The Intersection of People, Customers, & Technology in the Claims Process
 

The Intersection of People, Customers, & Technology in the Claims Process

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The intersection of policy holders, insurance staff and technology offers significant opportunities in the challenging claims processing business: ...

The intersection of policy holders, insurance staff and technology offers significant opportunities in the challenging claims processing business:

Engaging and communicating with your customer base: Allow your policy holders to communicate with you following their preferences and fully integrate all communication channels including social media; in order to make this input valuable you want to find a solution that understand the true meaning of any type of text based input, regardless of structure, source, and format

Workflow talent management: Balance workforce expertise levels between aging experts and less experienced staff by allowing them to focus on cases or requests that align with their expertise while providing less experienced staff with a comprehensive, yet dynamic knowledge base

More efficient processes: Improve and where feasible automate your claims process connecting your mailroom, back office operations, and your service center

Fraud prevention: Focused data mining to detect and prevent fraud

Business growth: The automated and shortened handling significantly reduces the cost involved in the claims processing. At the same time customers are more satisfied and consequently more loyal. Agents are more motivated and have more time to focus on up selling, thus creating addition revenue.

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  • Short intro of <br /> Yourself <br /> Kodak Alaris; mention that we are a silver sponsor <br /> Presentation topic
  • What do these numbers mean? I can hint that they are all statistics related to claims processing. Any suggestions? <br /> <br /> <br /> Only 30% of insurance customers worldwide rated their experience as insurance customers as positive. <br /> (World Insurance Report 2013, Capgemini, 2013) <br /> <br /> Fraudulent claims cost the insurance industry $30 billion annually. <br /> (Insurance Information Institute Report: Why Mobility Matters to U.S. P&C Insurers, Cognizant) <br /> <br /> One in three cited poor claims handling as a major factor in their decisions to switch insurers. <br /> (The Voice of the Personal Lines Customer 2011, Deloitte)
  • Do these pain points impact you as carriers? <br /> <br /> I would like to take a closer look at the key claims related business challenges I have seen working with insurance customers: <br /> <br /> Lets start with the significant changes in the way you need to engage with your customer base. <br /> Claims processing today bears little resemblance to the paradigm of years past. Customers expect far speedier <br /> responsiveness and more comprehensive answers. The more manual processes that remain, the greater the gap <br /> between customer expectations and the level of service excellence delivered. <br /> Insurance customers no longer mail in a claim request, or are satisfied to receive a letter outlining proposed reimbursement <br /> weeks later. They expect a multitude of diverse inputs to be integrated into a claim request at electronic speed, and each <br /> service agent to be knowledgeable about every aspect of the claim. <br /> Online, customers want to quickly find answers to general questions on their own, while also expecting deeper, richer, and <br /> more specialized information to be available through a site search or live support. These elevated expectations set the bar for successful and satisfactory engagement higher and higher. <br /> <br /> Balance workforce expertise <br /> Many insurers today are struggling to leverage the experience of their most experienced claims agents while efficiently training new staff. Recently an insurance carrier told me that it takes up to 15 years for a claims expert to reach the level of senior expertise. To make matters worse, many experienced claims experts are nearing retirement age, but it is difficult to <br /> predict when each individual will depart. <br /> It is not a viable strategy to hire claims agents in volume, train them, and then retain only the top performers. Contact center employee turnover is high and the training effort for new agents presents significant challenges and costs. <br /> A more graceful way of transitioning employee knowledge, streamlining workflow, and retaining and growing knowledge <br /> bases is needed. <br /> <br /> Increase the efficiency of the p&c claims handling process through streamlined operations <br /> Most carriers tell me that they are struggling with manual process steps – including many repetitive tasks, such as checking a claim input for completeness and requesting missing information like an auto accident police report, as just two examples. <br /> Capturing input from some communication channels has been automated, but information sits in “siloed” workflows – <br /> a huge hurdle for automation and cross communication – and for establishing a comprehensive understanding of each <br /> claim submitted. <br /> The handling of a claim requires matching the request with customer information that in most cases resides in legacy systems. <br /> Finding this data, such as customer status and associated entitlement to reimbursement, is often a bottle neck for the end-to-end automation of the claims process. <br /> <br /> Reduce fraud: <br /> We saw the shocking $30billion fraud statistic. With a 10% overall increase in fraudulent claims since 2010, insurers are seeking smarter, more effective security and fraud prevention technologies. In most cases today, fraud analysis is being done after the fact, as opposed to while fraud is occurring and thus easier to stop or prevent. Some insurers employ hundreds of specialists using innovative technologies and network analysis tools to help prevent fraud. <br /> A higher degree of automation is sometimes seen as “opening the door” for fraud, as fewer agents and employees are in a <br /> position to provide manual checks. <br /> <br /> Move from cost cutting to business growth <br /> An increasingly commoditized P&C market and intense competition should energize the quest for differentiation, and the conduit to distinction Is innovation. <br /> More insurers are likely to grow bolder in exploring alternative channels to capture greater market share, catering to the needs and preferences of different segments while cutting frictional costs. <br /> Strong customer acquisition and retention rates will be critical for sustainable growth for most insurers, especially with ongoing pressure on premiums. <br /> <br /> <br /> Achieving these goals is easier said than done. But it can be done, with the proper smart strategy. <br /> <br />
  • I would now like to take a closer look at each of these challenges and how they can be overcome. <br /> <br /> Claims are no longer arriving only in paper. Your customers communicate in many different ways to submit a claim and provide supporting documentation. Your policy holders expect to communicate with their carriers any way they want - and using different types of communication related to one interaction. <br /> <br /> Just imagine the following scenario - all related to one and the same accident: <br /> <br /> Claim form completed online <br /> Police report arrives by mail <br /> Accident photo sent via smart phone <br /> E-mail supplies insurance number that was missing in claim report <br /> Tweet sent complaining that claim has not been processed quickly enough <br /> Text message corrects VIN number <br /> Phone call made to check on the status of a claim, etc . <br />  High level and function is correct but sounds strange <br /> <br /> No doubt a very challenging situation looking at the exploding variety of these communications, especially keeping in mind that except for the form all of these inputs are unstructured as well as the volumes that needs to be handled by insurance companies – and by the way – other businesses as well.
  • <br /> Understanding what it is that makes a customer a happy customer and what doesn’t is often the first step. <br /> <br /> This survey conducted last year gives some useful pointers about aspects leading to a bad customer experience. We hate to wait, we like dealing with a pleasant person, we want our problems to be resolved in a single interaction, and we want the outcome that we were looking for when we contacted customer service. <br /> <br /> This has far reaching consequences: <br /> It costs 6 – 7 times more to acquire a new customer than retain an existing one – Bain & Company <br /> <br /> 81% of companies with strong capabilities and competencies for delivering customer experience excellence are outperforming their competitors – Peppers and Rogers, 2009 Customer Experience Maturity Monitor <br /> <br /> Please also keep in mind that in a world of social transparency chances are that a dissatisfied customer will make this known publically, potentially causing a much more significant impact than a reduced customer satisfaction of one customer. <br />
  • While social media is not a new trend any more, many of the insurance carriers I have met only start to embrace the topic as far as integrating this communication channel in a systematic way. Most carriers have a social media strategy – however this only relates to outbound communication and the monitoring of social media inputs is often rather ad-hoc and the follow-up very inconsistent and limited to office hours. <br /> <br /> However, social input does not stop at the end of business hours or the weekend – quite in contrary. And unlike the old days when you sent a letter and found a response within weeks acceptable, when you post a comment on a social media tool you expect a reaction within hours if not less. <br /> <br /> In order to be well equipped to handle this challenge, you want to have a solid strategy in place to deal with social media input – monitoring it 24/7 and automatically triggering suitable next steps. Also, from a best practice approach you want to move the communication from the public domain to a private communication if possible and deal with the request or complaint as quickly and consistently as possible. The goal should be that after satisfactory follow-up to a potentially negative comment visible to the public this is followed by a positive post about your quick and professional way to get the problem resolved - resulting in a positive halo effect with the respective community. <br /> <br /> <br />
  • So to summarize, in order to stay competitive and position for future success an insurance carrier needs to update their processes to accept and integrate the inputs arriving in so many shapes and forms and meet changing customer expectations for follow-up. <br /> <br /> This can only be done with a universal platform that is capable of integrating these multi-dimensional inputs including the newer channels like social media and seemlessly capturing and connecting them as input to the claims process as well as providing insurance agents with a 360 degree view in case of inquiries.
  • We talked earlier about the growing workforce talent challenge caused by the extremely long time required for a claims agent to reach its maximum expertise and the fact that many of these senior experts are nearing retirement age. <br /> <br /> This results in two challenges: the need to leverage the expertise from the these senior experts and the challenge to provide junior staff with a knowledge base that allows them to find answers quickly and provide correct and consistent responses. <br /> <br /> Superior solutions based on Artificial Intelligence allow to do both: <br /> An ongoing learning from the exception handling done by senior experts and <br /> The surfacing of most relevant responses leveraging semantic understanding and intelligent filtering of potential responses <br /> <br /> As result your staff is more satisfied and in consequence the turnover rate declines and their motivation impacts the satisfaction and loyalty of your customers. <br /> <br /> <br />
  • Understanding the true meaning of a customer request or inquiry is the first step to quickly and efficiently respond to it. <br /> <br /> There is a variety of approaches to extracting information, to accommodate the variety of input structures and formats. <br /> <br /> First of all, information can be extracted using a graphical approach, which is mostly applicable to claims forms because the data can be found in specific positions in a document. <br /> <br /> Most solutions use rules based extraction methods like “if the form has the word claim” in the upper right hand corner then it is related to a claims process and the name following is the name of the insurance customer. Well, this may be a police report or the assessment of a repair shop and may not carry the word “claim”. <br /> <br /> And , rules really won’t do a good job at extracting information from unstructured input. This is where a linguistic or semantic approach makes more sense and can locate content e.g. in an email body text. <br />
  • As previously mentioned, the first step towards the automation of the claims process is to integrate the processing of the different communication channels. Once this major hurdle is taken, the next significant opportunity is to automatically classify and extract data related to a claim. <br /> <br /> You may be wondering why I did not mention an opportunity to optimize the step of recognition. Well, there isn’t as much optimization potential in recognizing content; OCR and document capture technologies have existed for a long time and have been optimized to a large degree. <br /> <br /> So let’s now take a closer look at the classification and extraction of information. The reason that this is a largely untapped opportunity lies in the fact that most existing automation approaches do not apply to unstructured content, which, as we know, makes up the majority of the incoming business communication in most Enterprises. Therefore, a solution that can classify unstructured content can yield an estimated 80% optimization rate! <br /> Finally when it comes to extracting data, the same idea applies and we see great savings potential because companies employ inadequate and largely manual methods to find, recognize and process relevant data. <br />
  • There are roughly three methods of classifications, and these are sometimes combined <br /> <br /> Symbolic, also known as barcode, is the easiest and most accurate. It typically applies to paper and fax sources, but not to e-mail and social media inputs. <br /> <br /> Graphics-based document analytics work like a human visual categorizer, classifying documents by looking at their appearance but not reading text. For paper-based workflows, this is typically used for semi-structured type documents like invoices, where the document type is known. <br /> <br /> Graphics and text base keyword combined. Keyword is simple and typically combined with graphics-based analytics to add simple text rules. Example: <br /> when graphics says it is a car repair invoice, and keyword says to look for the words “car repair,” there is a high confidence about the classification. However, this process requires scripting and lacks flexibility. <br /> <br /> Full, text-based document analytics is the most recent and complex form of classification and the most versatile, as it classifies all text-based inputs - including OCR’d scanned paper, e-mails, e-docs and social media content. And of course applying semantic understanding to the text based document analytics, this provides the highest accuracy of identifying the actual meaning of the input, even if critical key words are not used. <br />
  • Fraud takes place in many different ways. It ranges from hard fraud, where someone deliberately fabricates a false claim or incident—to soft fraud, as when an individual exaggerates damage or an injury. <br /> As mentioned before, fraud is increasing and the current business impact is already extremely high, which should make fraud detection and prevention a strategic priority. <br /> <br /> Some insurers employ hundreds of specialists using innovative technologies and network analysis tools to identify and help prevent fraud. Fraud analytics tools are a critical tool to master the challenge and to create a competitive advantage by segmenting risk better than other insurance carriers. Advanced data mining and predictive modeling, supporting highly skilled employees for a comprehensive fraud detection framework is critical for future success. <br /> <br /> And of course it is key to exchange data between insurance providers and collaborate on analytics to uncover “hard fraud” cases
  • All these dynamics lead to increased challenges that conventional solutions were often not able to solve in a comprehensive way. But technology advances are opening new possibilities. Solutions that use artificial intelligence offer the following opportunities: <br /> <br /> The ability to understand the true meaning of inputs for a claim, regardless of structure, source, and format. The result: accurate claim datasets. <br /> <br /> The results of intelligent understanding are then applied to automate the claims process where feasible and to engage experts when appropriate. As a result this leads to significant savings in time and resources and to higher employee satisfaction. <br /> <br /> Lastly, the datasets are turned into knowledge. Knowledge that allows having more effective dialogs with customers when they call to inquire about the status of their claim that they submitted and to achieve higher process efficiency. Finally, trying to define a complex claims process via rules is literally impossible. You want to look for a solution that learns over time from expert exception handling and is therefore highly flexible and scalable.
  • To summarize: the intersection of policy holders, insurance staff and technology offers significant opportunities in the challenging claims processing business: <br /> <br /> Engaging and communicating with your customer base: Allow your policy holders to communicate with you following their preferences and fully integrate all communication channels including social media; in order to make this input valuable you want to find a solution that understand the true meaning of any type of text based input, regardless of structure, source, and format <br /> <br /> Workflow talent management: Balance workforce expertise levels between aging experts and less experienced staff by allowing them to focus on cases or requests that align with their expertise while providing less experienced staff with a comprehensive, yet dynamic knowledge base <br /> <br /> More efficient processes: Improve and where feasible automate your claims process connecting your mailroom, back office operations, and your service center <br /> <br /> Fraud prevention: Focused data mining to detect and prevent fraud <br /> <br /> Business growth: The automated and shortened handling significantly reduces the cost involved in the claims processing. At the same time customers are more satisfied and consequently more loyal. Agents are more motivated and have more time to focus on upselling, thus creating addition revenue. <br />

The Intersection of People, Customers, & Technology in the Claims Process The Intersection of People, Customers, & Technology in the Claims Process Presentation Transcript

  • The Intersection of People, Customers, and Technology in the Claims Process Daniel Hughes, Enterprise Solutions Manager, Kodak Alaris
  • 30% …of insurance customers worldwide rated their experience as positive …is spent on fraudulent claims annually$30 billion 1 in 3 …cited poor claims handling as a major factor in their decisions to switch insurer
  • Are These Your Challenges? Business Growth Workforce Talent Problem Reduce Fraud Engaging with Customer Base Streamlined Operations
  • New and Developing Media for Customer Engagement
  • Social Transparency – Words Travel Fast The problem was resolved quickly 69% I had to explain my problem to multiple people 72% The person who helped me was nice 65% The person I dealt with was unpleasant 67% The problem was resolved in one interaction - no passing around to multiple people 63% My problem took too long to resolve 65% The outcome was what I was originally hoping for when I contacted customer service 47% The problem was not resolved 51% Source: Dimensional Research, "Customer Service and Business Results: A Survey of Customer Service from Mid-Size Companies" sponsored by Zendesk, April 15, 2013 * Any company that was not large, well- known or a small local or online company. Factors that Contribute to Good and Bad Customer Service Interactions with Medium-Sized Companies* According to US Internet Users, 2013 % of respondents Good Customer Service Interactions (n=1,004) Bad Customer Service Interactions (n=565) *Any company that was not large, well-known or a small local or online company Source: Dimensional Research, “Customer Service and Business Results: A Survey of Customer Service from Mid-Size Companies” sponsored by Zendesk, April 15, 2013.
  • Customer Interactions – the Challenge Source: Converseon, 2012 • Social media input arrives 24/7 • Most organizations are at the beginning of the maturity curve
  • Handle All Input Dimensions Format Source Structure Fax Server Scanner File System Mail Server Image Paper PDF Email Unstructured Semi-structured Structured
  • Self Learning Expert Forum Content Repository Across System Boundaries Any Content Documents Free Text Search Intranet Any Source No Administration Versioning Dynamic Q&A Scripting Workforce Talent Management Data ww w
  • Semantic Understanding Extracts Real Meaning Graphically Linguistically Rule Based Contains “Claim”
  • Streamlined Operations • About 75 % optimization potential for extraction • Current methods of data recognition and processing are inadequate • About 80 % optimization potential for classification • Existing automation approaches only apply to structured documents Optimization Potential Scan, Fax, Emails, eDocs, SMS, Social Media Recognize Classify Extract Validate Export Process Route Correct / Incorrect?
  • Advanced Document Classification Techniques • Symbolic (barcode) • Document analytics • Graphic-based • Text-based • Statistical methods • Semantic understanding LOW HIGH Property Claim Property Underwriting Customer correspondence Car claim
  • Fraud Detection and Prevention Advanced data mining Mobile Devices Segment Risk Predictive Modeling Pattern Spotting Self Learning Hard Fraud Cross Provider Security Mechanism
  • Artificial Intelligence Opens New Opportunities UNDERSTAND PROCESS KNOW ? i !
  • The Intersection of People, Customers, and Technology in the Claims Process Presents significant opportunities for insurance carriers to secure their future  Engaging and communicating with customer base: Support policy holder communication preferences and fully integrate all communication channels including social media  Workforce talent management: Leverages the expertise of most experienced agents and offer a comprehensive, self learning knowledge base to new staff  Streamline d Operations: Reduce manual steps and silos into end-to-end claims process automation  Fraud prevention: Focused data mining and analytics  Business growth: Reduce cost and create additional revenue
  • Do you want to discuss further? See you at booth 110 in the exhibition hall Contact me at daniel.hughes@kodakalaris.com