The Evolution of Claims Processing

By Brett Johnson and Agnes Lau-Fernau

Technology is evolving daily, and consumers want product and service information in real-time, not weeks, days, or even hours.  Many operational leaders are laden with disparate data, limited tools, and budgets to invest.  In addition, the number of potential solutions in the market is vast and confusing, leaving consumers in a quandary on where to start.  Industries are transforming more quickly than ever, and any delays in the flow of information can greatly hinder an organization from reaching their operational goals and limit their ability to serve their clients.  Organizations need to innovate and break away from the simple trends to be successful, following industry trends is not enough. While the insurance industry may not be ready for droids from Star Wars, progressive companies are finding that advanced technologies, like Robotics, is helping them innovate and improve productivity.

Claims Processing in the insurance industry is an area that is ripe for innovation and evolutionary change in the way things are done.  In spite of the world’s ability to leverage advanced technologies, Claims Processing is still a highly manual process that requires hours of human effort and is susceptible to errors.  However, companies are smartly applying technology to improve existing administrative processes.  Leading organizations recognize that the process of adjudicating a claim is like many repetitive, factory transactions that have long been automated through technology.  The partnership of technology and Claims Processing promotes both potential operational and cost efficiencies.

The most recent technological advances in Claims Processing have been revolving around Robotics.  Robotics or Robotics Process Automation (“RPA”) is the automation of a process that contains a set of repeatable, routine tasks.  These processes are often comprised of time-consuming, data entry orientated tasks; by implementing RPA, Organizations can reduce risk and deliver faster, more accurate results.  While these efficiencies are intriguing to many leaders, what does RPA mean in an office environment?  As a very basic example, developing and using a Microsoft Excel macro is a type of RPA.  A macro is an automated input sequence that imitates keystrokes or mouse actions, just like when a robot performs actions that previously were completed by human workers. In the following paragraphs, we will discuss the advantages and operational efficiencies that the use of Robotics can generate for an Insurance Organization’s Claims Processing function.

One of the most common challenges that insurance companies contend with in effective claims processing is dealing with disparate data.  Most organizations store their data in multiple locations, different systems, and potentially even in different formats.  Additionally, many organizations use different vendors for their Claims and Policy Administration solutions which compound the risk of communication barriers and in turn causes the processor to have to search multiple databases to process a claim.  Automated functions such as Robotics, bridged the gap between disparate solutions and pulls data into a central, standardized location.  Designing effective Robotics solutions and processes provides Insurance leaders with ways to develop automated workflows that pull data on a scheduled basis so that recent data is always available and easily accessible.

In today’s world, Claims Processing is still a very manual process.  Full-time resources are pulling information from a source file (either paper or electronic) and keying the data into the appropriate system(s).  By and large, manual processes that can lead to key-in data errors (Human Error) resulting in inaccurate claim information, which in turn can lead to lengthy delays in processing and claim payouts.  Organizations who have embraced the use of RPA to automate existing claims processes have been able to redirect the human effort in their claims processing departments or eliminate the majority of the human effort involved, drastically reducing the risk of human error.  In addition to the reduced human error, the act of keying claims detail into a solution is a time-consuming process.  RPA allows organizations to shift the focus of their trained resources away from monotonous data entry to value-added tasks of claims review and analysis.

Research and experience illustrate that companies using RPA have generated impactful and lasting results including:

  • Transaction Processing Improvements by up to 50%,
  • Standardized Processes,
  • Productivity Benefits Greater Than 60%,
  • Reduction of Manual Effort by Nearly 90%, and
  • Fostering an Environment that Supports Risk-Free Processing of Sensitive Data

Strategic introduction and blending of modern technology to assist a standard process, such as Claims Processing, represents an innovative way for Insurance leaders to drive evolution and generate a substantive return on investment.  Let Mazars help you identify areas of improvement with technology.