In its recently published Hype Cycle for Digital Life and P&C Insurance, 2022, Gartner rates intelligent document processing (IDP) as one of the tech trends with the highest short-term benefits for the insurance industry. Yet, the market penetration is very low: only 1% of insurance CIOs have already implemented an IDP project. This is even more astonishing as IDP for insurance can contribute a great deal to improving operational efficiencies around human-centric processes, like insurance underwriting and complex medical claims processes.
What is intelligent document processing for insurance?
Intelligent document processing is a method of automating information extraction and processing that combines advanced artificial intelligence techniques, like machine learning and natural language understanding, with more traditional tools like optical character recognition. For insurance carriers that need to analyze large quantities of documents, finding an effective IDP solution is a great opportunity to improve process efficiencies, speed up response times and increase business performance overall.
Intelligent document processing drives efficiency
To prepare new quotes, underwriting teams are typically tasked with reviewing and extracting key information from prior carrier plans and submissions. Over the course of a year, the process can involve thousands of documents and is onerous work.
Unum, for example, a large US insurance carrier, employs about 120 quote specialists generating about 80,000 quotes every year. To do this, they need to extract 50 to 60 pieces of information from lengthy documents which use different terminologies depending on the carrier, and sometimes require interpretation (for example, correctly interpreting the sentence “Insured employees are not required to contribute to the cost of the Long-Term Disability coverage” and classify it as “100% employer paid“). This task is especially difficult for new hires and the overall error rate is high.
An early adopter of IDP for insurance, Unum has successfully automated this process with Cortical.io intelligent document processing solution and reports significant gains in terms of speed and quote accuracy. SemanticPro, the insurance IDP solution implemented by Unum, accurately identifies and extracts key information found in terms and provisions, interprets and classifies extracted information, and compares text based on meaning, making it easy to search, locate and redline differences in provisions.
The examples where IDP for insurance has contributed to greater operational efficiencies are numerous. At a commercial property insurance company, the policy review team spent one-third of their time comparing documents issued in different countries and looking for differences in provisions. IDP-driven automation has significantly reduced the time it took to review and compare policies while increasing the accuracy of data extraction.
Quicker response times and better customer retention with IDP
Intelligent document processing can streamline another key activity of the insurance business: the intake process.
Large insurance companies often deal with extremely high volumes of email submissions that come in through their regional field offices. These Requests for Proposal (RFPs) contain information about the prospect as well as insurance census data (essential information about individuals who will be insured). This content must be reviewed, sorted, and then input into the company’s Customer Relationship Management (CRM) portal, where quote specialists will review the data and use it to prepare insurance quotes.
The process of analyzing all this data manually is cumbersome, given the sheer number of different products, brokers and client details that must be correlated not just from the email content, but from information contained in attachments. Adding to the difficulty is the fact that email submissions often don’t adhere to a single format; some may use an industry-standard template while others may organize data in a company-approved structure, making it more time-consuming to consistently and quickly locate key details without error.
All these obstacles transform intake into an unnecessary long process with brokers and customers waiting for a quote.
Document Processing Platform for Insurance
This is where IDP for insurance comes in. An IDP platform can significantly improve the accuracy and efficiency of the submissions process by using artificial intelligence to automate the following tasks:
- Process email content and attachments to extract targeted data.
- Classify and categorize the extracted data based on the identified product, prospect and type of business.
- Route the extracted data into the CRM.
Using IDP to cut intake turn-around time from hours to seconds allows insurance companies to meet market demand more quickly, giving them a major competitive advantage compared to carriers still relying on manual intake.
IDP for Insurance improves business performance
Improving operational efficiencies and customer satisfaction with intelligent document processing is great, but what about the hard dollar impact of a document automation project? Surely, insurance CIOs and tech buyers must consider the ROI of any IDP solution before starting a project.
The number of documents that must be processed, their average size, as well as the number and type of extractions have a big impact on the ROI of automation solutions. The direct savings of IDP for insurance come from the reduction in the time spent by employees on manual review. Depending on the use case, insurance companies typically save between 30% and 60% of the review time with IDP. These time savings translate in less FTEs affected to the review process, FTEs that can be transferred to more impactful tasks, making better use of people’s skills.
But IDP and document automation improve overall business performance through many indirect benefits as well:
- Reduced company risk because important clauses are not overlooked anymore, nor provisions misinterpreted.
- Shorter sales cycles and consequently, higher deal closing rate.
- Improved pricing strategy through higher accuracy of data analysis.
- Easier knowledge transfer from senior employees to new hires and more consistent company standards.
We have put together a white paper to help you calculate the ROI in the particular case of policy review automation.
Now that you are aware of the benefits of IDP for insurance, it’s time to think about which document automation solution will help you attain them. It all depends on your use case and the type of documents involved. Some IDP vendors focus more on structured and semi-structured content like claim processing. Other have developed natural language understanding (NLU) based capabilities to address the specific challenges of processing unstructured content like policies, or emails with attachments.
CIOs are often reluctant to start an NLU-based IDP project because they fear the project will tie up too many in-house resources and take months to complete. I have good news for them: IDP software like Cortical.io SemanticPro that leverage an AI inspired by neuroscience typically requires less training documents to create viable models. Such IDP for insurance solutions provide short time to value, delivering actionable outcome within weeks, and with minimal manual intervention.
