A quick guide to enabling both security and speed in claims processing

Nobody’s perfect, right? But if you’re an insurer, try telling that to your customers. Amazon gets their purchases to them the next day. So why, they ask, can it take a month for an insurer to get a reimbursement check to them? 

Providing an ideal customer experience has never been more important; meanwhile, the ability to deliver that experience has never been more challenging. Insurers must keep their customers happy at scale despite those customers’ ever-higher expectations for eimmediate claims payment. If they don’t provide that level of service, a competitor likely will, putting their revenues and market share in jeopardy. With social media, there’s just too much transparency in the market for it to be otherwise. 

The cost of the insurance fraud

It’s easy for insurers to increase customer satisfaction by simply paying out every claim they receive. But this approach not only doesn’t scale, but also leaves money on the table - particularly when some may take advantage of the situation. The total cost of insurance fraud (not including health insurance) in the U.S., according to the FBI, is more than $40B a year, and further, the Coalition Against Insurance Fraud reports that fraud occurs in about 10% of property-casualty insurance losses.

Even if the vast majority of claims are genuine, they can’t be accepted straight away. Research has to be done to ensure potential fraud cases are flagged. In this process, however, there’s typically a trade-off between speed and security, which compromises both customer satisfaction and operational efficiency.

The ideal state should be like the security line at an airport: a highly efficient process clears low-risk travelers quickly and provides them with good service while focusing agent attention where there is an alert.

How to reconcile speed and security in claims processing?

One way to do this is to develop a probabilistic model based on large amounts of historical data, including an insurer’s own internal data as well as external data including public records, crime data, weather, and more. That’s the approach exemplified so well by FRISS’s trust automation platform.

The Clearspeed product suite is another, complementary approach to trust automation. Where FRISS compares claims to models based on historical and external data, Clearspeed is a primary data solution that uses near real-time voice analytics to assess risk. Customers answer automated “yes” and “no” questions about their claims. The answers are converted into a proprietary data model and the data is evaluated for the presence or absence of specific risk indicators. The insurer can use those results to fast-track low-risk claims with greater confidence, and then determine the next steps in the claim process for those high-risk results. Meantime, the insurer is also better able to focus its resources on high-risk claims. 

It's also important to mention what the Clearspeed product suite isn’t: It isn’t based on voice recognition, speech-to-text, or biometrics. Like FRISS, it doesn’t use race, gender, language, or any personally identifiable information. All this means that Clearspeed avoids the issues of bias that may be inherent with other technologies. 

Insurers can use trust automation tools like these at any point in the claims process, from FNOL through to referrals to special investigations units, giving them greater flexibility. They can even harness direct primary measures like Clearspeed’s voice analytics to reduce the frequency of the very risks they’re trying to identify – for example, by motivating opportunists with quasi-legitimate claims to walk away from padding their alleged losses. Insurers also benefit from using complementary risk detection tools, as multifactor approaches can provide greater confidence in their approach to fraud detection.  

Quantifiable benefits

A great example of using FRISS and Clearspeed together for greater benefit comes from Seguros El Roble, a Guatemalan insurer with multiple lines of business and a focus on using digital solutions to help grow its business. The company adopted FRISS and boosted its straight-through processing to 90% in its automobile lines. It then added Clearspeed to its technology suite as a way to straight-through process as much of the remaining 10% as possible with confidence.

The combination of FRISS and Clearspeed has helped the company to clear more claims automatically, identify claims needing further investigation, and avoid paying claims that may be fraudulent. 

In all, Seguros El Roble saw an amazing 31X ROI in one year and saved $1 million in its pilot program alone – a big sum for a smaller insurer. It’s now looking to expand the FRISS/Clearspeed partnership to its healthcare lines and underwriting processes as well. 

Do you want to know more about how implementing trust automation approach can save you money, time and increase customer satisfaction? Check out our whitepaper “Trust Automation - The intelligent way for insurers to speed up customer service, enhance mutual trust, and reduce costs”