How AI and automation can make insurance more humane

As a financial instrument, insurance is a hedge against bad times – something to soften the blow. No one looks forward to making a claim. We only call insurers or third-party administrators in stressful times, and these conversations only tend to add to the stress with multiple follow-ups and prolonged wait times until claims are adjudicated, processed, and settled. Insurance loses some of its promised luster – that of a hedge against bad times.

We witnessed something similar in the aftermath of the recent triple-train tragedy at Balasore, which impacted hundreds in its wake. Imagine how difficult claiming life insurance would be for the bereaved families when the authorities were still trying to identify the dead. A few insurers leveraged technology to expedite the claims disbursement process for these passengers. Using optical character recognition, they matched published passenger lists with existing policyholders and leveraged artificial intelligence (AI) to verify policy details. Then, with robotic process automation (RPA), they expedited claims, ensuring minimal contact with the deceased’s family.

Although industry veterans still vouch for the human-in-the-loop model, where critical go-ahead decisions rest with human agents while automation and AI do the rote work, exceptional circumstances call for a deeper technology penetration to process mass claims. In these circumstances, technology penetration is not about elevating the customer experience. Instead, it is about alleviating stress and being empathetic and humane.

Insurers typically need help processing large varieties, quantities, and volumes of unstructured data from customer calls to contact centers, e-mails, scanned images, and documents. Since processing is done in legacy systems, all of this must be manually updated and verified, at times, with physical visits. This piles up operational costs and delays, adding to customer dissatisfaction, while insurers scramble to meet expectations on customer, governance, and regulatory fronts.

To continue its appeal as a hedge against bad times, insurance must leverage technology to accelerate the claim settlement process with high levels of accuracy. We know US-based claims management providers have used drones to remotely surveil areas affected by natural calamities such as floods or hurricanes. This substituted for physical visits, resulting in faster claim settlement. Similarly, many agriculture insurance companies are leveraging technology to quickly assess the damage in case of floods in a wide area and process the claims as soon as possible, supporting the impacted farmers.

In the insurance projects we drive at Persistent, simple no-code/low-code integrations with business processes have improved operational efficiency significantly. What used to take 12 days earlier now takes just two days. Embedding AI, Natural Language Processing, and RPA can enable up to 80% straight-through processing, reducing contact center costs by as much as 60%, with zero manual errors and unprecedented accuracy.

But this is not an overnight wonder. This is a strategic call that insurers need to make today so that they can see long-term business returns. Especially for a heavily regulated industry such as insurance, digital modernization is particularly challenging. Operating for years on legacy systems with encoded best practices, business rules, and regulatory guardrails, insurers are naturally apprehensive about stirring things up. Persistent has helped several insurers cross the digital divide with our digital service offerings that modernize the insurance stack from the bottom up.

It’s only a matter of time before insurers realize digitization and technology-driven operations are ways to stay relevant. And they only enhance the humane quotient. Let’s talk and find out how we can work this out together.

Insurance Specialty Services | Persistent Systems