The Covid pandemic accelerated investment in technology in the insurance claims space. Unprecedented claims volumes necessitated process changes such as shifting to more digital interactions, adapting the supporting evidence requirements, and adjusting the claims philosophies. Many companies found these changes beneficial and intend to keep them in place.1
The successful shift toward more digital product offerings, as well as developments in underwriting and data analytics, has initiated thoughts that operational aspects supporting Claims should follow the same path.
There are already pockets of automation in the claims process emerging, but the absence of end-to-end integration means that a customer travelling through the claims space may still experience a disconnect at various points when it reverts to a manual process.
A podcast by McKinsey2 discusses the key shifts we’re likely to see in the claims space in the coming years and references the disparate nature of these “single point solutions”. Literature and anecdotal client research by Gen Re reveals the most prominent of these emerging shifts observed across our market.
This blog reviews some of these shifts, many of which are driven by insurtechs, and the implications of claims automation on training the next generation of claims assessors.
Key digital shifts underway in the claims space where digitalisation is seen include:
Self-service claims submission portals – As more digital products are entering the market, there is an increased need for online submission portals for claimants to be able to interact directly and online with the claim process. Self-service claims submission portals allow claimants to submit documents, file claims, and receive updates on their claim.
Intelligent document processing – There has been a lot of investment in OCR software (optical character recognition). Digital solutions in various markets demonstrate being able to classify documents, data extraction, and data ingestion to populate fields, for example. Digital solutions can also analyse connections between words, which assists with structuring large amounts of data in meaningful ways, thus facilitating efficiency in the assessment process for assessors and reducing claims administration costs.
Machine-driven decisions – Straight through claims processing to claims payment refers to when a trigger, such as a hospital admission or an ICD10 code, is used to make inferences that a claim event has occurred. This approach is especially applicable in markets where products have event-based definitions related to hospitalisation or diagnoses, for example a heart attack for critical illness products. With the aid of machine-driven decisions, in cases like these the claim is then automatically paid out to the insured without requiring any action on their part.
Automated claim assignment – Known as triaging, automated claim assignment assists Claims departments with their inventory management efforts by assigning claims by complexity to the claims assessors based on experience level. Triaging is required to identify which claims are suitable for straight-through processing and which are more complex and should be passed to an experienced assessor.
Claims rules engines – These are said to be one of the main predicted differentiators for a carrier. There are slight variations in what the different rules engines focus on, with some focusing on identifying return-to-work candidates, some measuring degree of occupational disability, and others triaging. Overall, these rules engines promise to enhance resource management, reduce costs of claims administration, and provide transparency and reproducible decision making as well as data analysis.
Claims tools – These provide rule-based guidance to assessors. At Gen Re, we developed the Depression Claims Wizard, which looks at risk factors for mental health conditions and generates recommendations for assessors on how to manage depression claims.
AI Fraud detection – There has been an increased investment in technologies for fraud detection. Some of the primary tools3 being used are automated red flags, predictive modelling, reporting, case management, and data visualisation.
Data-driven rehab – These are activities supported by the addition of value-added services and insurtech intervention tools that are aimed at shifting the focus to wellness promotion, prevention, monitoring, and management. There are apps focusing on various aspects of health including mental health and pain relief. Some insurers have developed partnerships with providers and apps to offer their insureds a value-added and rehabilitative benefit.
Moving Toward the Future
As in the underwriting journey space, the end-to-end digitisation of the claims space is inevitable, and the transformation is underway. The mortality space is likely to feel the impact sooner since the assessment process is frequently a one-off assessment making automation of processes easier.
The morbidity space is more challenging, particularly where income benefits are provided. It is here that trained claims professionals are required to assess a higher degree of subjective data and make judgement calls that bring essential human qualities into play – those of judgement and empathy.
Assessors are required to synopsise after considering the interaction of multiple factors such as unique circumstances of claimants and then to make a call on the validity of the claim. Among the diverse factors they evaluate are medical, occupational, financial, and contractual elements.
Analytic techniques and tools are being built to assist assessors' unique decision-making process.
Skill Sets Required
The inevitable outcome is that claims professionals working in the industry will need to develop skill sets complementary to their traditional professional training.