The COVID-19 pandemic had adverse effects on insurance organizations as many insureds suddenly started filing claims. This not only caused damage to their financial reserves but also made it challenging to settle these increased numbers of claims.
Traditional ways of paying claims through checks (papers) have become a burden. Before the pandemic, less than 15% of insurance claims were handled virtually, but after the company’s shutdown in 2020, it increased to 100%.
Based on a conversation with carriers, claim tech and virtual claim handling have settled over 60% of claims. This indicates that the carriers are moving toward a future of touchless claims, and consumers are also getting more comfortable with automated processes.
Carriers are now taking lessons from the pandemic and re-examining digital strategies to recover from the economic crisis. The focus, for now, is to increase speed, especially with complex issues like multi-party claim payments.
Failure to act can increase claims cycle times
Read the following issues; there are several reasons why digitalization can be a big ask.
- Settlement documents are usually prepared with paper.
- Dealing with claims with multiple parties involves assessments and approvals, taking more time.
- Policies are becoming more bespoke.
- The monetary payout for losses to policyholders, which carriers still provide through a paper check by mail; this option can be expensive and vulnerable to fraud.
These fractions consume a lot of time and may affect customer experience. It also dramatically increases claims cycle time. Now the customers find it inexcusable in the post-Covid scenario when most insurers are adapting and handling financial transactions digitally with transparency.
In the coming few years, 77% of insurance carriers are likely to invest in automation to streamline claims processing. Source
The Future of Claims reveals that insurance carriers are moving toward touchless claims; here are some highlights.
? Insurance carriers and consumers are satisfied with the automated claims process. 62% of customers say it’s more convenient to submit a claim any time and anywhere, whereas 55% say it enables faster claims settlements.
? Recently launched, more tech-savvy carriers are adopting tech faster as 52% of Gen Xers and 68% of Millennials say that pandemic has made them file claim online.
? For claim processing, mastering a hybrid model provides benefits of automated solution with access to help from Claim representatives when consumers need them, avoiding mess and frustration.
? Automation has shifted from efficiency-driver to driving decision making as carriers benefit from AI and Machine learning to enhance the process for segmentation, damage assessments, estimation, and payouts.
Investing in Claimstech today can influence insurance consumers’ mindset. As a result, insurance companies will try to make these efforts visible by building an intuitive user experience around claims that bring accessibility and elegance to customers.
No doubt the pandemic raised the need to digitize both back-end and front-end experience for customers. At Insurance Support World, we are here to help you with claims management through our excellent team of insurance professionals handling the most complex claim projects. In addition, we assist with technology adoption, helping you respond to large and rapidly evolving claim situations.