Using Today’s Tech to Optimize Insurance Processes

by Andrea Vieten

It happened while we were having a nice family BBQ at my house on a sunny autumn day last year. My brother-in-law went straight through the mosquito net of our patio door. While we were happy that he did not get hurt, the door looked terrible. The frame was distorted and scratched, the net was lacerated.

This damage was clearly a case for his liability insurance. On the same day, my brother-in-law filed a claim at his carrier. He sent pictures of the damaged frame, mosquito net and surrounding area, as well as a detailed description of the damage. We called the window manufacturer to get a cost estimate for the replacement of the door.

I expected the claim to be a straight forward one, but I was proved wrong.

How the insurance company handled the claim

A few weeks passed before I finally received a letter from the insurance company asking for pictures of the damage, a written in-depth damage description, proof of purchase as well as a cost estimate to repair the door. I was surprised as this information had already been provided by my-brother-in-law weeks ago and while I had hoped to get a final feedback from the insurance company I had the impression the claim was still at the beginning of the claims handling process.

As I really wanted to get this settled, I sent everything in. Again, some time passed until I got another letter from the insurance company informing me that a claims adjuster would like to personally take a picture of the damage.

Let me give you some background information about the policy: This was the first claim filed after a three year contract; the loss amount was 280€.

This claim is a perfect example for why insurance companies need to review their processes. This claim is certainly a candidate for fast track settlement. Taking the customer relation and the loss amount into account, it does not make sense to invest any more handling time into this type of claim.

Some days later, I opened the door to the claims adjuster. He had driven 50 km one way to do the on-site visit. After 5 minutes he handed a signed confirmation to me stating that 280€ will be wired to my account.

Business process optimization can reduce costs and increase customer satisfaction

I am sure the insurance company at least tripled the initial loss amount by investing claims handling time and involving the claims adjuster. And I have to admit – I was not very happy with the time I had to invest into the settlement process myself. I am sure, next time I have to look for a new carrier, I will not go for this one.

This insurance company definitely needs to improve the efficiency and effectiveness of claims operations. Business process optimization (BPO) is still a challenge for some insurance companies even though there is modern technology available to enhance the decision-making process. By using intelligent decision-making software, insurance companies are able to lower the claims handling costs by extending the fast track settlement and introducing digital decision making while maintaining claims integrity, avoiding overpayment or paying fraudulent claims as well as enhancing customer service and satisfaction.

Implementing a fast track settlement

Insurance companies that implement fast track claims handling are able to settle low to moderate complexity claims within a short amount of time. Intelligent decision making software can be used to support the settlement process by determining the complexity and risk level of a claim. The software performs background checks on the customer relation, on information about the third parties as well as on claims, policy and payment information. Hybrid decision making systems allow consideration of expert rules as well as machine learning algorithms in the process of complexity and risk evaluation.

The insurance carrier greatly benefits through the efficiency by which a large number of claims can be resolved within a short period of time. In addition, the carrier’s staff has more capacity to focus on claims with higher complexity and risk. For the insured or affected, the main benefit is that compensation for damages is obtained much more quickly. This is especially true for liability claims where the third party already has to cope with the damage of their own property.

I believe fast track settlement is already very important and the relevance of business process optimization will grow as the claims environment becomes more digitalized and driven by customer-satisfaction. Intelligent decision making software is tailored for carriers to control risk and complexity of claims and enables the insurance company to greatly benefit from fast track claims handling.

In case of an insured event, aren’t we all happy to settle and resolve claims fast without investing more time than necessary?

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About the author

  • Andrea Vieten

    As a Senior Business Consultant at INFORM GmbH, Andrea Vieten has been responsible for managing global implementation projects in the financial industry. With more than 10 years of experience, she has consulted and guided many financial institutions to the successful implementation of intelligent decision systems in the areas of risk, processes and compliance.

    All posts by this author

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