How is digitization altering insurance claim settlement?

For a very long time in India, the insurance industry has been pretty much resilient to digital evolution. The traditional insurance processes involved cumbersome paperwork, a lack of easy to understand information, and tedious documentation. The entire buying and specifically claimed journey remained opaque, complex, and frustrating for the customers.

Over the past few years, changing business landscape, new digital-first entrants, and evolving customer expectations have transformed the way companies deliver services and handle the moment of truth, yes, including insurers.

Customers now expect transparent and straightforward information about products/services, quick delivery alongside 24-hour access to the support desk. In addition, with the advent of messaging platforms and bots, customers want greater control of how to communicate. With this, they also need bespoke services that address their requirements and challenges, including insurance products. Digital technologies have enhanced the overall customer experience, solve their queries faster and ensure seamless interaction.

How is Digitization Reimagining the Claim Settlement Process?

Before we can look at this, it is essential to look at the entire claims settlement journey. The journey starts right from prevention to notification of loss to evaluation and assessment to finally settling the claims. Unfortunately, the ‘moment of truth’ was perceived as nothing less than a nightmare for many policyholders due to exhaustive paperwork, lack of timely information, hazy and lengthy processes.

However, that is changing. Insurers are recognizing the importance of a customer-centric approach while settling claims to attract and retain customers. And more and more insurers are leveraging digital technologies to achieve this objective.

In one of the reports published by McKinsey, automation can improve customer satisfaction by 15% and improve accuracy by 4% and reduce the claims journey cost by 30 per cent.

But the quintessential question remains how?

For example, Insurtech players in India have embraced the digital ecosystems to meet customers’ expectations and remove bottlenecks along the claims settlement journey.

The traditional processes involved cumbersome paperwork that looked never-ending and multiple follow-ups. When implemented right, digital claims positively impact all performance indicators such as speed, effectiveness, and even customer satisfaction that build healthy NPS.

Here are a few benefits of integrating digitization into the process:

• Achieve cost-efficiency
• Faster settlement of claims
• Seamless client interaction at every stage
• Customer satisfaction by managing their expectations
• Accuracy and efficiency while settling claims
• Transparency in the process
• Digital Technologies and Their Role in Claims Settlements

Virtual assistants, bots, and artificial intelligence technologies can simplify claims settlement and provide relevant data feeds to help insurers become more proactive and offer meaningful services.

With data and analytics, insurers will focus more on risk avoidance than risk mitigation. Robust digital First Notice of Loss (FNOL) systems can help in the faster settlement of claims. With technology, the end-to-end journey will become more thoughtful, convenient, and seamless. The spillover is enhanced customer experience, lower costs, and better-operating margins for the insurers.

Reducing frauds – A further key aspect is the role that technology can play in fraud detection. Fraudulent claims are a well-known cost to companies, which the insurance industry then shifts to its customers, so reputable clients bear the cost of frauds. From software tools analyzing big data, to blockchain infrastructures, there are several solutions that digital technology can offer to reduce the number of frauds to insurance companies, with benefits for both companies and customers.

The Future of the Insurance Industry

The insurance industry is in the middle of a radical shift. The infusion of newer technologies will change the products and services and even the business model. With digital technologies embedded into our daily lives, insurers need to take a step back to understand the changing customer expectations and align their process to match those expectations. Only the companies that can proactively and decisively adapt to the change shall sustain and flourish. Those that do not may find it challenging to generate lucrative returns.

Source: Financial Express