It’s a well-known fact that the race toward digital transformation continues to intensify across all facets of business, and the Insurtech market is not an exception. According to recent statistics, the Insurtech market is expected to garner a whopping $158.99 billion by 2030 at a CAGR of 32.7% during the forecast period of 2021-2030!
What this tells us is that there is a rising trend toward digitalization and automation in the insurance industry worldwide. The driving forces behind this trend include the race toward providing customer-centric services, as well as finding more effective methods for fraud detection. All these factors make Insurtech the go-to solution for much of the rising challenges in the insurance industry.
In this article, we shall shed the light on 3 of the core elements of an Insurance management system. Although we touched upon these three core elements briefly in an article last year, it would be useful to shed the light on them in some more detail here.
So, here we go.
Underwriting Automation
Underwriters play a major role as they assess the level of risk in detail before selling a product to a certain client. As such, it is very important to make their job as smooth and accurate as it can be. And this is where automation can be of great use.
An automated underwriting system enables you to view all the detailed information available about your client, be it their medical history in the case of medical insurance, their car details and/or accident history in the case of vehicle insurance, or anything else. Also, it allows you to design any kind of survey or questionnaire within your product setup, and you can link it to any policy.
Furthermore, it enables you to link all this information, along with your client’s answers, with functions that:
This, in turn, allows you to intelligently adjust your pricing and requirements as needed.
- Indicate whether this client is eligible for buying a certain product in the first place or not.
- In case the client is eligible, they also re-calculate the final premium as per your pre-defined categories.
This, in turn, allows you to intelligently adjust your pricing and requirements as needed.
Empowering Policy Administration
No less than underwriting, policy administration involves a lot of complex, often repetitive tasks. From policyholder profile creation and management to monitoring payment schedules, one can easily feel overwhelmed.
A policy administration software (PAS) system, however, is designed to take all of this off your back. To put it simply, it is a software system designed to handle the various insurance policy functions in an automated and systematic fashion.
Additionally, these systems cover especially important aspects of policy administration.
They give you full control over your clients’ profiles, managing all their information, including contact information, submitted applications, claims & payment history, accumulated sums, and more. With a few simple clicks, the system allows you to create complete profiles for every individual or entity you cover.
From then on, it integrates their information into every other transaction, be it an underwriting process, a quote creation, claim process, or other. Moreover, PAS systems enable insurers to maintain an updatable blacklist to mitigate exposure to potential fraud.
These systems also allow you to set up exact and convenient payment mechanism for your clients ensuring a sleek collection process and an instant policy renewal once payments have been made successfully.
As such, through these capabilities, these systems make policy management easier and more efficient.
Boosting Claims Management Efficiency
Managing customer claims can be a very demanding task. It goes through numerous procedures until claims are fully processed to be approved or rejected. It begins with issuing the claim, which then goes on a long journey of assessment, validation, and settlement based on their alignment with the strict items found in the policy in place. Furthermore, every claim must be reviewed and adjudicated to verify eligibility and prevent fraud.Now, imagine being inundated with a massive number of pending claims all waiting for you to inspect, settle, or deny. Although manual paper-intensive workflows are well behind us now, many of the systems in use nowadays are still not fully automated. In many cases, your staff may still need to go through claim transactions manually to make sure everything is valid and error-free. This, no doubt, can be overwhelming and not as efficient as it should be. Your clients are not supposed to wait too long for your response, and the sooner you give them closure, the better. So, how can you process all these transactions in the least amount of time and effort while ensuring maximum accuracy?
Even with a software system, your staff could end up doing a lot of the work by inspecting claims, verifying them against policies in place and a set of other rules. Moreover, the system needs to be very efficient and able to handle a large volume of claims in a timely fashion.
Furthermore, to minimize human error and have an efficient workflow to process your claims on time, you will need an advanced system that allows you to define your own rules dynamically based on your business rules and regulations.
Well, this is where a cutting-edge claims management system can come to the rescue. These systems are engineered to give you full control over your data and processes, allowing you to handle many transactions in a fraction of the time and effort they used to take. From implementing suitable payment schemes to synchronizing claims data with your reinsurance calculations, a claims management system keeps you on top of all your duties, all the time.
Another key area in claims processing is fraud management. Fraud can be very tricky to detect and prevent. With a state-of-the-art claim administration system, however, fraud detection takes up a more systematic edge. The system inspects all provided details based on a configurable set of rules that you define besides the general preconfigured rules that come with the system. It then lays all the detailed information before you and shows you flags and red alerts to detected inconsistencies that might hint of a fraudulent transaction in play.
Wrapping up…
In the end, these are the three major components that form the core of any insurance management system. Of course, every insurance business indeed has a specific set of rules and procedures. However, this idea remains largely the same across business lines, whether life or non-life. And by ensuring a robust and reliable core, you will be on your way to enhancing the vital areas of your business:
- To streamline workflows.
- To provide a customer-centric experience.
- To eliminate fraud.
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