Again workplace automation for insurance coverage corporations: A hit story

The Indian motor insurance coverage market is at the moment valued at round $13.19 billion and is projected to achieve $21.48 billion by 2030. Whereas the business continues to develop steadily, regulators have additionally issued robust mandates to insurers to enhance their turnaround instances and supply higher buyer experiences.

For considered one of India’s greatest non-public insurers, which prided itself on a excessive declare settlement ratio, this meant discovering new methods to streamline its back-office processes and scale back guide errors. Nevertheless it wasn’t simple. They course of greater than 350,000 circumstances yearly— every file accommodates over 10 varieties of paperwork, various codecs and constructions, 30+ line gadgets, and a number of ingestion channels. That they had a backend group of 40 information entry clerks and car consultants manually inputting info from restore estimates, invoices, and supporting paperwork into their declare administration system

This inefficient, unscalable workflow could not meet the regulator’s turnaround time mandates, forcing a re-evaluation of their motor declare processing method. Let’s discover how they went about it.

What modified in motor declare processing in 2024

In June 2024, IRDAI, the Indian insurance coverage regulator, issued new tips aimed toward bettering motor insurance coverage declare settlement processes. 

The important thing modifications included:

• No arbitrary rejection of motor insurance coverage claims attributable to lack of paperwork — insurers should request all required paperwork upfront throughout coverage issuance
• Insurers should allocate a surveyor inside 24 hours, receive the survey report inside 15 days, and resolve on the declare inside 7 days of receiving the survey report
• Obligatory buyer info sheet (CIS) to supply clear coverage particulars and claims course of
• Restrictions on coverage cancellation, permitting it solely in circumstances of confirmed fraud with 7-day discover
• Requirement to reveal the insured declared worth (IDV) calculation technique

Because the insurer’s enterprise grew quickly, these regulatory challenges made dealing with near 30,000 claims month-to-month turned greater than only a processing problem. It uncovered basic operational constraints that threatened their capacity to scale and ship worth to prospects.

Let’s discover how these modifications affected the insurer’s enterprise:

1. Couldn’t scale their operations with out including head rely.
2. Unable to satisfy IRDAI’s obligatory declare settlement timelines – risking regulatory penalties for violations
3. Getting poor critiques and detrimental suggestions from prospects
4. Car consultants spending worthwhile time on information entry as an alternative of value evaluation

These challenges made it unimaginable for them to justify premium will increase based mostly on precise declare prices and danger profiles.

Why guide declare processing was difficult

Let’s first try to perceive what the insurer’s declare processing workflow used to appear to be.

1. When an accident happens, the client can both name up the insurer’s toll-free quantity to register the declare or use their proprietary cell app to finish the declare kind.

2. Throughout this, prospects shall be requested to share coverage quantity, car particulars (make, mannequin, registration quantity, and so forth.), accident or injury particulars, and police report (if relevant).

3. The shopper is then requested to take the car to one of many insurer’s licensed community garages for inspection and restore. They should submit the required paperwork to the surveyor assigned by the insurer.

4. The surveyor would examine the car and put together a report, which might then be submitted to the claims group.

5. The claims group would then assess the surveyor’s report and the paperwork submitted, evaluating components like car identification, half numbers, unit pricing, and general declare validity.

6. After the evaluation, the group would manually enter the related particulars into the claims administration system.

7. The declare would then undergo a number of layers of approval earlier than the settlement quantity may very well be disbursed to the client or the storage (in case, the client opts for cashless mode)

The backend group, consisting of 40 information entry clerks and car consultants, manually inputs all the important thing particulars from the declare file into their proprietary declare administration system. This included capturing info from totally different doc varieties, reminiscent of estimates, invoices, registration certificates, driving licenses, and extra.

Keep in mind that these paperwork are issued by totally different sources. As an illustration, a driver’s license issued in a single state could not comply with the identical format because the one issued in one other state.

The group would meticulously overview every line merchandise and half quantity to make sure accuracy earlier than the declare may very well be additional processed and authorised. One other problem was the inconsistent naming conventions for components throughout totally different garages and producers – the identical element would have totally different names relying on who submitted the doc.

As an illustration, what seems as a entrance bumper on one estimate could be listed as a bumper cowl on one other. Equally, the element known as a boot in paperwork from UK and German producers would present up as a deck or trunk in producers from different nations. With no standardized database, these variations created fixed confusion.

Mismatches in car identification or half numbers, incorrect unit pricing, or lacking paperwork would trigger the declare to return to evaluation. This whole course of may take wherever from 15 to 30 days, falling wanting the brand new regulatory timelines. 

When claims prolonged past IRDAI’s mandated settlement intervals, the implications have been each regulatory and industrial. On the regulatory aspect, the insurer confronted financial penalties and present trigger notices. Commercially, these delays broken their market repute and prompted formal buyer complaints, which require important time and assets to resolve. The prolonged processing drove up operational prices, as claims wanted extra touchpoints and extended dealing with, additionally leading to buyer dissatisfaction.

The insurer shortly realized that this inefficient workflow couldn’t sustain with the rising enterprise calls for and the stricter regulatory necessities.

How the insurer automated its declare processing workflow

The insurer knew they needed to step up their recreation. A number of the opponents, particularly the absolutely digital-first insurers, had already began rolling out zero-touch declare processing.

They explored a number of OCR options, however shortly realized such instruments gained’t lower it. These instruments have been closely depending on format and construction consistency. This led to formatting errors and inconsistent extraction, and extra guide interventions. And to make issues worse, they might solely feed sure doc codecs into the system, leaving a good portion of the declare information untouched.

The insurer found out they wanted a format-agnostic resolution that would deal with all doc varieties, extract the correct info, and combine seamlessly into their current claims administration system. After evaluating a number of AI-powered doc processing platforms, they selected to go together with Nanonets’ Clever Doc Processing (IDP) resolution.

Right here’s why:

• Simplicity of the PDF extraction workflows
• Line merchandise extraction accuracy
• API and system integration capabilities
• Capability to deal with all doc codecs, together with handwritten and semi-structured paperwork
• Multi-lingual capabilities

We at Nanonets labored with the insurer to create a tailor-made doc processing resolution that match their particular claims workflow. The implementation targeted on incremental enhancements relatively than a whole in a single day transformation.

The group started by tackling essentially the most important paperwork within the claims course of: estimates, invoices, and pre-invoices. These paperwork comprise the important details about car damages, required repairs, and related prices. 

The preliminary part targeted on:

• Configuring OCR fashions to extract line gadgets from restore invoices and estimates
• Creating programs to tell apart components from labor prices
• Constructing validation guidelines to flag potential information inconsistencies
• Integrating with the insurer’s utility on their proprietary declare administration system through API

The workflow was simple. Right here’s what it appeared like:

1. Declare initiation and doc assortment: When a declare occasion happens, policyholders provoke the declare kind by the insurer’s consumer interface or customer support. The declare kind collects fundamental particulars together with important paperwork together with restore estimates, invoices, and supporting documentation.
2. Doc submission to Nanonets: As soon as uploaded to the insurer’s system, these paperwork are robotically routed to Nanonets through API integration. Beforehand, a group of 40 backend staff would manually overview and enter info from these paperwork into their system.
3. Clever doc processing: Nanonets processes the paperwork utilizing specialised fashions to:
   • Classify every doc sort robotically (bill, estimate, registration certificates, and so forth.) and route it to the correct information extraction mannequin
   • The mannequin extracts structured information from each standardized and non-standardized codecs
   • Learn and manage line gadgets from restore estimates and invoices
   • Distinguish between components and labor fees utilizing key phrase recognition
4. Elements database validation: Extracted half info is validated in opposition to a complete components grasp database that:
   • Standardizes various half names throughout totally different garages (bumper vs. cowl)
   • Identifies potential youngster half replacements (reminiscent of door pores and skin versus whole door meeting)
   • Categorizes supplies (plastic, glass, steel) for correct value evaluation
5. Knowledge integration: The extracted and validated info is shipped again into the insurer’s system as a customized JSON file, robotically populating the suitable fields within the declare evaluation interface.
6. Exception-based overview: The backend group critiques the populated information, focusing solely on flagged exceptions or uncommon circumstances.
7. Approval and settlement: Claims that go validation proceed to approval and settlement, with considerably lowered guide intervention.

The preliminary implementation targeted on core paperwork (estimates, invoices, and pre-invoices), with plans to develop to supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork.

The influence of automating insurance coverage claims processing

It’s been solely three months because the implementation, however the brand new workflow has already proven promising indicators for the insurer. 

Let’s check out the influence:

• 1.5 million pages processed in three months, virtually double the earlier quantity of 760,000 pages
• Standardized naming for roughly 600 frequent components that cowl 90% of claims
• Systematically determine alternatives for youngster half replacements (like a door pores and skin at ₹5,000 versus a whole door meeting at ₹20,000) – saves a ton of value
• Allow workers to spend much less time on information entry and extra on doc overview and exception dealing with
• Simpler to satisfy IRDAI’s regulatory timelines, which require declare selections inside 7 days of receiving the survey report
• Customized JSON integration allows seamless information circulation between Nanonets and the insurer’s declare administration system

Proper now, the main focus is on the core paperwork — estimates, invoices, and pre-invoices — because the group will get snug with the brand new course of. After that, we’ll cowl the remaining doc varieties like driving licenses and registration certificates within the subsequent part — this could lower guide work by 50%.

What’s subsequent

The following part will develop doc processing to incorporate supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork. Moreover, we’re working with the identical insurer, automating their medical claims processing workflow. 

In case your insurance coverage firm is struggling to cope with mounting paperwork and lacking regulatory deadlines, we might help. Nanonets works together with your current programs to ship actual enhancements with out turning your operation the wrong way up. Able to see it in motion? Schedule a demo right this moment.