Automating Insurance Claims Processing with RPA

What comes to your mind when you hear the term ‘Insurance’?

It must be the visual of standing in line for hours or going through loads of paperwork. Well, this was exactly how the insurance sector used to operate until Insurtech took over.

Insurtech refers to the process of incorporating the use of advanced technology into the insurance industry to provide better customer service and improve work efficiency.

According to Grand View Research, The global insurtech market size was valued at USD 2.72 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 48.8% from 2021 to 2028. This rapid growth is the result of the increasing need of digitizing the insurance industry and improving communication with their clients for better and faster outcomes.

Today, we will be learning more about one of the most important technologies of Insurtech, Robotic Process Automation (RPA), and how it is used for automating the insurance claim process.

Let’s dig in.

What is Robotic Process Automation?

Robotic Process Automation is a software technology governed by business logic and structured inputs to automate business processes. RPA tools help in building, deploying, and managing software that interprets human actions. RPA software helps in generating an automatic response to an email and deploys thousands of bots, each programmed to automate jobs in an ERP system.

According to Grand View Research, the global Robotic Process Automation market size was valued at USD 1.57 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 32.8% from 2021 to 2028.

Automating Insurance Claims Processing with RPA

The increasing rate of insurance fraud, unsatisfied customers, and most importantly errors in the insurance claim process was amongst the top factors behind incorporating the use of technology in the insurance sector.

No insurance company can afford to make any errors in claim processing. This is why a growing number of companies are trusting Robotic Process Automation (RPA) to automate the insurance claims process.

Before RPA, insurance companies faced these problems in claim processing:

1. Manual data entry: Claims processing requires much paperwork and data entry. Before RPA, these tasks were performed manually, which made them prone to errors.

2. Time-consuming task: Insurance agents spend around 10% — 25% of their time performing repetitive tasks required for the claim processing.

3. Disparate mediums: The information was processed and collected through a disparate medium which created a lack of accountability and ownership.

4. Data security: Because of using different software for different purposes, it was difficult to secure data and even restore data.

5. Regulation compliance: The software was incapable of updating the latest changes in any law or regulation, which posed a serious challenge for companies to remain compliant when operating in different states and countries.

Benefits of Automating Insurance Claims Processing with RPA

Speeds up the process

Claims processing requires insurance companies to gather a vast amount of information from several sources, creating exhaustive quantities of data.

RPA speeds up this process by integrating all the different claim processing information from multiple sources without any human intervention and bringing a structure into it. This also results in high customer satisfaction.

No room for errors

RPA automates the manually intensive processes like extraction of data, complex error tracking, claim verification, and integration of claim-relevant data sources.

This automation leads to quick, efficient, and precise claims adjudication, that too without any human intervention, leaving no scope for errors.

Higher compliance with laws and regulations

RPA allows the insurance companies to control and monitor every record on an ongoing basis without worrying about errors or missing data.

Furthermore, the RPA bot documents every step of claims processing and updates it according to the latest changes which ensure higher compliance with every law and regulation.

Blockchain Applications for your Insurance Business

The way different businesses operate and interact with each other has drastically changed with the advent of the digital revolution. Over the years, the impact of technology has been profound, not just in terms of making our lives easier, but also in terms of our working pattern, i.e the way an industry carries out the tasks, solves problems, and resolves issues.

Blockchain, in recent years, has played an important role in this digital transformation. Industries like finance and insurance welcomed blockchain with open arms. According to MARKET RESEARCH FUTURE, the global blockchain within the insurance market had a market value of USD 62.53 Million in 2018 and is expected to reach USD 1.42 Billion by 2024, registering a 69.72% CAGR during the forecast period 2019–2024.

What is Blockchain?

Blockchain is a type of database and to have a clear understanding of blockchain, you need to first understand what a database is.

A database is a collection of information that is stored automatically on a computer system. Information or data in databases is usually structured in a table format that allows easier searching and filtering for specific information.

All blockchains are databases but not all databases are blockchains as there is a big difference between the two. A database is for a limited amount of information that is stored and structured in table format while a blockchain is for a large amount of data, stored in block formats.

A blockchain collects information together in groups, also referred to as blocks, that hold these sets of information. These blocks have certain storage capacities when filled, are linked onto the previously filled block, forming a chain of data known as the “Blockchain.” The new information that follows that freshly added block is compiled into a newly formed block that will be automatically added to the chain once filled.

Blockchain for Insurance Business

The insurance industry understands that it must evolve to stay competitive, which means streamlining processes and meeting the demands of digitally savvy customers. The application of blockchain technology can help insurance companies overcome today’s challenges and create transparent operations built on trust and stability. Furthermore, data being the most important resource of the insurance industry needs to be secured and managed at the same time and blockchain does a better job doing so rather than any other databases.

Being amongst the largest operating industries, insurance companies face several challenges on a daily basis, such as complex compliance issues, limited growth in mature markets, fraudulent claims activity, third-party payment transactions, and handling huge amounts of data but this is where blockchain comes to the rescue.

Now let’s understand how to book the above services:

1. Smart Contracts:

Smart contracts powered by blockchain could provide insurers and customers with a means to manage claims in a responsive, transparent, and irrefutable manner. Contacts and claims could be recorded onto a blockchain and validated by the network, ensuring only valid claims are paid. Such as with blockchain applications, an insurance company can reject multiple claims for one accident because the network would know if a claim is made already

Smart contracts would also enforce the claims i.e triggering payments automatically when certain conditions are met and validated.

2. Security:

The application of blockchain technology in insurtech eliminates suspicious and duplicate transactions by logging and keeping track of each transaction. Blockchain’s decentralized digital repository can verify the authenticity of the customer, their policies, and transactions by providing the records, making it difficult for hackers to corrupt or steal files.

3. Big Data:

in this era of connected devices, the need of keeping up with the technology caused a spike in the amount of data insurance companies need to handle and update every day.

With the help of blockchain, insurance businesses can properly manage and share a large amount of data. This data can be viewed by all parties at the same time and is secured with security features like digital fingerprints, thus providing better protection and transparency.

4. Third-party transactions:

Blockchain can handle the increase in third-party transactions and claims made through personal digital devices. It helps reduce administrative costs through automated verification of claims/payments data from third parties. Insurance companies can quickly view past claims transactions registered on blockchain for easy reference. This promotes higher degrees of trust and loyalty between the insurer and customer, enhancing customer satisfaction.

Conclusion

Blockchain is a decisive factor in the digital transformation of the insurance industry, helping it to break free from outdated traditions. The need for innovation in insurance is critical as customers are craving transparency, speed, and cost flexibility and blockchain provides all three. It is designed to deliver on these desires and meet all the participants’ particular expectations.

When there’s little to no chance of fraud, people will trust their insurance agents more. When complex policy claims are processed 10x faster, there’s no room for friction. At the same time, when claim processing is automated, insurers have more possibilities to be flexible with pricing.

With more blockchain-based applications going live and more insurance companies entering into collaborations, maybe it’s time for your company to jump right into it. With the help of leading blockchain development companies like Jellyfish Technologies, you can take advantage of this advanced technology.

Jellyfish Technologies is one of the early adopters of blockchain and over the years has developed good competency in developing blockchain-based solutions. The JFT team is proficient in implementing private blockchains and smart contracts, integrating API to the blockchain, and other custom requirements.

Technology Trends in The Insurance Industry

Technology has become a necessity for the modern era. It plays an important role in every human’s day-to-day life and has taken over every other industry across the globe.

Insurance is amongst the last industries to recognize the importance of technology for their growth. During the panel discussion with Andrew Rose, Christian Riepe, David Stubbs, and Dan Smith, moderated by Startupbootcamp InsurTech MD, Sabine Vanderlinden, it was concluded that “Consumers expectations have evolved quicker than insurance carriers and insurance industries need to continue to break down the process and partner with InsurTechs to sort this out”.

InsurTech refers to the use of technology in the insurance sector, which over the years, has successfully provided an ecosystem that brought adjacent industries together to provide an improved service of greater value to insurers and their customers. Some of the ways in which InsurTech is transforming the insurance industry are:

Artificial Intelligence:

Artificial Intelligence (AI) refers to the process of programming machines to think and act like humans. It allows machines to sense and learn human behavior, and take decisions based on its collected data.

AI has occupied an important place in every other industry across the globe and has become one of the most used insurance software. According to Google Trends, there has been an increasing interest in AI-powered insurance applications from 2012 to 2019. This increase is because of the various benefits this technology provides. Some of them are:

• AI produces a personalized experience for the customer, based on the customer’s behavioral pattern and habits
• AI enables insurers to access the data faster as it cuts out the human element, therefore enhancing the customer experience
• AI takes over the underwriting process, thereby enhancing work efficiency and saving time
• AI improves the turnaround cycle
• AI uses deep learning algorithms and biosensors to identify emerging risks and new opportunities
• AI chatbot can walk a customer through the claim process or policy application, allowing employees to use their time and effort for other complex cases

Blockchain:

Blockchain refers to the system that maintains records of transactions across different computers linked in the peer-to-peer network.

The use of blockchain in the insurance sector has increased much in recent years. According to the PwC report, blockchain offers a $5 billion opportunity for Property & Casualty insurers, thus making this insurance software important for both insurer and the insurance agent.

Given below are some ways in which Blockchain has transformed the insurance sector:

• Blockchain offers high security, thereby ensuring customer’s trust in the insurance company
• Blockchain eliminates manual storage of data, thus assuring an error-free work process and enhancing workflow efficiency
• Blockchain acts as a fraud detector and saves companies from taking risks.
• Blockchain is cheap to operate, thus it helps to save money

Predictive Analysis:

Predictive analysis is the process of understanding and predicting the customer’s behavior. Insurance companies use this technology trend to:

• Predict whether the customer is about to cancel the insurance so that the company could offer more attractive deals
• Predict pricing and risk selection
• Keep up with the latest trends
• Identify fraud risks

Internet of Things:

Internet of things refers to the process of transferring or collecting data on interrelated or inter-connected devices over the internet without human intervention.

According to Forbes, IoT could help insurers to cut the cost of the claims process by 30% and also lower premiums for consumers. Along with this, IoT has developed the insurance sector in these ways:

• IoT uses uploaded data to determine risk and policy rates
• IoT stores and transfers data over the internet, thus saving employees time and effort, leading to efficient workflows
• Wearable IoT devices like Fitbit can be useful for life and health insurance companies as health professionals can use these devices for patient monitoring, diagnostics, and drug delivery. When enabled with analytics, wearables can be used by consumers to manage their health and by insurers and employers to improve wellness

Machine Learning:

Machine Learning is a branch of Artificial Intelligence that focuses on making machines capable of processing data and acting on their own without human supervision.

Machine Learning has contributed to transforming the insurance sector in these ways:

• It automated the claim processing, making it error-free
• It made files accessible via the cloud, thus making it easy to analyze them and improve speed and accuracy
• It can be used for risk management and policy administration

Wrapping up:

The insurance business is amongst the competitive industries, growing almost every day. The competition and growth have made it necessary for the industry to rely on technology for efficiency and accuracy.

Understanding the need of InsurTech, leading companies such as Jellyfish Technologies is providing insurance software development services to some of the major insurance companies across the globe. Insurance providers such as Patra Corp and Heffernan Insurance are leveraging JFT expertise to deliver high-quality solutions to their customers. If you want to take your insurance business to the next level, then reach out to Jellyfish Technologies for the best insurance software development services.

FAQs:

• What all Insurtech services do Jellyfish Technologies provide?

If you are an insurance provider, JFT can help you with mobile app development, web application development, API integration, quality assurance, or any other custom requirement. We work in all the major technologies such as Java, .Net, PHP, NodeJs, Grails, Python, JavaScript, Android, Angular, React, Ionic and ios.

• What is the growth rate of the Insurtech market?

The global insurtech market size was valued at USD 2.72 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of 48.8% from 2021 to 2028.

• What are the goals of InsurTech?

More risk-free life, minimize and prevent risk, innovative technology, high efficiency, operational savings, future preparation for the sector, new products, new start-ups, new investment.

How Machine Learning Is Transforming Insurance Sector?

The Insurance sectors involve an abundance of data to calculate the risks and come up with customized ratings. Since digital transformation has acquired almost every sector, the pressure of increased competition, the elastic marketplace, complicated claims including fraud behaviors and complex regulatory environment has affected the Insurance sectors. Nowadays, insurance industries are undergoing an intelligent digital transformation that helps to keep all their employees synchronized. These employees can be agents, brokers, claim investigators or maybe support teams. To enhance the operational efficiencies, fraud detection and clear proposals towards customers, insurance industries have adopted Machine Learning solutions.

Technology is transforming the traditional way of doing business across companies. Every domain has adopted the technological tools to ease its process and so does the Insurance Companies. With the advances of machine learning tools, they can maintain high-quality human data with ease. The proper training data make sure that machine learning-based solutions perform a higher level of accuracy so that the companies can improve their internal efficiencies more quickly. It eventually benefits the firms with reduced prices, faster turnaround time and better customer experience. Jellyfish Technologies is one of the leading insurance software development companies. We understand the technology, insurance domain, user expectations and have the experience of delivering insurance products. Read more: - https://www.jellyfishtechnologies.com/how-machine-learning-is-transforming-insurance-sector.html