How Will Insurtech Impact the Claims World?
Workers’ compensation is not immune to the disruptive technologies impacting nearly every industry and line of insurance. In this session at the 2017 National Workers’ Compensation & Disability Conference, Jeffrey Austin White, Senior Vice President of Workers’ Compensation Product Management at Gallagher Bassett, offered insights on the technologies and social trends that will likely impact the workers’ compensation world in the next five years.
Many investors are looking for ways to streamline and automate insurance. This change is coming quickly. Many are also exploring avenues that insurance firms have less incentive to exploit or simply are not agile enough to achieve. This includes offering ultra-customized policies, social insurance, peer-to-peer insurance, or using new streams of data from internet-enabled devices to dynamically price premiums according to observed behavior.
Insurtech startups can be categorized in four groups:
- Analytics – artificial intelligence, social media data, fraud detection, data science services.
- Workflow – drone inspection, business process automation, robo-advisors, live video streaming.
- Carriers – peer-to-peer, pay-as-you-go, usage-based insurance, micro, parametric.
- Distributors – aggregator, digital broker, consolidator, rate comparison, mobile.
Robotic Process Automation
According to Oxford University, 47% of the total U.S. employment is at risk in the next 20 years due to computerization. The insurance industry can expect robotic process automation (RPA) to take over many jobs that include tasks like logging into systems, entering data, auditing workflow, sending communications, searching data sources, performing mathematical calculations and manipulating files. The RPA market grew 64% to $200 million last year and is expected to grow 70-90% in 2018. If this generation does not use it in the workforce, the next generation definitely will.
Data is everywhere. Companies are capturing everything about us, including location, phone calls, e-mail content, website comments, social media interactions, conversations, driving patterns, telemetry, spending habits, eating habits, personal health information, browsing history, travel patterns, what you watch on tv and what you say. Humans are incapable to sort through this mass of information to use it, however, computers can easily process this information.
The industry is struggling to understand how to effectively use wearables. They can be used for safety on the front end and in claims handling on the back end. This is something that will be actively used in workers’ compensation soon, the industry just needs to figure out exactly how.
This is the future. Artificial intelligence in claims processing is commonly known today as predictive modeling and machine learning. The typical goal is to analyze closed claims – more specifically to identify straightforward claims for automatic processing or complex claims requiring human intervention. This technology is learning on its own and can provide output to rank and classify information, make recommendations, group similar items, associate numerical value and detect anomalies.