Reduce Claims Administration
Cost for Insurers
25th July 2021
When it comes to an insurance policy's life span, one of the largest costs for an insurance company is the administration of claims. This will includes the four stages of the claims process.
1. First Notification of Loss
2. Claim Management (Follow up with claimant etc..)
In addition, with the increased transition to micronization or subscription models, the premium levels for products will gradually decrease. Creating more challenges for insurance companies to support costly claims processes.
From a policyholder's perspective, claims is where they feel the most friction with their insurance company. This is mainly segmented into three parts.
1. Notifying the insurance company of a loss
2. Managing the toing and froing of documentation (sometimes by post....)
3. Providing payments details and waiting to be paid
With the emergence of the digital age and technology such as Artificial Intelligence, Blockchain Big Data etc.. Insurers can reduce their claims administration cost in regards to management time and financial cost.
This can be done by utilising new technology to provide two main advantages:
1. Increase customer service & value *
2. Reduce claims administration cost *
3. Improve claims handling efficiency *
*Source: McKinsey & Company. Claims in the digital age: How insurers can get started. April 2018