How to build a business case for AI-powered claims transformation
March 31, 2023
Claims are one of the most important customer touchpoints for insurers. Swift, fair resolutions lead to happy, loyal customers and higher tNPS. Delays, mistakes, and a lack of communication drive customers away.
The claims process includes:
The capture and validation of a claim
The checking of claim details against a policy
Determining settlement and resolution
Manual processes and outdated systems prevent each of these steps from being as efficient as possible.
However, AI such as the automated claims processing technology we have built here at Sprout can powerfully transform and optimise claims.
Innovating these processes and systems ensures operational efficiencies are achieved for claims and the business as a whole.
When customers know claims processing will be swift, accurate and fair, they trust the insurance industry. Furthermore, claims handlers have time to focus on serving their customers with empathy, speed, and transparency.
Read more: Joanne Richardson, former Health Director at AXA, on how insurers can overcome legacy systems, unstructured data, delays and inflation
Insurance leaders are eager to find ways to become more efficient, with 95% of insurance executives saying they will accelerate their digital transformation efforts.
However, upgrading the claims process requires an upfront investment of time and resources. It is one thing to say they will upgrade, and another to actually do it.
Letting things remain as they are might be efficient in the short term, but in the long term will lead to higher costs, slower processing, and a loss of ground to competitors.
The blog will help you build a compelling business case for AI-powered claims transformation today.
What are the benefits of claims transformation?
Zurich has upgraded their claims processing with the help of Sprout.ai.
98% accuracy from over 2000 claims assessed
£75K+ leakage and additional recoveries identified
+100 TNPS from handlers, with increased consistency, confidence and clarity
Upgrading the claims process can lead to
A better customer experience
The ability to process claims faster and with greater accuracy translates into higher customer satisfaction. Here at Sprout.ai, we are proud to be able to help insurers boost tNPS and client retention rates.
When the collection and processing of claims information, policy term reviews, payment oversight, and customer information updates is automated, claims handlers are free to focus on providing excellent customer service.
Reduced costs of settling claims
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.
Increased efficiency and capacity of claims handlers
When claims handlers need to collect and process claims information, review policy terms, oversee payments, and update customer information, they have little time to speak to customers. When insurers automate claims processes using our technology, handlers can respond quicker to customer queries, and resolve their claims faster.
Maximised value of claims data and systems
Technology enables insurers to extract data that can be leveraged to enrich and enhance decision-making processes, resulting in greater efficiency.
Personal auto insurance leakage alone comes to $29 billion each year, according to Verisk. That is driven by fraud and human error, both of which can be reduced with automation.
Average human accuracy levels in claims processing are 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.
Does claims transformation disrupt workflows and cause lots of upheaval?
Not with the right partners, such as Sprout.
Claims transformation is about altering the current processes and systems in place in order to ensure operational efficiencies are achieved.
Typically, the outcome of adding claims automation into the end to end claims process augments, rather than disrupts.
Read more: How Sprout.ai partnered with Zurich UK, integrating cutting edge, data-led technology with their existing systems and processes to enable end-to-end property claims automation
More data, the automation of manual activities, and the contextualisation of claims information into actionable recommendations all speed up workflows, enabling claims handlers to do more with their time.
What’s the ROI of claims transformation?
ROI is driven by reducing costs and reducing leakage. This is different from insurer to insurer, but lower costs can be driven by:
Less reprocessing of settled claims
Lower outsourcing costs
More accurate payment of claims through reduced fraud and errors
The question to ask is: What gains in efficiency, such as hours saved per claim, will this upgrade bring?
In the past, insurers wanting to upgrade the claims process faced obstacles. Regulation made it difficult for them to experiment, while limited competition gave them little encouragement to do so.
That is no longer the case today. Real time, automated claims processing is possible. The insurers that offer it will be the ones that thrive in 2023 and beyond, whether they are legacy companies or digital challengers.
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