Thoughtful Process

Using artificial intelligence to get smart about handling claims.

By Daniel Hughes

A century ago, most people didn’t even own insurance policies. Those who did were fortunate to have a safety net and a means for recovery when a fire, flood, or act of nature impacted their lives. There were fewer choices back then when it came to selecting an insurance carrier. As a result, customers were more likely to stay with a provider through thick and thin.

Today, policyholders are not nearly as warm and fuzzy about their insurance carriers. Policies are easy to abandon, and the barriers to replacing an insurance company altogether are lower than ever. Today’s customers have different expectations; they expect accuracy and responsiveness 24/7. And more importantly, their experiences must be satisfying and consistent across all channels of communication, which presents a whole new set of challenges.

According to a study by the Aberdeen Group, customers currently use up to nine different communication channels to contact companies: email, Web, text, live chat, social media, phone, fax, physical mail, and beyond. Yet most organizations are optimized to handle only one channel—phone. The result is a failure to meet customer expectations, frustration on the part of claims professionals, and mounting expenses, which is not a formula for success. To remain competitive and profitable, insurers must change their approaches when responding to customer communications, not the other way around.

The increase in multichannel customer communications has resulted in an avalanche of data—most of it unstructured—inundating insurance companies at an unprecedented pace. Insurers that fail to respond to customer inquiries in a timely fashion will have unhappy policyholders in a highly competitive market. Adding to the complexity is that claims volumes peak during catastrophes, while policyholder expectations for superior customer service continue to increase.

When it comes to driving smarter claims processing, insurance companies are under incredible pressure to differentiate and create a competitive advantage. Providing fast, complete responses to policyholders is critical because a customer whose issue is not resolved on the first call is 15 times more likely to switch to a competitor.

Challenges in Today’s Claims Processing

Today’s claims processing still involves a significant amount of manual effort that includes many repetitive tasks, such as checking policyholder input for completeness and requesting missing information. While capture of this data is automated for some communication channels, a lot of information still remains trapped in siloed workflows. This creates enormous hurdles for automation, cross communication, and establishing a comprehensive understanding of each claim. In addition, most insurers describe their handling of newer information channels, such as email, social media, and texts, as ad hoc and, in many cases, chaotic. Unfortunately, in more cases than not, this lack of transparency and integration results in poor productivity for claims professionals and long processing times for policyholders.

Insurance customers are more demanding, and they have higher expectations, especially for speedy transaction processing, multichannel interactions, improved customer service (including e-service), and more convenient channels. These elevated customer expectations set the bar high for claims handling and interaction with insurance claims professionals. The more disjointed and manual processes that remain, the greater the gap between customer expectations and the level of experience that is delivered.

With the explosion of social media and new multichannel communication platforms, consumers have come to expect that their input via these channels instantly will be considered in aggregate during a claims request. They expect each claims professional they encounter to be knowledgeable about every aspect of the claim. They want to choose the communication method that suits them at any given time and have the ability to switch between channels without having to repeat information that they have already provided. This means insurance companies must integrate all methods of communication, providing claims professionals with a 360-degree view of customer correspondence, regardless of the channel.

In addition, quick processes matter. Excuses like “Sorry, my system is a little slow today” will no longer cut it. As customer expectations have changed, so have the demands of claims professionals. Frustrating and slow procedures with manual steps lead to unsatisfied employees in an industry already roiled by an aging workforce and the loss of its most experienced talent to retirement. Many insurers are struggling to leverage the experience of their current workforce and bring on new workers in a controlled, productive manner. The high turnover rate and constant need to train new claims professionals present significant challenges and new costs as insurers look to maintain consistent and superior customer service to remain competitive.

To eliminate slow, manual claims processing, it is essential that insurance providers integrate siloed processes across all communication channels and automate processes that currently are being handled manually.

Artificial Intelligence, Real Results

By using artificial intelligence (AI) based software platforms, insurers can create a 360-degree view of customer communications that enables claims professionals to deliver quick and consistent responses and superior customer experiences.

AI is a powerful technology that can recognize text patterns and achieve contextual awareness. Based on dynamically weighted probabilities, it can make decisions about how to respond to a person or a case. Virtually no human intervention is required. The most intelligent system self-optimizes by integrating behaviors of expert users as they evaluate and extract information into a knowledge base. In other words, the system “learns” how to classify inquiries correctly, whether they come from email, Web forms, social media, or paper documents.

In addition to seamlessly managing customer inquiries, AI-based solutions integrate information from all stakeholders in the claims process, including policyholders, carriers, independent claims professionals, appraisers, litigation professionals, and others. Improving the flow of information between these parties and sharing data from various communication channels are essential to resolving claims in a timely manner. AI-based solutions empower claims professionals to respond faster and more accurately to customers, creating a positive customer experience.

In the same way that AI-based solutions help insurers learn and retain knowledge about their customers, it also can help them to learn and hand down valuable knowledge from one generation of claims professionals to another. By creating a knowledge transfer system, insurers can train new claims professionals quickly while minimizing the impact on costs and customer satisfaction. It also helps to streamline the workflow for handling claims. For example, complex claims can be routed and assigned to the most knowledgeable claims professionals based on their areas of expertise, age group compatibility, or availability, while easier cases can be sent to newer staff members. This ensures that people are better matched with tasks that meet their skill levels, which keeps them motivated and improves the customer experience.

The Way Forward

Claims processing can be a source of great pain and frustration for insurance companies that struggle to effectively manage multichannel communications. It’s critical to get this right because responsiveness to policyholders has a huge impact on a carrier’s profitability as well as customer loyalty. AI-based solutions enable insurance providers to automate the process and provide a seamless, consistent customer experience. And satisfied, loyal customers are the key to success in a highly competitive market.  

Daniel Hughes is an enterprise solutions manager for Kodak Alaris, a global provider of artificial intelligence software for customer experience management. He has been a CLM Fellow since 2015 and can be reached daniel.hughes@kodakalaris.com, @KodakDan (Twitter), www.kodakalaris.com

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