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Efficient management of business processes with available resources is a major challenge for many businesses today. Insurance enterprises that rely heavily on paper based systems have been struggling with data processing, primarily because most of the data is unstructured and available across formats – online portals, PDFs, scanned documents or physical documents. Being able to classify the data collated, extract data, and sort the data based on its functionality continues to remain a challenge as it relies on manual intervention. This in turn leads to complex workflows, delayed processing times, high costs, increased errors and frauds.
The one area in the business of insurance that is most crucial is “Claims”, which is also the biggest pain point for the company. When it comes to filing insurance claims, the process is slow, cumbersome and quite painful, for both customers and insurers. Claims processing involves high volumes of document processing, dealing with constantly changing regulations and growing customer expectations. If insurers hope to redefine this entire process, it can be achieved by accelerating the process, optimising operational costs, and offering high levels of customer satisfaction. To keep up with growing pressures of the market and customer demands, enterprises should adopt modernisation and innovation.
Intelligent Document Processing is a system that can ease this process, and help insurers address all the challenges. In this post, we look at how IDP can redefine the way travel insurance claims are processed.
Travel Insurance Claims Scenario
When planning a holiday, it is always wise to purchase travel insurance as it provides additional protection if the trip doesn’t go as planned. This is quite essential especially if you are travelling alone, and find yourself stranded with no way back home, or dealing with a mishap.
Unlike other forms of insurance, travel insurance is for a shorter period of time, and comes into consideration only when someone is making plans to travel – business or personal. Therefore, when a claim is submitted, the policyholder and insurer aspire to close out the claim settlement seamlessly and without any delays.
Claim Initiation: The first step is when the policyholder fills out a claim form [hard copy or online version] to initiate the claim settlement process.
Document Submissions: If it is an international travel based insurance, the policyholder needs to provide supporting documents – tickets, flight information and Identification proof as well. He might also be required to submit a copy of their passport. The most important document would be the travel insurance policy they had purchased at the time of planning the trip. This document needs to have the policyholder’s details – policy number, policy details and other relevant information to verify the policy coverage.
Exception Handling: In case the policyholder had to cancel the trip owing to medical reasons, they need to provide the doctor’s statement stating the issue/condition that prevents them from flying. If in case of baggage loss/delay, the customer needs to offer correspondence from the airlines or airport authorities verifying the same.
Claim Settlement and Payment: Now that the policyholder has spent time providing all necessary documents, the insurer begins their process of verifying the documents, authenticating the claim and ensuring there is no fraudulent activity. Once clearance is received, the customer receives updates on the final settlement and the payment is made.
The claims process is quite detailed and takes weeks, sometimes longer to process [depending on the complexity of the situation, and the document provided]. But this could leave the customer frustrated by the time settlement is made, therefore this function needs a solution that will speed up the process and make it seamless.
During COVID-19 pandemic, people have shifted their priorities and insurance has moved up on the list but travel insurance is not on their priority list. That said, the claims process across all types of insurance needs to be redefined to offer better customer satisfaction and to boost business growth as well.
Having understood the demands of the market and customers, insurers have initiated the process of integrating automation into claims processing and observing the visible increase in efficiency and accuracy along with speeding up the entire claims handling process. To understand how IDP can transform this entire business workflow and the customer journey, read on.
Smart capture: In this case of flight delay, if the delay exceeds a certain period of time, the customer can scan their boarding pass, ticket, front & last pages on their passport along with other relevant documents and upload them through the mobile app or a web link provided by the insurance company customer care to initiate the claim.
Recognition: The Artificial Intelligence service automatically recognizes the type and intent of documents uploaded by the customer and automatically notifies the customer on any missing documents before proceeding to the next stage.
Classification & Indexing: The documents are classified and categorized based on type – passport or driver’s license, boarding pass, airline correspondence and so on. During the classification process, the scanned documents are analysed and mapped against a predefined template within the system. For example, in case there are two document templates A and B predefined in the system, during the classification stage, the system will read the document provided and identify which template it belongs to – Template A or B.
Extraction: The next stage is where the solution intelligently captures entities or ROIs (Regions Of Interest) and extracts all data. Using an OCR engine to digitise the documents and built-in pre-trained modules, the solution extracts specific and relevant data points from the documents – passport number, travel destination, flight timings and details, policy number, claimed amount, etc.
Validation: The data extracted is first compared against the information filled in the application form to show the verification status and further goes through a series of complex validation rules and AI-driven business-rules engine to eliminate the possibility of a fraudulent claim and prevent claims leakage. An automated service checks the airline website to determine whether the flight was actually delayed or not.
Verification: Based on the confidence threshold limit set by the user, if there is a discrepancy, those areas are flagged by the system. A Business Process Management process is triggered to notify the policyholder for further investigation and review. The policyholder receives a notification with a request to provide additional documents for verification.
Integration: Once the necessary documents are uploaded and data is thoroughly verified, it is integrated into the claims process and the claim request is forwarded to the finance & accounting department for payment processing. This is the final stage where the customer receives a notification through an email.
While automation will ease the entire travel insurance claim process, one element to keep in mind is that travel claims carry the highest fraud risk.
There are known instances where a claim was made under false pretext, and this leads to loss of money, time and effort for the insurance company. This spans across opportunistic frauds based on fictitious or exaggerated claims, and the growing trend of sophisticated schemes perpetrated by professional fraudsters.
Unfortunately, due to the high-volume, low complexity nature of travel insurance claims, most carriers do not have the resources or the technology to detect and investigate suspected fraudulent claims effectively
Incorporating Intelligent Document Processing into the system would allow insurers to quickly analyze the high volume of information across structured and unstructured data, such as images and scanned documents. Fortunately, this AI driven solution can help insurers detect suspicious activity quickly and accurately.
The one major advantage to digitising claims processing is that modernising core claims systems will help insurers build strategies around risk prevention and mitigation. AI-enabled fraud detection combines analysis, fraud detection, and at the end of the day, offers a streamlined claims process.
Bottomline being, the customers will experience faster claims settlement, and insurers will experience increase in efficiency, and ability to boost sales, and obtain upselling opportunities through better customer engagement.