Earlier this month, the CEO of a leading global insurer said that the impact of inflation on the company’s underwriting margins is now on the decline. However, inflation remains a threat. The soaring cost of motor claims led to the insurer missing analyst expectations in its full-year results.
It is not the only insurer to be affected by inflated motor costs. In January, the CEO of a UK-based motor insurer resigned after repeated profit warnings that were triggered by the escalating cost of claims. Another insurer attributed an underwriting loss to inflation and weather-related accidents, which lead to more motor insurance claims. A US-based insurer reported a net loss of $310 million in the fourth quarter last year as a result of increased claims costs, even though it had increased motor insurance prices.
Motor insurance is just one area where inflation is rampant. Insurers operating in many categories, from home to health to motor and more, are facing higher costs. Russia’s invasion of Ukraine and Covid-related lockdowns in China have led to supply chain issues and increased inflationary pressures. Extreme weather, rising wages, higher legal and medical costs have further pushed up insurers’ costs.
It comes as no surprise that inflation is an “immediate focus for insurers, with 79% of global respondents anticipating it to be a concern in the next year,” according to a recent Goldman Sachs Insurance Asset Management survey.
Efficiency is key
In this climate, insurers need to operate at maximum efficiency. Intelligent claims automation technology like ours is a clear way to do this. Automation can reduce the cost of a claims journey by as much as 30%, according to McKinsey.
We enable insurers to reduce the average time it takes to settle a claim from 30 days to less than 24 hours, while boosting accuracy. In many cases, we enable instant settlement. As a result, claims handlers can process more claims and have more time to focus on serving their customers with empathy, speed, and transparency.
Not all insurance lines are the same. However, by adapting certain features and data sources, we have developed a solution that’s configurable and inflation-beating for every insurance line, from health and life insurance to motor and property. Our technology is designed to extract all necessary information from all types of claim documents, from handwritten doctor’s notes to call transcripts and prescriptions. To ensure accuracy, external data points such as treatment codes, provider network policies, or medication information are used to validate the claim, which is then cross-checked against policy documents. Our deep learning AI algorithms then predict the best next step for the claim and provide clear justifications. Limits, excesses, inclusions, and exclusions are automatically calculated.
Sprout.ai leads to
With automated claims processing, handlers spend less time on each claim. Despite this, insurers can be sure that the claim data has been processed with high levels of accuracy, and without bias. These savings give insurers a competitive edge. They can be passed on to customers, used to beat inflation, or boost profits.
Average human accuracy levels in claims processing hover at around 80%. Our technology has an accuracy rate of over 98%. This helps reduce operational costs, minimise waste, and lowers the risk of human error-related losses. As a result, fewer claims need to be reopened. Disputes are reduced.
Increased customer satisfaction and retention
Our ability to process claims faster and with greater accuracy translates into higher customer satisfaction. We take pride in our role in improving insurers’ Transactional Net Promoter Scores and client retention rates. We handle the collection and processing of claims information, policy term reviews, payment oversight, and customer information updates. Claims handlers are free to focus on providing excellent customer service.
Our patented technology enables insurers to extract data that can be leveraged to enrich and enhance decision-making processes, resulting in greater efficiency.
Case Study: How Zurich UK boosts efficiency with Sprout.ai
We partnered with Zurich UK, integrating our cutting edge, data-led technology into their existing systems and processes to enable end-to-end property claims automation. Download the full report.
Zurich UK can settle 45% of customer claims in real time, whether they are made by phone or online, with the help of Sprout.ai and other key initiatives.
The number of claims settled within five days of initial submission by rose by 10%, thanks to Sprout.ai and other key interventions,
For some claims, policy documents can be reviewed in seconds. Historically, it could take claims handlers up to 30 minutes per claim.
Claims handlers are no longer constrained by the many documents associated with each claim, leaving them with more time to spend with customers, at times when human touch and empathy can make a real difference.
Value from claims data and systems is maximised. Sprout.ai delivers data insights that facilitate agility, improve retention rate and control costs.
Accuracy is improved.
Sprout.ai ’s products have been built to ensure that the rationale behind the AI’s decision-making process is clear and simple to understand. The decision-making process is more transparent, and handlers can explain decisions more easily.