Averting disaster: How AI data extraction helps P&C insurers meet customer needs in emergencies

The P&C insurance sector is undergoing massive transformation, under pressure from two distinct forces. The first is the increasing numbers of natural disasters damaging property and wreaking havoc on claims departments. The second is the rise of insurtech companies that can write policies and process claims in a fraction of the time customary at legacy insurers.

Customers want fast response times and convenient claims processes. Unfortunately, legacy lenders struggle to keep up with high-tech insurance startups without massive overhauls to their processes. And the incredibly high volume of catastrophe claims, driven by climate change, can make it hard to even keep up with demand, let alone provide immediate turnaround.

That is, unless insurance companies adopt the right automation tools. A new breed of intelligent document processing platforms leverage artificial intelligence for data extraction, dramatically reducing or eliminating the manual work that goes into reviewing documents and updating databases.

Data extraction is the process of AI scanning a document, identifying all of the information it contains, and either automatically inputting it into a database, or processing it for further use in another system. In manual insurance claims processes, adjusters read a claim form, then type the information into a database. With data extraction, human review is greatly reduced or isn’t even necessary. AI automatically extracts all of the unstructured information in a document and categorizes it, dramatically improving efficiency. 

The risks of manual catastrophe claims processing

Failure to adopt new technology won’t just slow claims processing down during disasters — it could undermine the P&C insurance business model. According to McKinsey, the industry is quickly moving toward an era of completely automated claims, which could go far to mitigate the impact of climate change on claims processing departments. Some of the biggest risks of sticking to manual processes include these:

Miscategorizing documents

During a disaster, adjusters are inundated with hundreds and even thousands of claims documents. It can take entire days just to go through submissions and correctly organize them. Between the high pressure of time sensitivity and general fatigue, workers can easily file documents incorrectly, resulting in delayed or erroneous processing.

Prioritizing the wrong claims

Trying to process documents quickly also puts adjusters at risk of focusing on the wrong claims. When a high volume of claims comes in all at once, it can be hard to identify which files are the most urgent. If adjusters take too long to process substantial claims (such as total losses), they’ll likely lose the policyholder and are more likely to face a public adjuster or costly settlement dispute lawsuit.

Neglecting customers

Understandably, customers are anxious about claim status when they’re waiting for reimbursement for property damage. After all, they may be relying on a quick reply to get the funds they need for their health and safety. But adjusters may struggle to respond to them in a timely manner while manually processing documents. This can also result in customers switching to different providers and increases the chance of a complaint or lawsuit.

How data extraction helps expedite catastrophe claims processing

Data extraction can free claims adjusters from the rigors of document processing so they can focus on customer service. Here’s how:

Eliminates data entry

Data extraction automatically captures information from documents without the need for manual data entry, or even human review, allowing hundreds or even thousands of documents to be processed in a fraction of the time, and with greater accuracy. In disaster situations with a high volume of claims, this can save adjusters entire days of work (and their lives) and ensure policyholders promptly receive the help they so desperately need.

Automatically organize files

Since AI can recognize the information it reads, it can automatically route claims documents to the correct customer files and wherever else they need to go. For instance, in a company that communicates with customers through multiple channels, AI culls information from emails, texts, and document scans to sort them into the right databases and give employees a head start on further processing.

Respond to common customer requests immediately

The AI capabilities that enable data extraction, such as reading and identifying information, can also automate some customer support. During a disaster, adjusters are likely to be inundated with repetitive requests for status updates about their claim. Platforms like Automation Hero  use natural language processing to understand the intent of a request and then automate a response for dramatically faster replies, without distracting the adjuster.

Meeting customer needs has always been the heart of the insurance industry. Increasing extreme weather events and evolving customer expectations have made this more difficult, especially in recent years. Fortunately, AI platforms like Automation Hero can immediately augment insurance company’s existing systems for more streamlined operations and improve customer service. Read our e-book to see what Automation Hero can do for your claims department.