Moving towards real-time claims processing

The insurance claims process is the bane of many people’s existence with some companies taking anything from 15 days up to a month, if not longer, to settle. In the fast-paced digital environment, this is an antiquated approach and must change if insurers are to remain competitive, according to Annalie Terblanche, Exergy Product Owner at SilverBridge.

As it stands, claims settlement is cumbersome. Because of its manual nature, the insurer must closely monitor every step of the process to ensure no mistakes are made. Complicating matters is the risk of fraud and some clients lying on their claims, thereby lengthening the process for everyone. For example, the ‘cash for crash’ mindset in Russia a few years back gave rise to dashcams becoming required by law.

According to one local insurer, fraud accounted for one percent of its rejected claims last year. On its own, that might not seem like much, but considering the company paid out almost R4.5 billion in underwritten risk cover, it quickly starts adding up. In fact, the South African Insurance Association says that while local fraud is in line with international trends and statistics, it could amount to as much as 32 percent of all claims submitted in any year.

Insurtech lessons

So, what options are available to insurers?

Given the rapid rise of insurtechs, traditional companies can take a few pages out of their books. Even though the former has the luxury of not being limited by legacy systems, there is a culture of innovation and agility present that is often found lacking in a large organisation. Part of this can be attributed to the pressure on executives to remain competitive while keeping ‘the lights on’.

In a connected environment, it is no longer good enough to provide tailored solutions to customers. Instead, insurers need to be viewed as forward-thinking and embracing of technology that is in use by the mainstream. Mobile apps, online services, machine-learning, the Internet of Things, the list goes on.

Furthermore, customers want to be in control of all aspects of their lives. Online banking, the gamification of medical aid benefits, and being able to tailor insurance solutions for their specific requirements all form part of the process. This has spilled over to the claims processing environment as well.

Self-service

While it might sound counter-intuitive in the wake of the dizzying fraud statistics, putting the process in the hands of the customer is the secret of success for insurtechs. Taking a self-service approach, the customer can, for example, provide video and images from the scene of the accident through a mobile app.

On the back-end, systems automatically review most cases and can even award instant pay-outs. In theory, the money can be with the customer in a matter of hours. The long processing cycles and even the extra time taken to embellish a claim can be removed entirely.

Inevitably, this results in high levels of customer satisfaction and faster turnaround time that could lead to increased profitability and efficiencies. Ultimately, this automatic processing of claims will be the way of the future with no insurer being able to ignore the benefits.