Truly transformative claims begin with unified data

The claims life-cycle has evolved to judiciously navigate both the meritorious and fraudulent, delivering on the promise of the insurance contract — originally through paper and now electronically — to the benefit of the millions who rely on it to cover their business and personal losses.

The insurtech movement has accelerated the transformation of claims processes through the introduction of advancements such as cloud computing, automation and AI. A 2024 study commissioned by Origami Risk polled 75 P&C insurance executives about their top priorities over the coming 18 months. It revealed that transformation trends are driving toward faster, more personalized claims experiences largely based on leveraging such technology.

Despite the advances that have been made, insurance carriers have the daunting task of making sure that positive outcomes in one area aren’t accompanied by negative outcomes in elsewhere. For example, digital transformation, with its expanded capabilities and promise of faster cycle times, comes with the added pressure of ensuring strict security and privacy standards are met.

Both insurers and policyholders must adapt to harness the possibilities that technology offers. For example, in the trade-off for policy discounts and faster claims processing, customers face concerns about whether to allow data from connected devices, automobiles and behaviors to be shared; insurers owe it to policyholders and stakeholders to be ever more vigilant of the nefarious uses of AI to commit fraud.

Just as innovators have solved problems in the past, consumers and their insurers will adapt to advancing technology; likely with the help of yet another wave of advancements used to close loopholes and empower users, even as they too simultaneously instigate new challenges.

Ensuring viable, long-lasting claims operations that support insurance expansion means looking to the future when planning for infrastructure and technology investments. It is difficult to anticipate the specific stack that will emerge as part of insurtech 2.0, 3.0 or beyond. However, one method insurers can use to position their organizations to adapt and capitalize on future developments, involves choosing stable, flexible core platforms that harness critical data.

The typical claim life-cycle illustrates where a configurable core platform coupled with AI, automation and data can result in better efficiency and outcomes than any one tech tool on its own.

Intake

A flexible core platform with the capacity to serve as either the system of record or as the primary claims platform, expands possibilities to capitalize on novel FNOL processes by integrating with front-end interfaces or building out customizations to fulfill a host of possibilities.

Through coordinated core platforms, automated actions can intelligently populate critical fields, verify coverage, identify red flags, triage the claim, and trigger remediation services to be coordinated from the moment a claim is reported — using configuration instead of coding.

Reserving

The ability to integrate is key to leveraging patterns and predictions to more accurately pinpoint reserving. Insightful data on the trajectory of claim outcomes can be based on the vast data sets from AI providers, or they can be more narrow and highly personalized based on an insurer’s individual book of business. Cloud platforms with deep integrations across the value chain, help combine data in ways that help uncover hidden reserving opportunities or connect dots that otherwise go unseen, resulting in more accuracy and the ability to adjust quickly as claim details unfold.

Assignment

In the past, a core platform only needed to be capable of routing incoming claims to their assigned adjuster based on systematic round-robin rules. The platform required for the claim workloads of tomorrow must go well beyond. For example, intelligent routing should consider adjuster experience, claim severity, anticipated outcome, out-of-office periods, workload balance, and capacity in calculations of assignment.

Investigation and evaluation

Some claims can be handled in short order, while others require months, if not years, to fully adjudicate due to the complexities and coordination involved. Technology advances used to decipher and interpret mountains of documentation of legal and medical records can help. Where filtering through this information typically requires vast amounts of time and attention, AI can quickly sum up salient points to populate tasks, alerts, communications and recommendations — if properly mapped out in a core platform with these capabilities.

Settlement

The recent pace of change in claims has been particularly pronounced in the payment stage. Fueled by COVID-related social distancing requirements and remote work, insurers have moved payment processes to digital channels to realize lower administration costs, faster settlement, and more satisfied claimants. Expect the next generation of claim settlements to more intelligently facilitate STP, and identify opportunities for opportunistic routing toward final settlement more efficiently.

Data is king

While nascent insurtech plays a role in the futuristic state of efficient loss handling, the common thread running through each step of the claims life-cycle is more fundamental than that of hyped technology; it’s data. This deep trove of information is the lifeblood that powers the algorithms to make truly meaningful recommendations possible. Yet despite making those first investments in their digital path decades ago, some still struggle to continue that evolution and define a strategy to fully unify the disparate data silos that impede progress toward lower adjudication costs and more satisfied policyholders.

We’re not at square one. Yesterday’s legacy core technology investments centered around data digitization, a necessary step in the transformation process. But the latest wave of transformation refocuses the effort to unify data under modern platforms for more flexibility in the context of an intelligent claims journey.

Without a next gen transformation strategy that puts data to better use, AI will remain elusive if not impossible for insurance organizations. There are a myriad of cloud options available on the market today. But a multi-tenant SaaS approach puts the reality of AI in reach of more than just the largest tier carriers with associated benefits of not shouldering the development costs alone, bespoke configurability, and continuous seamless updates.

Realizing the vision of a faster, more efficient claims process requires deep data wells, interconnected ecosystems, and a core platform flexible enough to put the strategy into action. The ultimate result? Continuing the critical tradition of expertly delivering on the promise of insurance to policyholders who depend on technology and people to work in tandem for exceptional results.

Ryan Cantor is chief product and technology officer at Origami Risk, a provider of policy, billing and claims core SaaS technology for P&C insurers, MGAs, TPAs and pools. This article is published with permission from the author and may not be reproduced; opinions expressed here are the author's own.

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