Again workplace automation for insurance coverage firms: Successful story

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

For considered one of India’s greatest personal insurers, which prided itself on a excessive declare settlement ratio, this meant discovering new methods to streamline its back-office processes and scale back handbook errors. Nevertheless it wasn’t straightforward. They course of greater than 350,000 instances yearly— every file incorporates over 10 forms of paperwork, various codecs and constructions, 30+ line objects, and a number of ingestion channels. They’d a backend crew of 40 knowledge entry clerks and vehicle specialists 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 strategy. 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 pointers aimed toward bettering motor insurance coverage declare settlement processes. 

The important thing modifications included:

• No arbitrary rejection of motor insurance coverage claims on account of lack of paperwork — insurers should request all required paperwork upfront throughout coverage issuance
• Insurers should allocate a surveyor inside 24 hours, get hold of 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 instances 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 grew to become greater than only a processing problem. It uncovered elementary operational constraints that threatened their skill to scale and ship worth to clients.

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

1. Couldn’t scale their operations with out including head depend.
2. Unable to fulfill IRDAI’s obligatory declare settlement timelines – risking regulatory penalties for violations
3. Getting poor evaluations and unfavorable suggestions from clients
4. Vehicle specialists spending worthwhile time on knowledge entry as an alternative of price evaluation

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

Why handbook declare processing was difficult

Let’s first try to perceive what the insurer’s declare processing workflow used to seem like.

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, clients might be requested to share coverage quantity, car particulars (make, mannequin, registration quantity, and many others.), accident or harm particulars, and police report (if relevant).

3. The client 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 crew.

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

6. After the evaluation, the crew 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 could possibly be disbursed to the client or the storage (in case, the client opts for cashless mode)

The backend crew, consisting of 40 knowledge entry clerks and vehicle specialists, 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 sorts, comparable to 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 might not comply with the identical format because the one issued in one other state.

The crew would meticulously evaluate every line merchandise and half quantity to make sure accuracy earlier than the declare could possibly be additional processed and accredited. 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 may be listed as a bumper cowl on one other. Equally, the element referred to as a boot in paperwork from UK and German producers would present up as a deck or trunk in producers from different nations. And not using a 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 complete course of may take wherever from 15 to 30 days, falling in need of the brand new regulatory timelines. 

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

The insurer rapidly 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 sport. A few of the rivals, particularly the absolutely digital-first insurers, had already began rolling out zero-touch declare processing.

They explored a number of OCR options, however rapidly 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 handbook interventions. And to make issues worse, they may solely feed sure doc codecs into the system, leaving a good portion of the declare recordsdata untouched.

The insurer found out they wanted a format-agnostic resolution that would deal with all doc sorts, extract the correct info, and combine seamlessly into their present claims administration system. After evaluating a number of AI-powered doc processing platforms, they selected to go along 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 slightly than an entire in a single day transformation.

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

The preliminary section targeted on:

• Configuring OCR fashions to extract line objects from restore invoices and estimates
• Creating programs to differentiate components from labor prices
• Constructing validation guidelines to flag potential knowledge inconsistencies
• Integrating with the insurer’s software on their proprietary declare administration system by way of API

The workflow was easy. Right here’s what it regarded like:

1. Declare initiation and doc assortment: When a declare occasion happens, policyholders provoke the declare kind by way of 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 routinely routed to Nanonets by way of API integration. Beforehand, a crew of 40 backend workers would manually evaluate 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 routinely (bill, estimate, registration certificates, and many others.) and route it to the correct knowledge extraction mannequin
   • The mannequin extracts structured knowledge from each standardized and non-standardized codecs
   • Learn and manage line objects from restore estimates and invoices
   • Distinguish between components and labor costs 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 little one half replacements (comparable to door pores and skin versus complete door meeting)
   • Categorizes supplies (plastic, glass, steel) for correct price evaluation
5. Information integration: The extracted and validated info is distributed again into the insurer’s system as a customized JSON file, routinely populating the suitable fields within the declare evaluation interface.
6. Exception-based evaluate: The backend crew evaluations the populated knowledge, focusing solely on flagged exceptions or uncommon instances.
7. Approval and settlement: Claims that go validation proceed to approval and settlement, with considerably lowered handbook intervention.

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

The impression 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 impression:

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

Proper now, the main target is on the core paperwork — estimates, invoices, and pre-invoices — because the crew will get comfy with the brand new course of. After that, we’ll cowl the remaining doc sorts like driving licenses and registration certificates within the subsequent section — this could lower handbook work by 50%.

What’s subsequent

The following section will increase 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 will help. Nanonets works together with your present programs to ship actual enhancements with out turning your operation the wrong way up. Able to see it in motion? Schedule a demo at this time.