By Mark Scrivens, FPT Software UK Chief Executive Officer, FPT Corporation
Over the last decade, AI has played a dynamic role in reshaping the insurance landscape and is starting to separate those firms doing it well from those struggling to compete. Automation and data-driven insight have been transforming risk assessment, fraud detection and delivering hyper-personalised services.
In fact, McKinsey research shows that AI leaders in insurance are outperforming their peers, and that over the last five years, the insurance sector’s AI leaders have created 6.1 times the total shareholder returns (TSR) of AI laggards (compared with just two to three times in most other sectors).
Beyond improving customer experience during the policy application process, AI adoption helps insurers accelerate claims processing, increase transparency, enhance cost-efficiency and ensure regulatory compliance: setting a new benchmark for modern insurance services.
By significantly reducing claims processing times from days to mere seconds, and cutting costs by up to 30%, AI is the game changer for insurance.
The biggest challenges for insurance firms
Efficiency is everything for the insurance sector, as it saves critical time for employees to carry out tasks and boosts customer satisfaction. Manually managing extensive paperwork can lead to a prolonged claims process, which can easily displace customers. Accenture estimates that poor claim experiences can cost the whole insurance sector as much as $170 billion in premiums by 2027.
Not only are manual processes conducive to human error, especially in peak periods, but they increase the difficulty in detecting complex frauds and limit the ability to personalise services. With intense competition and increasingly strict regulatory requirements, insurance firms are looking for ways to cut costs and differentiate their services whilst maintaining compliance with regulations.
A slow and cumbersome claims process is central to the challenges that face businesses in the insurance industry. With error-prone manual assessments part of underwriting and claims processes, this can lead to delays and inconsistent decisions. These granular administrative processes also require significant human resources, which means higher costs for training and quality assurance and increased operational costs.
The growing adoption of AI in insurance
The growing adoption of AI is steering the insurance industry towards a new era of smart operations. With advancements in machine learning, natural language processing and predictive modeling, insurers can now automate workflows, assess risks with greater accuracy and design more personalised products with faster time to value.
According to Deloitte, 76% of insurance companies have already adopted generative AI in at least one business function, highlighting AI’s role as a critical enabler of the industry’s transformation.
With rising customer expectations for fast and convenient service, more insurers are seeking agile and efficient technology solutions. AI not only helps insurers meet these demands, but it has also become a strategic differentiator.
Choosing the right intelligent automation platform
Finding a dedicated scalable and high-performance solution to tackle an insurer’s challenges is critical for successful modernisation of the claims process. For instance, FPT’s Insurance360 platform (or i360) is an end-to-end automation solution designed for underwriting and claim processing.
What’s needed is a centralised data management system that leverages AI, optical character recognition (OCR) that can change printed documents into digital image files, and Microsoft 365 technologies. This can help streamline back-office operations, speed up case processing and meet evolving compliance requirements.
Some core capabilities for an effective AI-powered end-to-end automated solution for claim processing include:
- Efficient Straight-Through Processing – i360 enables seamless STP for both underwriting and claims. It is an end-to-end AI-powered STP flow from receiving claim requests to making final claim decisions based on AI algorithms, combined with innovative rule-based engines. This accelerates claims handling with real-time assessment and decision-making
- An intelligent dashboard that provides insurers with end-to-end visibility and actionable insights across underwriting and claims processes.
- A provider portal system to handle the receipt of medical guaranteed requests from hospitals or clinics.
- Claim features on the customer application for customers to self-submit claim requests and manage claim histories.
- Accurate risk management – Through predictive modelling, i360 identifies potential risks, such as customers likely to lapse on premium payments. These insights enable insurers to take proactive measures, refine risk segmentation, and enhance overall portfolio quality.
- Flexible system integration: – Designed for flexibility, a platform that integrates seamlessly with existing core systems and can be tailored to specific operational requirements. Its modular architecture ensures rapid deployment while supporting long-term scalability and digital growth.
- A rule engine to configure and manage assessment rules, and to call and return assessment results for insurance benefit reimbursement or cashless claims.
- Support the claims department in managing and assessing healthcare benefits, making decisions, notifying results, and processing payments to provider partners.
Benefits of AI-powered claims processing
In underwriting, AI enables precise and automated risk assessments by integrating diverse data sources, such as customer records, financial profiles, and behavioural data. While traditional underwriting usually takes days to weeks, AI-powered Straight-Through Processing (STP) can drastically shorten processing times from days to seconds while maintaining claims assessment accuracy of over 99%. The use of online self-service significantly boosts operational efficiency and provides customers with a smoother policy experience, leading to faster policy issuance and claim settlements.
In fact, a world-leading insurance group headquartered in Asia digitally transformed 96% of customer services when it leveraged AI and other emerging technologies to implement a super app with partner FPT. The collaboration built a comprehensive, web and mobile-supported platform for insurer-customer interactions led to the insurer resolving 87% of customer inquiries in the first call and enhancing customer engagement with 9.2 million online registered customers.
By automating key functions such as document verification, fraud detection, and claims evaluation, AI transforms claims processing. An insurer can reduce their reliance on extensive human resources, leading to a significant reduction in operational costs of up to 30%. Being a cloud-based platform and utilising Azure Cloud can enhance flexibility and cost efficiency, meaning that resources can be scaled based on demands and strategically re-allocated for priority tasks and operations.
With more consistent and accurate underwriting and claims decisions, insurance firms can stay on top of compliance needs with regular audits and stringent data management processes, and using anonymised data to ensure customer privacy.
Modernising insurance through continuous innovation
Manual insurance claims processes easily lead to customer frustration, dissatisfaction and potential loss to competitors. Beyond this, lack of standardised, data-driven processes affect risk assessments, profitability and the bottom line.
Amid rising competition and customer expectations, AI is therefore essential to digital transformation and a business differentiator. An advanced AI-powered claims management platform empowers insurers with smart automation, precise insights, and flexible configurations, boosting the customer claims experience and overall financial performance in today’s competitive insurance landscape.
