Benefits of Integrating Digital Technologies in Insurance Claims Processing

Insurance CIO Outlook | Monday, January 09, 2023

Insurers and policyholders benefit from efficient claims processing through chatbots, OCR tools, computer vision, and advanced analytics.

FREMONT, CA: The claims processing costs insurance companies nearly 70 percent of their revenue, according to research. Claims handling is linked to effective fraud detection and prevention because most fraud types, such as complex or double dipping fraud, occur during the claims processing process.

A small percentage of all claims expenditures is devoted to fraudulent claims, and most claims handling deals with helping customers in injury-related incidents. The efficiency of claims processing is thus a criterion for switching providers, according to 87 percent of customers.

The following technological applications facilitate easier claims processing.

Chatbots: Policyholders can interact with chatbots to make claims when they have questions. First notice of loss (FNOL) can speed up the submission process by guiding customers through taking videos and photos of the claim. Insurance companies can also use chatbots to contact policyholders to arrange payments or answer questions, and Chatbots automate customer relations.

Optical character recognition (OCR): In the initial claims investigation stage and policy check, handwritten documents, including witness statements, policyholder statements, police reports, and health records, are processed. OCR allows insurers to automate the extraction of information from such documents so they can focus on processing claims that require human intelligence.

Computer Vision: Computer vision models generate results using videos and images as inputs. Assisting with claims investigation is one of their possibilities. A computer vision model can calculate the cost of loss from videos and photographs taken by policyholders or claims adjusters. They can help insurance companies estimate their liabilities and plan and organize their financial resources based on those predictions.

Advanced analytics: Advance analytics predicts actual claim costs based on the adjuster and expert reports. Fraud detectors that use advanced analytics can also identify patterns between fraudulent acts. It is possible to utilize behavioral analytics to determine whether a claim complies with the terms of the policy. Insurance companies can use such tools to examine browsing histories, clicks, location, and other data to assess the validity of policyholders' claims.

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