and historical claims data, insurers can make more informed and data-driven decisions. This consolidation enables a complete understanding of each claims, facilitating quicker and more accurate assessments.
With all relevant information accessible from a centralised repository, insurers can streamline the claims process, reduce redundancy, and provide a more personalised experience for policyholders. The integrated data approach not only enhances operational efficiency but also contributes to improved customer satisfaction through quicker and more precise resolutions.
- Implement Advanced Analytics
The implementation of advanced analytics tools and machine learning algorithms is a pivotal step in transitioning to touchless claims processing. These sophisticated technologies analyse claims data to identify patterns, trends, and anomalies. By using predictive analytics, insurers can automate decision-making processes, making real-time assessments and expediting the settlement of straightforward claims.
Furthermore, advanced analytics play a crucial role in fraud detection. Machine learning algorithms can recognise irregular patterns and potential red flags, significantly enhancing the insurer’s ability to identify and mitigate fraudulent activities. This proactive approach protects the insurer’s financial interests and encourages trust among policyholders.
- Use Robotic Process Automation (RPA)
Robotic Process Automation (RPA) is a major component in automating routine, rule-based tasks within the claims processing workflow. Tasks such as data entry, document verification, and other repetitive processes can be executed with precision and speed by RPA systems.
It reduces the likelihood of human error and ensures a faster and more accurate claims-processing workflow. By deploying RPA for these routine tasks, insurers can free up human resources to focus on more complex and value-added activities, contributing to overall operational efficiency and cost savings.
- Integrate With Digital Platforms
Embracing digital platforms is crucial for creating a seamless and interconnected ecosystem for touchless claims processing. Insurers should leverage mobile apps and online portals to facilitate communication between insurers, customers, and other stakeholders. These platforms enable policyholders to submit claims digitally, upload necessary documents, and track the status of their claims in real-time.
The integration of digital platforms not only streamlines the claims submission process but also enhances the overall customer experience. Insurers can provide a user-friendly interface, improving accessibility and transparency throughout the claims journey.
- Continuous Monitoring and Optimisation
The journey towards touchless claims processing doesn’t end with implementation; it requires continuous monitoring and optimisation. Regularly assessing the performance of touchless claims processing systems allows insurers to identify areas for improvement. Feedback from users, stakeholders, and emerging technologies should inform refinements to ensure the system remains effective and adaptable to evolving challenges.
Continuous optimisation enhances the efficiency of the touchless claims processing system and positions insurers to stay ahead of technological advancements, providing a future-proof solution for claims management.
Final thoughts,
Touchless claims processing is a strategic move for insurers in 2024 and beyond. The benefits of faster settlements, reduced costs, and enhanced customer satisfaction make it a compelling proposition. By practically implementing advanced technologies and embracing this paradigm shift, insurers can future-proof their operations and provide a seamless experience for their policyholders in 2024 and beyond.