Traditional manual insurance claims management processes are tedious and prone to human error and delays. The result is dissatisfied customers and overworked employees. This is where AI in insurance claims processing proves to be a game-changer. Claims management processes are being transformed by AI in insurance with automated tasks, improved accuracy, and simplified fraud detection, leading to faster claims processing, reduced costs, and enhanced customer experiences. Your employees no longer need to manually hunt for missing information across siloed systems or undertake time- and effort-intensive reviewing of key details in claims. That’s the power of technology in insurance. With the application of AI in insurance claims management processes insurers gain the ability to keep customers satisfied while driving business success.
How AI Helps Insurance Claims Processing & Management
Claim processing will emerge as the “most important insurance function by 2030, says McKinsey. AI is the cornerstone of the digital transformation of the insurance sector, with personalised customer experience and rapid claim settlements being key factors driving the adoption of the technology. Plus, AI-powered automation of underwriting workflows streamlines operations, reducing time spent on repetitive manual processes, administrative tasks and tedious data inputs. Here’s a look at how AI can help insurance claims processing and management.
40% of underwriters’ time is spent on non-core and administrative activities. Accenture estimates that this could lead to industry-wide efficiency losses of up to $160 billion by 2027.
Source: Accenture
The Power of Automation
AI algorithms can automate tasks like data extraction from documents, document verification, and initial assessment of claims, reducing manual workload and processing time. An insurtech-powered intelligent underwriting solution takes care of processing the claim submission, enriching the data and triage, and even bind scoring. This frees underwriters to focus on adding value for both the customer and the insurer. Given that 40% of incoming calls to insurance providers are to check the status of claims, an AI-driven solution can ensure timely status messages to improve efficiency, reduce incoming calls, and improve customer experience.
AI helps reduce claim resolution costs by up to 75%, drive higher claim specialists’ productivity, and speed up the claim cycle 5-10x via intelligent process automation.
Source: Scnsoft
AI in insurance sector can be applied to automate end-to-end claims processes with robotics process automation, business process management, and machine learning. For example, automated systems can analyse photographs of damaged properties or vehicles and compare them to previous cases to enable quick and accurate claims decisions. This eliminates the need for manual handling of claim reimbursements involving laborious tasks, such as opening of individual photos and scans, analysing files, and uploading relevant documents. This way, claims process automation also reduces the risk of errors, bottlenecks, and inefficiencies by handling large volumes of data across various sources in near real-time.
Improved Speed, Efficiency and Accuracy
AI automated insurance claims systems can analyse claims data quickly, identify potential issues, and make decisions faster, leading to quicker claim resolutions. This is because AI/ML can review lengthy claim details within seconds and extract the most important information from multiple sources, including emails and SMSs. AI can then summarise the information and input the data into your insurance claims management system, while checking and ascertaining data accuracy. Using this technology in insurance minimises human errors in claim validation, calculations and processing, leading to more accurate payouts. It can also help customers track the status of their claims effortlessly.
Detecting and Preventing Fraud
The ability of AI to analyse claim data to identify patterns and flag anomalies or inconsistencies in these patterns that human employees might miss. In fact, AI systems can continuously monitor claims in real time, flagging suspicious activities and potential fraud cases for further investigation before they can harm your organisation or its customers. AI can also analyse images and documents related to a claim to detect manipulated images or other factors that might raise suspicion.
Enhanced Customer Experience
AI-powered chatbots and virtual assistants can help customers manage their policies and claims online, providing 24/7 support and quick responses. This feeds right into today’s customer’s preference for self-service facilities. The ability to analyse customer data quickly also empowers both chatbots and human agents to provide personalised recommendations for claims and coverage options. Plus, as mentioned earlier, AI can expedite the claims process, leading to quicker claim assessments and resolutions, and improved customer satisfaction.
67% of customers prefer self-service to speaking with a company representative, says a Zendesk survey.
Source: Zendesk
Cost Reduction
Automating repetitive tasks and reducing manual workload can lead to significant cost savings for insurers. Also, AI-powered fraud detection systems can insulate insurance claims processing against unnecessary payouts for fraudulent claims. Plus, the technology helps insurance providers allocate resources more efficiently, ensuring that they are focused on the most important tasks. Another way in which AI in insurance can help providers benefit from cost savings is through predictive analytics. By analysing the vast quantities of data available to them, insurers can make data-driven strategic decisions that will not just keep them a step ahead of the competition but also help define their growth roadmap.
Ai in Insurance Claims: Fulfilling the Promise of Insurance
Close to 90% of customers say that claims processing efficiency influences their loyalty to an insurance provider.
Source: Forbes
Claims processing lies at the very core of the insurance sector. It represents the entire premise of policyholders when they invest in a policy. This makes it vital for insurance providers to offer efficient and accurate claims processing that satisfies customers and builds loyalty. AI presents an unmissable opportunity for insurance providers to transform their claims processing and management to benefit from efficiency gains, cost savings and improved customer experience. The key to reaping all these benefits is to choose a trusted insurtech provider with proven solutions and industry-leading support.
Bibliography (Last accessed – February 28, 2025)
