The insurance market is hyper-competitive. To stand out from the competition, your organization needs to meet your customer’s demands: fast response times to inquiries, easy access to critical information and a streamlined user interface.
Unfortunately, that’s easier said than done. Today’s insurance industry is afflicted with slow processes that distress both your customers and your employees.
Let’s explore the shortcomings of the insurance industry’s processes and how digital transformation in insurance forges a path towards more efficiency and productivity.
The Problems with Insurance Processes Today
Companies that fail to adapt to digitalization and technological advances will struggle to survive. Here are four significant problems insurance carriers and agencies face as they struggle to transition.
1. Slow Filing Processes
The current processes for filing insurance claims are slow and laborious. Between ever-changing compliance regulations and the growing quantity of physical documents that need to be processed, manual document management can only move at a snail’s pace.
2. High Customer Expectations
Today’s customers expect to get what they need when they need it. But when faced with the slow processes of the insurance industry, they are almost guaranteed to end up dissatisfied.
This pattern has led more insurance carriers and agencies to adopt tools and systems that ease the strain of these customer relationships. But doing so reveals new risks—if carriers choose the wrong tools, they may add even more strain to their processes.
3. Privacy Concerns
Data breaches in the United States have significantly increased within the last decade. As such, there is a growing concern among customers about securing their data. They want to be sure the data they share for insurance claims, including their financial and personal information, is locked tight in a digital vault. Therefore, insurance carriers and agencies must invest in high-performing security systems to attract new customers and keep those they have.
4. The Ever-Changing Socio-Political and Economic Landscape
The insurance industry is, unfortunately, intertwined with the tumultuous changes of government. For example, revisions in who is eligible for Medicare and Medicaid benefits can drastically affect an insurance carrier’s client pool. Fortunately, offering innovative insurance solutions may help keep their clients and agents around, regardless of the socio-political or economic landscape.
5. Human Error
Monotonous and mundane tasks are ripe opportunities for human error. But when it comes to collecting insurance information, human error can lead to the improper care of your clients, causing them to seek other insurance carriers.
What’s the Solution?
Insurance carriers must adapt to combat the challenges facing them and there is a rather large and complex ecosystem of technologies that can be leveraged to digitally transform the processes described above. One key technology in this ecosystem is Intelligent Document Processing (IDP). IDP automates document processing from ingestion to data output into other business systems and enables insurance digital transformation far beyond document automation as it turns unstructured into actionable data.
What Does Digital Transformation Mean for Insurance?
Digital transformation in insurance means adopting and integrating technology and software to make insurance services more efficient. For example, an impactful digital transformation initiative that insurance providers can implement relatively easily is streamlining their document processing practices to deliver the speed and efficiency their clients crave.
Digital transformation is moving at an accelerated pace in the insurance industry. Here are just a few processes that carriers and agencies are already using to improve through digital transformation:
- Claims processing
- Policy qualification
- Account opening
- Payments
- Customer engagement
- Onboarding new businesses
- Underwriting
- Creating contracts
- Communicating with customers
- Invoice processing
Insurance Digital Transformation Technologies
How do carriers improve in these areas? With the right tools.
Here are three tools insurance organizations implement to streamline the above processes:
1. Intelligent Document Processing (IDP)
Intelligent document processing is an AI-powered software solution that automatically extracts information from electronic or physical documents and sends it to other business systems such as ERP, RPA, BPM, ECM and others enabling end-to-end automation. This process usually involves six fully automated steps with human controls built-in for exception handling:
- Ingestion: Onboarding electronic and physical documents through scanners or other devices
- Image Processing: Document normalization, image clean-up and rotation
- Classifying: Using keywords and content-based classifications to sort documents
- Extracting: Taking data from documents to create key-values
- Validating: Validating and approving data taken from the documents
- Delivering: Delivering data to business systems
Intelligent document capture is an essential part of digital transformation in the insurance industry. With it, insurance providers can rely on structured, highly accurate data accessible within minutes after document ingestion in their business systems of choice.
This technology is also vital for maintaining proper security and data compliance. With continual updates and new regulations to protect privacy and maintain security, insurance companies need a way to ensure compliance as they start any digital transformation initiative. This holds true for Payment Card Industry Data Security Standard (PCI DSS), Personally Identifiable Information (PII) data compliance, which must be met to support GDPR and privacy laws. Insurance companies must have a way to train the system to find sensitive information and then have the ability to redact it to prevent data leakage or loss of sensitive data. When documents are digitally secured, they are much harder to lose or allow to slip into the wrong hands. To meet privacy and security frameworks, an IDP solution can overcome these obstacles to improve compliance.
2. Artificial Intelligence
Self-service solutions are on the rise, and AI is what makes that possible. If you have a customer-facing application or website, AI makes those interfaces tolerable for customers. For example, AI helps personalize the experience and speed up the process of settling insurance claims.
3. Big Data and Analytics Platform
Aside from speed and customer satisfaction, digital transformation in the insurance industry also uses big data to get actionable information about your customers. This type of data offers insights that can be highly valuable to insurance agencies, helping reveal patterns in customer behavior or better understand the trajectory of your company.
When an IDP platform is used with big data, the data will be much more accurate. Without document capture software, employees have to manually input each data point—a process that leaves plenty of room for human error as well as being time-consuming with large amounts of data. Intelligent document capture software accurately extracts the right information, thus building confidence in your data.
What Are the Challenges with Digitalizing the Insurance Industry?
Insurance’s digital transformation process can be complicated. Common challenges include:
- Managing data: Just because carriers and agencies can now access a wealth of data does not mean they have the resources to properly analyze it. Many companies can feel overwhelmed with all the data they can access and may not be able to efficiently or effectively capture meaningful insights.
- Cyberattacks: While many digital transformation solutions also include air-tight cybersecurity, data breaches are always a possibility. And when data leaks, the carrier’s reputation can be severely damaged.
- Phasing out old processes: The transition to new digital solutions may cause growing pains. Employees will need to unlearn the old way of doing things and readily adopt the new technology, which may take longer than management would like.
How You Can Prepare for the Future of the Insurance Industry
Numerous trends, including the rise of insurtech (insurance technology) ventures and an increased focus on giving a more personalized experience, could shape the future of digital transformation in insurance. But if you want to start preparing for those changes, you must first adopt proven transformation techniques, including intelligent document capture technology.
Ephesoft’s intelligent document processing solution helps insurers get their work done faster and meet their customers’ high expectations. Schedule a demo today to see how your insurance agency can streamline its processes. You can also learn more on our insurance industry webpage and read customer success stories.