Claims segmentation

FinTech investments and InsurTech startups have powered the domain of insurance to emerge as a hotbed of digital innovation. In this context, insurers are utilizing digital technologies such as photo apps, drones, and artificial intelligence to speed up claims segmentation and assessment. The trend also includes technologies such as integrated rule-based triaging, natural- language-based document screening, and the use of virtual assistants and online bots to simplify claims settlement. In addition, analytics based on data and information collected through the entire claims process helps to improve post-claims file reviews.

These instances ultimately result in an improved customer experience, higher levels of engagement with consumers of insurance products, and significantly lower claims handling and indemnity costs for insurance service providers. These issues gain significance because insurance fraud poses a huge challenge for insurance carriers. In recent years, fraudulent claims cost the global insurance industry an estimated $30 billion.

Prediction of claims characteristics

Insurance claims and billing systems represent arenas that can be automated through technology, such as artificial intelligence and chatbots. Machine learning (ML) is a growing and diverse field of artificial intelligence technologies, which studies algorithms that are capable of automatically learning from data and generating predictions based on data. For instance, machine learning can help insurers to classify life insurance risks, predict bodily injury liability insurance claim payments based on the characteristics of insured customers' vehicles, predict cost and severity of insurance claims, identify factors that contribute to worker’s compensation claims, predict mortgage risk using deep learning technologies, and calculate insurance premium according to risk.

Claims handling

New start-ups are leveraging artificial intelligence technologies and machine learning systems to analyse insurance claims for the automobile industry, optimise the business processes of the insurance industry by using artificial intelligence, creating mobile claim management solutions, building 1-day claim settlement systems, among others. Other operators are breaking new ground by simplifying the triage process that operates after a vehicle accident. Such innovation uses machine-trained estimates for repair costs, enabling agents to accelerate a claim past triage, and into repair, salvage, or appraisal. Essentially, an era of new insurance products – built on data and analytics – is emerging on the horizon. Pure-play digital business models – such as Lemonade in the US, Youse in Latin America, or Nexible in Europe – have deployed digital applications (such as chatbots) to re-invent the process of buying a policy (or filing a claim) into a fast, simple, and satisfying experience. This approach is a far cry from the analogue, and often frustrating, processes endorsed by traditional insurance service providers.

End to End Digitization of customer journey

Marketing, customer experience, customer relationships, and customer engagement – can benefit from the use of digitization. One insurance start up is using machine learning to convert handwritten files into structured data. This helps the start-up to understand the customer and her/his preferences in terms of insurance products and services. Another firm has deployed machine learning to identify patterns in the location and motion data, conferring a driving score to operators of vehicles, and using the resulting information to generate insurance quotations.

In one scenario, the insurance company (or insurance aggregator) can design business processes with digital technologies; this stance allows the virtual process do the job where a social ecosystem is created by way of technology, and within seconds of receiving a claim, it verifies through its ecosystem of the accident and processes the claim. We all have been accustomed by the use of GPS and Tracking systems which is a technological boon that can be implemented here and can be used at the time of verification by identifying the people connected in that social ecosystem. Therefore, we may infer that the future is customer-centric and will be shaped by behavioural science, with social and peer-to-peer networking and smart devices all playing a part.

The digital re-design of a claims journey must extend beyond superficial process improvements. Adeslas, a Spanish company, has deployed a complete end-to-end digitization of their claims journey, status tracking. Product simplification and customer/intermediary self-service represent two of the pivotal segments of said journey.

1. Customer-centric Products & Pricing: Artificial intelligence accompanied by machine learning has started a revolution of sorts in insurance. It helps insurers to follow up with customers, understand patterns & their needs better and provide a customized policy at a reduced cost.


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