Automation versus Human in claims processes

Automation versus Human in claims processes

According to Insurance Innovators’ survey of over 150 insurance executives, 95% agree that the claims experience is where insurers have the greatest opportunity to win loyalty but also the greatest risk of losing it. How does automation fit into this?

Automation, digitalisation, AI, technology…

The rise of insurtechs and uncapped technological capabilities has made a huge impact on the insurance industry. In parallel, customers’ digital expectations are growing and it’s obvious that there is a need for the industry to become more agile.

Whereas the benefits of automation are obvious (increased productivity, speedy settlement process, etc), there is concern for too much automation: a fear of losing control of the claims process, a concern that the relationship with policyholders will deteriorate or an increase in frauds. Indeed, the fact the technology is available doesn’t mean that automating a claim from A to Z is always the right approach.

How can insurers optimize automation?

Insurers’s aim is to improve claims performance, reduce cost, improve efficiency and provide the best customer journey possible but they have to deal with different types of claims (in terms of value, complexity, emotional implications) and different customers (in terms of generation, digital expectations, etc). However all customers want the same: an easy access to their insurance company, a fast and smooth claim process and to receive a fair and transparent compensation. Since the types of claims and customers vary, policyholders should be offered the right channel and claim experience according to their needs. Automation allows companies to offer a personalized claim’s experience.

What is the right balance between automation and human touch in the claim’s process?

With the help of technology, insurers can provide a wide range of options to their customers: the option to communicate in different ways (telephone, website, apps) and to process their claim how they prefer.

Omnichannels

Not all customers want to  call their insurer to file a claim whilst not everyone is comfortable downloading an app, talking to a bot or filing in a digital form. Omnichannels option is the correct approach as it provides equally valuable claims options to the different types of claims and types of customers.

Whilst automation cannot replace empathy, it can free time for claims handlers to focus on sensitive cases where the human touch is necessary. As well as freeing time, it also enables them to provide the right type of support to the right type of claims: warmth and compassion.

At the same time, not all claims need to be handled by a person. Full STP has been proven successful for most P&C claims which are characterized by being low value and high volume. When automation is done right: simple FNOL, transparency, update, clear outcome, fast settlement, the policyholder will absolutely feel no need to speak to someone about their claims. They will experience a smooth, fast and clear customer journey. Exactly how a claim should be handled.

Phygital 

But even for more complex cases, such as a fire or a large robbery, where a lot of items and emotions are at the heart of the process, the tedious part of the process can be automated. Instead of sending a paper document to the policyholder to fill in, an automated digital form can be sent. The process of listing the damaged/lost items is a lot simpler and faster yet the policyholder still has a close contact with the person. In turn, when they receive the information from the customer, it’s a lot faster and simpler for them to check and process. There is more focus on helping and empathy rather than friction and delays. It also helps reduce customer’s effort and the hassle factor of registering a claim.

Insurers can then choose what part of the claims process can be fully automated or not and what type of claims. So by automating simple claims and all recurrent tedious manual tasks, automation puts the human back at the center of the claims process. In any case, the benefits are invaluable: shorter and smoother process, competitive advantage, increased productivity and customer retention.

Insurers who deploy claims automation, will not only gain in operational efficiency but more importantly will offer a much better customer journey and customer experience to the policyholder.