I recently had the opportunity to moderate a discussion about claims innovation with a group of insurer IT leaders during Novarica’s Research Council Meeting at InsureTech Connect in Las Vegas. Though still in the early stages of adoption, several insurers are exploring emerging technologies like drones and artificial intelligence to streamline claims processes and surface new insights. These technologies are producing tangible benefits across several areas:
FNOL
First notice of loss is a common focus area for carriers when considering claims innovation, and digital FNOL tools may even be accessible in some insurer core systems. As an example, one carrier is in the process of rolling out digital FNOL for all lines along with texting with claimants. Another insurer is going one step further, licensing its claims platform to offer its FNOL technology (along with fraud detection and automation) to other insurers.
Loss Control
Drones are becoming more commonly deployed for inspections and surveying remote locations. One insurer deployed drones for its crop business, and another used drones to inspect property in hard-to-reach areas post-catastrophe. Carriers are also applying analytics and natural language processing to claims notes to determine loss potential. One carrier is currently undergoing a POC using analytics to evaluate the propensity for litigation among certain medical providers. Another is exploring unstructured claims note analysis as a safeguard against litigation related to general liability policies.
Fraud Monitoring
Beyond loss control, unstructured claims data analysis also has potential value in fraud detection and monitoring. Pattern recognition in claims notes can lead to insights around vendors that are overcharging for repairs, as an example. Another insurer applied analytics to an image to determine workers’ compensation claims fraud. A challenge with working with claims notes and unstructured images is PII and related state privacy regulations. Algorithms should be fine-tuned to be state-sensitive to PII, especially as there are over 52 definitions in the United States. The legality of social media scans and drone-based image capture introduce further complexity, and awareness of regulations is critical.
The effectiveness of innovations in part depends on a clear use case and business objective being addressed, regardless of approach or where insurers are in their respective claims’ journeys. It’s also important to note that some sources of innovation may not require reinventing the wheel. Claims notes, for example, hold vast stores of untapped information, and have been collected for decades by carriers.
Novarica’s recent briefs on loss control and claims fraud analytics provide an overview of ways in which insurers apply emerging technologies and methods to claims processes. For more information on our innovation research and advisory services for insurers, contact us at [email protected].
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