With more data and variables consistently coming into play, the modern insurance claims process is becoming increasingly complex. On top of this, insurers are expected to determine accurate settlements and need to be able to flag potential fraud claims quicker than ever.

Given the fact that insurers often approach customers during the most emotionally vulnerable moments, it calls for a delicate balance between empathy and automation to give the customers the all-important peace of mind they deserve.

Presently, handling claims is more or less a manual process and much of the process relies on the individual experience and experience of the adjuster. But with changing times, insurers are also investing in data analysis capabilities, technology ecosystems, and digital experiences.

Such developments are altogether going to make the claims process more automated and pattern-driven. In light of this, analysts predict that insurance companies are likely to make marked improvements in operational efficiency, customer satisfaction, and overall accuracy.

Currently, insurers may be doing a great job at critical customer touchpoints of claims reporting, but the end-to-end claims process continues to be costly due to the lack of full integration. Here the challenge for insurers is to make a seamless transition towards making the claims reporting function more cost-effective through digital customer care solutions.

It is increasingly felt that reporting a claim is one of the few instances where customers have direct human interaction with the insurer. And introducing a digital touchpoint is not really in the interest of the insurer. This blog sheds light on other challenges faced by insurers when it comes to claims management. Here it is:

Challenges in Claims Management Faced by Insurance Companies

Complexity of the Claims Process: With numerous stakeholders and decision points, the claims process consists of many business rules that could seem difficult to execute. It can take the shape of many employee tasks and an unfulfilling customer experience. Insurers seeking to automate will find many activities to track and manage and currently very few comprehensive systems are capable of handling this level of complexity.

Changing Customer Needs: The expectations from customers are on the rise, given the fact that there are buying insurance services outside their insurance needs. With customers facing a claim one in several years, insurers are expected to manage the emotions and the logistics associated with the entire process. Even though advanced technologies can be put in place to remedy the complexity, there can be no substitute for the human element when it comes to offering assurance and building trust.

Proliferation of Emerging Technologies: Insurers are faced with a technology landscape that offers a multitude of unproven Insuretech vendors and their associated technology. The situation creates a dilemma when it comes to selecting an effective tech solution for complex and integrated workflows. Currently, many insurance companies are focusing on improving their claims process that allows them to engage with their customers more effectively. The challenge for insurers is to choose the best solutions and integrate them into the already existing claims systems.

Changing Claims Workforce: With skilled employees retiring, it is becoming a challenge for insurance companies to find new talent. Most often, instead of recruiting, insurance companies are responding with automation for low-skilled activities and modifying their traditional talent requirements. On top of that, insurance firms running on legacy IT systems are finding it increasingly hard to find individuals conversant with legacy coding languages. At the same time, the demand for such skilled coders outstrips the supply in the job market. Given the scenario, many of the insurance firms are opting for configurable IT solutions that can be run by business analysts instead of coders.

Maintaining Legacy Systems: One of the most visible challenges in the insurance sector is the resource drain imposed by maintaining legacy technologies. Most often, the rigid legacy systems are the primary barrier towards fulfilling customer requirements and optimizing operations. These systems also carry legacy IT systems for development and testing which further slows down progress and innovation. In spite of knowing these drawbacks if insurance companies continue with legacy systems, then these could be the repercussions, these are:

  • Decrease in customer satisfaction will result in reduced customer retention. Buyers often expect certain customer experiences, when these are not fulfilled, they may go elsewhere.
  • Even though, the insurers may bring in automation, the underlying technology will compel the companies to spend more on the maintenance and running of the legacy systems.
  • Claims handling accuracy will decrease due to the outsourcing of the claims process to specialist vendors with limited oversight. Due to the complexity of legacy systems insurance companies are unlikely to find avenues for the integration and consolidation of multiple data sources to monitor vendor activity and effectiveness.

While it may take years or a decade for automation and specialization to fully take place. Given the sheer magnitude of activity in technologies related to AI and claims-specific insurance tech, it is more or less seems inevitable for insurance companies. Alternatively, if companies think that they can put off the adoption of technology to a later date, they are bound to fall behind.

Building the Way Forward

Fortunately, today’s modern claims systems are allowing insurers to improve their processes and offer better interactions with their customers all at the same time. Here is what the future holds for insurance companies:

  • Smart Processing-Automating Processes: These will suggest actions and help make predictions to optimize and make the claim process seamless.
  • Seamless Customer Experiences: It will provide the customers with ideal journeys through the leveraging of connected interactions across multiple channels with the help associated systems and services.
  • Continuous Collaborations: It will optimize workloads and will manage multiple aspects of claims with transparency across internal and external parties.
  • Operational Transparency: Identify and incorporate trends along with compliances to remedy inconsistencies and inefficiencies in the claims process.
  • Business Agility: It will allow insurers to react swiftly to customer commitments, regulatory requirements, and changes in the business process.
  • Innovative Flexibility: Future systems will allow the consistent introduction of new claims processes and technologies.

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