Businesses in just about every industry today are tasked to boost their efficiency. This isn’t only for growth—it’s necessary even to just remain competitive in their respective fields. This is true for all businesses, and these include insurance companies as well.
But insurance companies can use the same tools that other businesses are using to boost efficiency, and these are the RPA (Robotic Process Automation) tools that have become increasingly popular across the board. Coupled with the judicious use of AI (artificial intelligence), RPA can help drive growth for the entire insurance industry. Or at least, for the insurance companies that use these digital tools.
The fact of the matter is that RPA with AI can be used in many ways in the insurance industry. And one of these ways is in claims management. Claims management is actually one of the more crucial parts of the insurance business, but somehow, plenty of insurance companies still overlook this department regarding the use of automation.
The Risks of Under-Managed Claims
According to a 2022 analysis from the Kaiser Family Foundation, claim denial rates varied significantly among Healthcare.gov insurers. Some claim denial rates were as low as 1% which means that just about every claim was paid out. But others were as high as 80%, meaning that only 1 out of 5 claims were duly paid.
Both extremes are problematic. When just about all claims are paid out, it’s a situation with plenty of potential for fraud and abuse. And when it seems like almost all claims are denied, then it earns the insurance company a truly unfavorable reputation.
According to the analysis, many of the claims were denied simply because of claims administrative or paperwork errors. But such errors can be avoided with the use of automation. Numerous factors come into play that results in these errors, but the following factors are commonly cited.
- Manual claims processes. Plenty of insurance companies still process the claims by hand, using people to do the manual work. This practice naturally leads to mistakes and delays.
- Lack of data visibility. It’s very common for claims managers to use up a lot of time and effort searching different systems to find the information they need. This takes up a lot of time and often leads to a lot of mistakes.
- Lack of standardization. Simply put, each insurance company tends to have its own way of running its claims management process. But this just leads to inefficiencies and inconsistencies.
Using Automation for Claim Management
Here are some specific ways that an insurance company can use RPA and AI:
Automation for Repetitive, Low-Value Tasks
Instead of using human employees for these tasks, insurance companies can use claims processing software to gather and verify customer information. This allows the company to set their human workplace for other tasks more suited for their abilities. This is great for morale, as workers won’t think that they’re simply robots for the company to use. They can do tasks that they actually enjoy doing instead, as the tasks they can do better match their skills.
In addition, the RPA bots can do a better job with these tedious, repetitive tasks. Automation is more efficient and more accurate, resulting in shorter processing times, fewer mistakes, and reduced costs.
Gathering Data for Better Decision-Making
Claims adjusters can make better decisions regarding claim payouts, simply with the proper data on hand. Should they pay out a claim, or issue a denial? The right data can offer the correct answer, and automation can get that data.
Insurance companies can use automation to collect data that give a more accurate picture of historical claims patterns. As a result, they can create more accurate predictive models to help with identifying likely cases of fraud and abuse. A claim that’s outside the usual pattern can be flagged for closer scrutiny so that it can be investigated more accurately.
Enhanced Customer Service
Customer satisfaction is one of the main goals of any business, and it’s true with insurance companies as well. A business isn’t as likely to succeed if too many of its customers aren’t satisfied with the customer service.
And automation can lead to better customer service. The company can use the right claims management software that allows customers to submit claims more easily and track their status. Too many customers bemoan the current difficulties in submitting claims, and this software can alleviate the concerns of these customers. Also, customers can track their status so they can at least know that they’re not being ignored.
Execute Fraud Detection Measures
It’s not a secret that the entire insurance industry loses billions of dollars each year due to fraudulent claims. However, today insurance companies can use automated fraud detection systems to help with the identification of suspicious claims activities, and these activities can be flagged for closer scrutiny. The losses to these fraudulent claims can be reduced once the suspicious claims activities are identified more efficiently.
Claim processing can be automated to minimize the need for human (manual) input, and that can subsequently reduce the number of errors in the process. Furthermore, data-driven decision-making enables claims adjusters to come up with proper payout decisions, reducing the resulting losses.
The Bottom Line
In the end, using RPA and AI for claims management is a win-win scenario for both the insurance company and its customers. There’s simply no good reason why an insurance company can’t start using automation for its claim management immediately.