Claim Management Automation
A way to unlock up to 30% reduction in claim processing costs.
ScienceSoft applies 11 years of experience in insurance software development to introduce effective automation of claim management processes.
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Claim Management Automation: Key Aspects
Claim management automation helps streamline and speed up the entire insurance claim cycle, from claim data intake to claim settlement and reporting. An automated claim management system relies on artificial intelligence (AI) to enable analytics-based claim decisioning, accurate damage estimation, and instant detection of insurance fraud.
Rather than completely eliminate manual efforts, claim automation aims to minimize low-value claim-related tasks and let the employees focus on handling complex cases that require human involvement. It helps optimize operational costs and ensure topflight customer experience.
- Necessary integrations: a customer portal, a policy administration system, accounting software, etc.
- Implementation time: 9–15+ months for a custom claim management automation system.
- Development costs: $200K–$500K+, depending on a solution’s complexity.
- A payback period: <12 months.
4 Main Claim Management Areas to Automate
Claim validation
Get fast and accurate claim validation with minimal human involvement thanks to RPA- and AI-based automation. Leverage intelligent detection of fraudulent claims to prevent financial losses.
Damage estimation
Harness the power of the cutting-edge AI, big data, IoT, and image analysis techs to get streamlined damage inspection and precise damage assessment.
Claim settlement
Automate claim triaging, decisioning, and payment to achieve 80%+ faster claim cycle. Get 100% visibility of the claim handling progress.
Customer interaction
Employ AI-powered virtual assistants to deliver automated personalized customer interactions via the client’s preferred method of communication.
Key Features of a Claim Management Automation System
In our insurance claim automation projects, ScienceSoft designs and builds solutions with functionality bound to each client’s unique claim management needs. Below, our consultants list the core features most commonly requested by our customers:
Claim validation
- Automatic aggregation of insurance claims from multiple channels: a customer portal, emails, phone calls, etc.
- Automated data extraction from the First Notices of Loss (FNOL) and claim-supporting documents (medical reports, accident reports, photos or videos of damaged property, travel documents, etc.).
- Support for claim documents in various formats: text, PDF, image, audio, video, and more.
- Automated conversion of paper claim documents to a digital format using optical character recognition (OCR).
- AI-powered claim validation against the insurance coverage terms based on analysis of data provided by the policyholder or insurance agent and data available in third-party sources.
- Intelligent detection of fraudulent claims.
- Rule-based routing of claims that contain incomplete, inaccurate, or contradictory data for manual check.
Claim decisioning
- User-defined rules for claim approval or rejection, e.g., rejecting fraudulent, late, partially or wrongly disclosed claims.
- AI-powered claim-related decision-making.
- Instant communication of claim decisions to customers.
Claim triaging
- AI-supported claim triaging based on the analysis of claim urgency, damage extend, injury severity, financial and reputational risks associated with non-settlement, etc.
- User-defined rules for claim prioritization based on the claim date, claim amount, policyholder value, etc.
Damage estimation
- Insured asset monitoring and damage evaluation using IoT and computer vision.
- AI-powered damage assessment based on the analysis of claim-supporting documents and the relevant data from external sources.
- Template-based creation of damage estimation requests and sending them to the relevant in-house experts (e.g., engineers, medical experts) or third-party damage assessment service providers.
- Automatically calculating the due claim payment amount.
Claim settlement automation
- AI-based suggestions on the best-fitting damage handling service providers (e.g., particular healthcare organizations, car repair companies, etc.) to recommend to customers.
- Automated claim payments (full, partial, split, recurring payments), including:
- Compensation payments to policyholders.
- Direct payments to the damage handling service providers.
- Real-time monitoring of the claim settlement progress and claim costs.
Task management automation
- Automatically assigning claim processing tasks to the insurance team members based on their qualification, availability, location, etc.
- Automated generation of employee task lists with case-specific KPIs.
- Rule-based routing of omnichannel customer requests to the appropriate claim specialist.
- AI-powered virtual assistant to handle customer interaction tasks: responding to simple inquiries, providing 24/7 support, routing customer requests to the relevant specialists, etc.
Analytics and reporting
- Real-time calculation and monitoring of the essential claim metrics: claim volume by period, average time to settle a claim, average cost per claim, claim frequency, claim severity, loss ratio, etc.
- Automated claim and loss run reports.
- Scheduled and ad hoc report submission to the required regulators.
- AI-powered forecasting of claim costs (by period, customer, region, etc.) based on the analysis of the claim payment history, customer risks, force majeure risks (e.g., natural disaster risks), and more.
Security and compliance
- Compliance with IFRS17, CCPA, CPRA, GLBA, FROI/SROI, COBC, OSHA, OFAC, local DCI requirements, SOC1 and SOC2, SAMA requirements (for the KSA), MCEV principles and GDPR (for the EU), NYDFS (for New York), HIPAA (for health insurance), other relevant global, local, and industry-specific regulations.
- Real-time compliance monitoring.
- End-to-end audit trail of claim management activities.
- AI-powered fraud detection.
- Role-based access control.
- Multi-factor authentication.
- Data encryption.
Essential Integrations for an Automated Claim Management System
Integrating claim processing software with the relevant back-office and third-party systems helps achieve higher degree of automation and instantly access the required claim-related data. ScienceSoft recommends establishing the following integrations:
- Customer interaction channels (a customer portal, email services, messaging services, a business phone system, etc.) - for instant claim aggregation and facilitated claim status reporting to customers.
- Policy administration system - for streamlined claim validation.
- Third-party data sources (internal systems of medical information bureaus, police administration, etc.; social media) - for data-driven claim decisioning and damage assessment.
- Tracking solutions (IoT ecosystems, computer vision systems, and asset monitoring software of the insurer, commercial customers, third-party telematics providers, etc.) - for fast and precise damage estimation.
- Vendor management software - for prompt selection of optimal health and repair service providers to recommend to policyholders subject to damage.
- Accounting system - for automated recording of claim payment transactions in the general ledger.
- Financial planning and analysis software - for accurate planning of claim handling expenses.
- Business intelligence solution - for comprehensive claim analytics and reporting.
Claim Management Automation Pricing and ROI
Implementing claim management automation for a midsize insurance company may cost around $200,000–$500,000+, depending on the scope and complexity of an automated claim processing system.
Below, we provide the approximate cost estimations based on ScienceSoft's experience in the claim management automation projects:
$200,000–$400,000
Development of a custom automated claim management software of average complexity.
$500,000+
Building a comprehensive custom claim management system powered with AI/ML, big data, blockchain.
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NB! If you don’t have specific requirements for the UX and UI design, ScienceSoft suggests building your claim processing automation system based on a low-code platform (e.g., Microsoft Power Apps). Our experience shows that this option helps reduce the development cost by up to 70%. |
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Key financial outcomes of claim management automation
Success Factors for Claim Processing Automation
According to McKinsey, RPA-enabled process automation alone can bring up to 200% annual ROI. Additionally, covering the following important factors will help you drive even higher payback from automating your claim management operations.
AI-powered analytics
To leverage no-touch claim processing, instantly detect fraudulent claims, and rely on intelligent decision-making.
Integration with multiple data sources
To verify claims and evaluate damage with full insight into the claim case details, customer behavior, and external conditions.
System scalability
To smoothly process abnormally large volumes of claims caused by external factors (e.g., claim handling during natural disasters or spikes of the COVID-19 pandemic).
Expert advice
To avoid penalties for non-compliance and reputational damage, make sure your automated claim processing system meets the legal framework and can be easily evolved to adopt frequent changes in the regulatory requirements.
When to Opt for a Custom Solution
ScienceSoft’s experts recommend building a custom claim management automation system in the following cases:
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You need to automate complex or unique claim management workflows, for example:
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You need a flexible solution that can be easily evolved with:
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You want smooth and cost-effective integration of claim processing automation software with all the required systems, including legacy tools and complex asset tracking systems. |
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You need a solution that provides compliance with necessary legal regulations, including local regulations. |
Claim Management Automation with ScienceSoft
In insurance software development since 2012, ScienceSoft provides comprehensive consulting and development services to introduce seamless claim management automation.
Claim management automation consulting
We create a detailed concept of your claim management automation system and provide expert advice on the use of advanced techs. You also receive an implementation roadmap with cost and time estimates and get expert advice on legal compliance.
Implementation of claim management automation
We cover end-to-end development of a claim automation solution or revamp your existing claim processing tool. You benefit from fast implementation and excellent software quality. Also, you get smooth integration with all the required software and hardware.
A Featured Success Story by ScienceSoft
Development of an Automated Claim Processing System Powered with Augmented Reality
- Automated processing of car damage claims, damage photos, and AR-supported 3D car images.
- Rule-based claim routing for estimation to the available analysts.
- Instant customer notifications on claim approval or rejection.
- Suggestions on the fitting repair facilities and automatically calculating the distance to each facility.
Value: Facilitated damage estimation, faster claim resolution, improved customer experience.
About ScienceSoft
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas. Since 2012, we help insurance companies implement effective claim processing automation. Being ISO 9001- and ISO 27001-certified, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security.