Let’s start with the data entry of getting the claims in the system. The First Notice of Loss (FNOL) can be made 100% digital. Using a mobile app, a chatbot, or a web form to notify the insurance company of a claim is way more efficient than having a call center staff receive the FNOL. Yes, some accommodation is required for the claimants who are not tech savvy or have other limitations/impairments that prevent them from using a mobile app, a chat bot, or a web form.
Claims are an essential part of the insurance landscape. After all, that is why people buy insurance, to claim compensation in case of a loss.
Among other things, the claimant expects the claim process to be quick and simple. They also want the compensation to be the highest possible. While the desired compensation goal may conflict with the goals of the insurance company, there are common goals that are shared by the insured (claimant) and the insurance company. Primarily, the speed of settling the claim is a common goal in most scenarios.
Technology is the catalyst that can simplify the claims workflow by making it efficient, speedier, and less-costly to the insurance companies.
The FNOL should be modeled to ask questions that will be checked against the policy parameters. For this, the first step is to make a rule-based decision tree for the policy parameters. At the time of underwriting, the risk is priced with several factors taken into consideration (underwriting guidelines). An insurance product is shaped, and the policies are issued against it. These rules/conditions should be digitized and fed into the claims system. The claims system’s entry point, the FNOL, should be tailored to query/verify these rules. A rule-based decision tree will not only help the claim processors but will also benefit the claimants as well in getting instant confirmation and sometimes decisions about their claim.
The other area of impact is the use of mobile apps to capture audio, visuals, and location of the loss. Think about someone reporting an auto claim. Using a mobile app to take photos, videos, record voice notes which is recording the date, time and geo-location of this media goes a long way to verify the authenticity of the loss. While some insurance companies require this method, others have the common objection that their insureds are not tech savvy. While it may be partially true, in many cases the entrenched mindset of the insurance company’s decision makers is to blame. Incentivizing the claimants to use the technology goes a long way. The incentive can be as simple as faster claim processing times if the FNOL is made using the mobile app!
In short, many decisions can be automated based on digitized data. There is immense value for the insurance companies to invest in digitizing the claims process. In addition to the efficiency of the process, the data once analyzed will provide more insights for the insurance companies to fine tune their insurance products.