Charlie Newark-French, Chief Operating Officer, Hyperscience
Imagine the competitive advantage an insurance firm could have by being able to confidently state that it pays out most insurance claims within seven minutes, and actually have the cutting-edge tech and data to back it up. Thanks to AI-driven automation that begins in the back office, we’re on our way to making that a reality.
Changing market dynamics are driving an automation revolution within an insurance marketplace that competes on two factors: cost, and customer experience. Insurers work to mitigate costs and risks, while savvy consumers demand faster service, increased transparency and greater control over the products they purchase and how personalised their plans are. The ability to deliver on this begins with data – the critical “step zero” of any business process.
Insurers today succeed or fail based on how they process and use data to make swifter and smarter business decisions. Yet the insurance industry continues to struggle with the first mile of data processing, partly because that information is unstructured and enters an organisation in various ways, such as online portals, PDFs uploaded to an email, or physical documents. Classifying this information, extracting the data, and getting it into the correct system of record remains extremely manual, leading to unnecessarily complex workflows, delayed processing times, high costs and increased errors.
Legacy band-aid solutions
If you were to peek under the hood of most major insurers, you might find a complex patchwork of outdated, legacy technology and cumbersome, manual workarounds. Companies today are spending around $60 billion each year on data entry to turn unstructured document data into formats that can be read by various systems. This creates an information and operational bottleneck that prevents customers from getting the experience they demand – and have come to expect – and puts an insurance organisation’s position in the market in jeopardy.
A better way: AI-driven automation
Insurance leaders everywhere are rethinking how they operate to reduce manual burdens, modernise existing processes and unlock a more agile, customer-centric approach. According to McKinsey & Company’s Insurance 360° benchmark, “IT costs per policy for players with modernised IT can be 41 per cent lower than those of players with legacy IT systems.” Intelligent automation technologies that leverage the latest advances in AI and machine learning (ML) will become the critical driver to greater data, fewer errors and faster and more reliable insurance processing – whether that’s processing a life insurance application or handling a medical claim.
Leading insurance companies are already using these innovative solutions to automatically classify and extract data from diverse document types, including those that are distorted, handwritten, of low resolution and more. These solutions continue to learn and improve based on the data they’re exposed to, leading to fewer errors and greater automation over time.
One Global 200 insurer we work with receives more than 20 million pages within its life and retirement business alone each year. Relying on people to manually index, route and key the information was unsustainable from a cost and resource perspective, and most importantly, prevented the firm from responding to customers in a timely manner and maintaining a competitive advantage. After testing legacy, rules-based technology that failed to deliver accurate data, the firm adopted intelligent document processing (IDP) software and was able to reliably automate document processing and data extraction, soon realising a 70 per cent reduction in manual entry – almost 30 minutes saved per transaction. The solution enabled a smoother experience for brokers and customers alike, freeing up critical resources to focus on delivering more innovative products and services and staying ahead of market conditions.
By investing in innovative automation technologies, insurance leaders can reimagine workflows and processes and build a new digital assembly line that seamlessly orchestrates work between software and people, based on the needs of the task and the strengths of each. By enabling the free flow of data, insurance companies can increase the quality of their business decisions, build a workforce more prepared to meet the future, and facilitate a performance-driven organisation with superior outcomes.
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