In the highly competitive insurance industry, companies are looking out for new ways to improve efficiency while controlling costs. Robotic process automation (RPA) is one such advanced technology that has shown significant potential in improving the sector’s efficiency and customer focus. Highly compatible with several insurance processes such as claims data entry and processing and handling of applications, RPA bots can transform the working of the industry. While the idea sounds enticing, it is not always clear where to start and identify which processes can be automated. In fact, claims processing stands out as a prime candidate for RPA implementation as it is a primarily multi-step, multi-party, and rule-based process. Partnering with a robotic process automation company can help implement this technology in the area of claims processing and take insurance businesses to the next level.
Insurance claims processing is a multi-step process that can involve several parties including the insurer, the claimant, a broker or agent, and other third parties. RPA technology in insurance claims processing connects disparate applications and works with legacy systems to automate claims processing without causing any specific disruptions. As per reports, one of the biggest benefits of using RPA for claims processing is that it offers about 99.5 percent data accuracy, organizes data and makes it easier to navigate data across different systems. Using RPA insurance claim software offers several benefits such as automatic generation of compliance reports, live audits, dashboard analytics and seamless integration into systems.
Importance of RPA in Claims Processing
There is a growing trend of insurance companies adopting robotic process automation (RPA) technology into day-to-day operations that help accelerate claims filing processes and ensure that regulatory compliances are met while auditing insurance trails. By automating various aspects of the insurance process lifecycle, insurance companies utilize RPA tools to improve customer satisfaction and business efficiency. According to a McKinsey study report, RPA is used by the insurance sector for automating various operational processes and over 25 percent of the industry is expected to use automation workflows for processing claims, underwriting tasks, and other insurance filing activities by 2025. The technology helps employees to focus on more productive tasks and spend less time doing manual data entry work when handling policy documentation.
What Is the Need to Automate Claims?
Typically, the question “which processes to automate” has no single, specific answer. This is because of the fact that there are several internal and external elements that go into selecting which processes to automate. In addition to the huge volume of claims that an insurer processes, there are several reasons that support the need to automate insurance claims:
- Claims Follow a Sequential Process – As claims processing follow a sequential process, automation allows the team to correctly track the progress of the claim. It allows the right person to be managing the process at any point of time allowing seamless integration between the teams.
- Data comes in Different Formats – Initial data from the claimant can come directly from the claimant or from an agent. Regardless of the party or the format, the data needs to be entered into the insurer’s system. Automation makes it possible to open emails or PDFs related to a claim and automatically input the data to the claims platform.
- Claims are Rules-based – Claims processing is based on rules. Instead of an employee manually checking to see if a required document has been received, automation can be set up in such a way that a reminder can be sent if the document has not been received, thereby moving claim processing from one specific stage to another.
Benefits of RPA in Claims Processing
Automated insurance claims processing does not require human intervention and this helps speed up transaction rates. The quality of data is ensured and machine learning algorithms allow the personnel to quickly process and resolve various issues that occur during claims filing. Here are some of the key benefits that RPA offers to insurance businesses:
- Automatic Extraction of Multiple Data Formats – RPA insurance claims technology is used to automatically extract multiple format data from relevant documentation. Data entry professionals face serious challenges when it comes to manually entering data in myriad structures and formats. RPA takes care of this by automatically recognizing visual layouts, labeling data, and entering into claims processing systems.
- Faster Turnaround Times – When it comes to insurance invoice processing, RPA helps in eliminating data redundancy, duplicate entries, and ensures faster turnaround times. Sales teams can perform productive tasks and automate activities such as manual data entry, end-to-end claims processing, and improve customer satisfaction rates by ensuring faster turnaround times for insurance claims applications.
- More Accurate Data – Automation can help avoid errors in data entry, ensuring that the information being relied on to make decisions is accurate from the start.
- Inform Underwriting Decisions – The frequency and value of claims can be automatically matched and added to the customer records, so underwriting has a full picture of the evolution in the risk for each customer.
- Recruit and Retain Clients – RPA technologies can help streamline recruitment processes considerably as these tools make scanning customer profiles easy. It can reduce the risk factor for every company as RPA tools conduct rigorous reviews and audits of insurance applications. This in turn leads to better customer relationship management, improved screenings and assessments, and streamlined administration.
- Process Refunds Quickly – At times, customers want to cancel their claims filings or stop their insurance policies and seek refunds. RPA ensures that customers do not face delays in getting their refunds. The fast pace in which businesses close insurance policies and process customer refunds impacts the overall reputation of the insurance firm.
- Better Customer Communication – Automation helps to generate timely notifications to claimants about the status of their claim and any pending requirements.
Top Use Cases of RPA in Claims Processing
As mentioned above, RPA automation can reduce the number of hours spent per month on processing insurance applications and save time during claims filings. Apart from improving customer communication, RPA tools can help businesses streamline claim filing updates and ensure that policyholders renew their insurances on time. Some of the top use cases of RPA in insurance claims processing include:
- Underwriting Tasks and Pricing Reviews – RPA tools are effectively used by insurance companies to analyze the credit profiles of applications and assess their risk levels for specific claims policies. Underwriting tasks involve collecting data about customers, performing income verification checks, and reviewing track records for making on-time payments. This helps insurance companies provide the best offers to clients and set the right pricing on their insurance policies. As clients are always looking out for the best rates on insurance policies from businesses, RPA tools help in pricing comparisons. The technology tools help in researching the ideal insurance policies for clients as well.
- Streamline Vendor Onboarding – RPA technology can be of great use when it comes to handling multiple vendors. The technology can be effectively utilized for automating transactional processes and mapping claims distributions. Several areas of claims processing such as accounting, tax and regulatory compliance, due settlement, credit risk assessment and analysis, and administrative activities can be automated using RPA.
- Customer Data Management – RPA tools can help users collect, store, sort and organize all kinds of client data thereby making it more easily accessible. The technology can help clients categorize and label data from unstructured sources and deliver meaningful insights through further analysis. With RPA, you can eliminate repetitive tasks involved in claims processing by up to 80 percent.
- Legal and Regulatory Compliance – Being compliant with policies is critical as the insurance industry is governed by stringent laws and regulations. RPA allows users to perform regular audits of their documentation and ensure that the data is accurate and fact-checked.
With the rapidly changing customer needs and heightened competition, insurers face serious challenges related to claims processing. As the industry relies heavily on efficient back-office processes, insurers have started to implement RPA to automate transactional, routine, rule-based operations. RPA in insurance can help achieve higher profit margins, greater compliance, sustainable company growth, and enhanced customer service while lowering costs and minimizing customer abandonment. Top insurance firms have integrated RPA with the assistance of business process outsourcing solutions in all areas of claims processing to achieve higher operational efficiency.