The insurance business has benefited greatly from insurance claim automation, which has streamlined procedures and reduced human labor. Nonetheless, while employing claim automation technologies, insurance firms frequently commit a few simple errors. To guarantee that the automation project is effective and provides the anticipated benefits, avoiding these blunders is essential. This article offers advice for a seamless installation and covers some of the most important blunders to avoid when utilizing insurance claim automation. Insurance companies may use automation technology successfully and avoid problems by planning ahead and being aware of potential dangers.
1. Not Defining Clear Objectives
Setting specific goals for an insurance claim automation project is essential since it gives the whole thing purpose and emphasis. But a lot of insurance firms don’t do this correctly. Without knowing the precise issues they want to resolve or the important KPIs they want to raise, they jump headfirst into automation. This causes the endeavor as a whole to become unfocused. Organizations won’t know exactly what they are attempting to accomplish with automation if their objectives are unclear. This makes it challenging to compile appropriate specifications for the solution, choose the best vendor, set aside precise funds, and design a workable implementation schedule.
Measuring the success or failure of the automated system that has been put in place also becomes difficult. For the performance following implementation to be compared to, organizations require specific goals. Quantifiable targets are provided by goals like cutting overhead expenses by 30% annually or lowering claim response time by 50% in six months. Regular evaluations of important indicators can assist in ascertaining if the automation system is meeting the goals and providing the anticipated advantages. For instance, the solution has to be improved if the target was to process 50% of claims at zero-touch by three months, but after six months, only 30% are touchless. Without establishing precise numerical or time-based objectives up front, such evaluations are not feasible.
2. Not Involving Stakeholders
Another common error is not involving all relevant stakeholders in the planning and implementation process. Claim automation often impacts underwriters, assessors, customer service executives and other operational teams. But their inputs are rarely considered while selecting and configuring the automation solution.
This leads to lack of buy-in and challenges during rollout. Teams may find the new system complex to use or not tailored to their needs. It is crucial to engage all stakeholder teams from the beginning to understand their pain points and workflow. Their feedback must be incorporated into requirements. Change management activities are also needed to prepare teams for the transition.
3. Rushing Implementation
Insurance firms often rush the implementation timeline to launch automation quickly. But a hurried implementation without proper testing and training almost always results in issues. Rushing leads to incomplete requirements gathering, inadequate configuration and integration, and lack of user preparedness.
It is better to take more time in the planning phase and have a realistic timeline for rollout. Allow sufficient time for user acceptance testing, training, parallel runs and go-live preparation. A delayed but smooth launch is preferable to an early troubled one which may fail to deliver expected outcomes. Proper piloting of the system is also recommended before company-wide rollout.
4. Not Integrating with Legacy Systems
Many insurance firms overlook the need for seamless integration of the new automation system with their existing legacy applications. This leads to data duplication, manual re-entry of information and lack of a single source of truth.
Proper API integration is needed between the new claim automation platform and other internal systems like policy administration, underwriting, billing and CRM. This helps avoid duplication of efforts. Real-time sharing of policy details, customer profiles and claims history ensures assessors have access to complete information on a single screen.
5. Focusing only on Front-end Automation
Insurance companies often view automation as only front-end processes like claims intake and assessment. But to fully leverage benefits, back-end activities like settlement, subrogation and analytics must also be included.
Siloed front-end automation may speed up initial claim handling. But inefficiencies remain in other stages impacting overall turnaround times and operational costs. A holistic view covering the entire claim lifecycle from first notice of loss to closure is needed. All relevant processes must be identified and automated as part of an end-to-end solution.
6. Not Measuring Key Metrics
In the excitement to go live with automation, insurance firms often forget to establish baseline metrics to measure post-implementation performance. Without baseline numbers, it is impossible to quantify actual benefits delivered by the new system.
Key metrics like average claim turnaround time, number of touch-less claims, staff productivity levels and customer satisfaction scores must be tracked both before and after automation go-live. This data helps assess return on investment and identify areas for further improvement. Periodic audits against objectives are also needed to course-correct if needed.
7. Not Planning for Change Management
Insurance employees are often resistant to changes in their day-to-day work brought about by new technologies. But change management does not receive due importance during automation planning.
It is important to prepare teams for the transition and address their concerns through effective communication and training programs. Workshops help employees understand how automation simplifies tasks and improves efficiency. Change agents within teams can also help address day-to-day queries and issues. This ensures employees are on board to leverage the new system optimally.
8. Not Budgeting for Maintenance
Insurance firms tend to focus only on initial automation costs while overlooking long-term maintenance expenses. Software requires regular upgrades, configuration changes and bug fixes to address evolving business needs.
A support and maintenance budget must be allocated for the lifespan of the automation project, which is typically 5-7 years. This covers vendor support, upgrades to new versions, integration with other systems and scaling to handle growing volumes. Failure to do so may result in a partially optimized or outdated system over time.
Conclusion
An insurance claim automation is an important lever to enhance efficiency, reduce costs and improve customer experience. But its success depends on avoiding common pitfalls during planning and implementation. With proper objective-setting, stakeholder involvement, change management and post-go-live tracking, insurance firms can ensure automation delivers sustainable benefits as envisaged. Following best practices helps maximize returns on technology investments.
