Why invest in claims automation?
By automating and digitizing this process, insurers can not only improve the customer experience, but also drive satisfaction and loyalty while reducing expenses.
Published on:
8 March 2023
Imagine if you could cut the operational costs of handling claims by 30%.
It might sound outlandish, but in reality, it’s something you could achieve by focusing on the right thing – using digital technology to modernize your processes.
In today’s highly competitive insurance market, companies are constantly looking for ways to reduce costs and improve customer satisfaction. One area that offers significant potential for efficiency gains is the claims process. By automating and digitizing this process, insurers can not only improve the customer experience, but also drive satisfaction and loyalty while reducing expenses.
The Claims Process: A Key Touchpoint for Policyholders
The claims process is the moment of pay-back for being a loyal customer. It is the touchpoint that affects policyholders the most and is essential for building trust and driving customer retention. While most insurance companies focus on sales as the main source of revenue, claims handling is a huge opportunity to make a good impression on clients and differentiate from the competition.
Benefits of Claims Automation
- Increased Efficiency: Claims automation can reduce the time and effort required to process claims, resulting in faster claim settlements and improved customer satisfaction. Automation can also enable claims adjusters to focus on more complex claims, where human expertise is required.
- Cost Savings: Claims automation can reduce costs associated with manual claims processing, such as staffing, training, and administrative overhead. It can also help to identify fraudulent claims, which can result in significant cost savings for insurance companies.
- Improved Accuracy: Claims automation can reduce errors associated with manual data entry and processing, leading to increased accuracy in claims processing. This can help to reduce the number of denied claims and improve customer satisfaction.
- Better Customer Experience: Claims automation can improve the overall customer experience by reducing the time required to process claims, providing more accurate claims settlements, and enabling faster resolution of customer issues.
Becoming a winner in insurance
In today’s insurance market, an insurer can still win by offering products. However, in the future, the key to success will be in providing assistance, prevention, and other adjacent services, as well as offering the right product to the right customer at the right time. This is what digital insurance ecosystems are all about. According to McKinsey, ecosystems are on pace to become the dominant business model, constituting 30% of global sales by 2025 across industries, generating a whopping $60 trillion in revenue that year.
Claims automation is a technology-driven solution that can help insurance companies to streamline their claims processing, reduce costs, and improve customer satisfaction. While there are challenges associated with claims automation, the benefits far outweigh the risks. Insurance companies that invest in claims automation can improve their bottom line, reduce risk, and enhance the overall customer experience.
To become a winner in the insurance industry, companies must adapt to this shift and embrace the opportunities provided by digitalization and insurtechs. This includes investing in claims automation solutions and engaging with ecosystems to generate value and stay competitive in an ever-evolving market.
If that’s not enough figures for you, BCG’s studies show that the very term “ecosystem” occurs at least 13 times more frequently in annual reports now than a few years ago.