Many insurers would like to achieve some form of straight-through processing (STP), in which a claims process is fully automated. Furthermore, by linking together several automated claims processes, insurers can enable end-to-end, no-touch claim handling: a process in which no person has to manually touch the claim. Both no-touch claim handling and STP are enabled by claims analytics.

Automated claim handling

For insurers, STP offers the promise of faster, more transparent claims processing for low-risk claims. Of course, that begs the question: what’s a low-risk claim? It’s one that is generally handled by the right adjuster and resolved within an acceptable length of time. Each insurer will have its own criteria for what constitutes low risk.

For example, an insurer might segment claims filed by long-time customers with multiple products who have only filed low-risk claims. They can identify these claims by referencing external and internal sources of data (from other business units, the Internet of Things and public records, for example) and leveraging predictive models (such as driver forecasting or lifetime value projections). Consequently, upon submission, appropriate claims could be routed for STP for faster processing—or ideally, for no-touch processing.

In an age where customer loyalty is an endangered species, a frictionless experience can go a long way toward strengthening the customer relationship and delivering more value. Crucially, STP does not replace the need for human adjusters. Rather, it can remove routine claims from their desks and enable them to focus on more complex, strategic work.

Join me next week as I explain how claims analytics can help insurers better manage high-risk, problematic claims, colloquially known as “claims that explode.”

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