RPA case study for claims processing
- 1. Background The client is a global multiline insurance companywhich has core service offerings inGeneral Insurance, Life andFarmers. It employs more than50,000 people worldwide serving customers inmore than170 countries and territoriesaround the globe. One of the keyaspects of customer satisfaction is timelyandaccurate settlementof the claim payments. The client’s claim payments team forthe US geographyis a 300 memberteamwhichhandles the payment processing forall claim settlements across businesslines. This particular activityis handledbyanoffshore vendor and the client is lookingto drive processefficiencies throughvarious digital levers. We have beenentrusteduponbythe client to understandthe process, advise themaboutthe improvementopportunitiesanddraw the actionplanfor execution. Following are the key asks of the client for the Claim Payments team: Increaseefficiencyof the process byoptimizingthe total number ofresources 100% accuracyof payments since the error rate of payments has beenaround15% inthe lastone year whichhas ledto lot of customer dissatisfactionandescalations Improve touch-less processingas muchas possible (ina 24*7 environment) Complywithindustryregulations Reduce exceptions Improve overallscalabilityto other geographies while looking at the growingmarket size Process Details: The processstarts withthe upstream claim handling team taking over the First notificationoflossrecordandassigning the evaluator. Once the Claimhandler gets the required inputs fromevaluator andis able toadjudicate, she arrives at the amount to be paidandher team works onfilling out the detailsona payment request form (PRF) whichis thensent over to the offshore payments teamfor processing. The offshore agent goesthrough the PRF andafterdoingthe requireddue diligence, she processesthe request furtherforpayment. There are 3 paymentruns ina given dayandbased onthe processedrequests the payments goout to the claimants. The mode inwhichthe agents receive the PRF varies for the type of business line (General liability/ AutoClaim/Workers Compensationetc)andthe infrastructure set upin the respective Claimhandler’s office inthe onshore locations. Useful Data: Average Handling time forprocessing one PRF:6.5 mins per transaction Volumes handled(Monthly) Workers Compensation Payments:220,000 General LiabilityPayments:115,000 Auto Payments:80,000 SpecialityClaim Payments:38,000 Other Claims:65,000 Percentage of Exceptions:18% ErrorPercentage:15% Compliance toRegulatoryPractices:95% complied(Opportunityto improve upto100% whichis the desiredlevel)
- 2. Core services Farmers Life General Insurance Employees 50K+ Countries 170+ One of the keyaspects of customer satisfaction is timelyand accurate settlementof the claim payments. © 2020 Nik ChawC&A,All rightsreserved.Legal Notices. Traditional Business Model Customer Engagement and Experience Business Process Outsourcing Productor Service
- 3. © 2020 Nik ChawC&A,All rightsreserved.Legal Notices. Ecosystem and Business Model Business Process Transformation Product or Service Digitization Customer Engagement and Experience IT and Delivery Transformation Organizational Value add Digital Transformation Strategy
- 4. © 2020 Nik ChawC&A,All rightsreserved.Legal Notices. Increaseefficiency of the processby optimizingthe total number of resources 518000 PRFs processed monthly with an AHT of 6.5 mins per PRF 1. Traditional claimsprocessing backend operationsrequireslot of manual laborwhich makes the data & processdependent, proneto errors,dataloss, difficultto retrieve,unreliable, timeconsumingandcomplex. 2. Such backendjobswhen outsourced to third party or to a differentGeography become morecomplex and situationof data breachor compliancecan lead to further headache. 3. All thesefactorseventually lead to increased costsand additional quality check practicesin turnmore resourcesarerequired. Moreover,itinvolveslayersof administrative,managerial,and CRMfunctions,leadingto escalations,delayinresolutions or impactscustomer experience. 4. Paper,electronic documents,images,emails,and sometimes even thelegacy ERPs handlingdifferentstages of the processaredifferentand notintegrated.Theresultisa distinctlack of reliability and accountability. 70-80%of all rule-basedbusinessprocessescan be automated.In case,weimplementnewSAAS or CloudBased ERP we will beableto automate100%completeprocess. An application forthecustomer or thewebsitewillbe designed forthecustomer to fill in theformusingAPIand central cloudstorageAPI linked to SAAS or CloudERP. SoftwareDevelopmentplanningalongwith Artificial IntelligenceuseandRPAimplementation existinginternal processes. Underwriting,claimsprocessingto customerservicewill be doneafter doingfeasibility study,processstudy and databasepreparationto understand currentapplicationof Robotic ProcessAutomation andArtificial Intelligence (RPA+AI). Outsourcingto a differentGeographycan becostsaving however streamlined processesandcentral databasewith server located atourhomelocationcan bemorebeneficialin caseof third party workingon theseclaims.SAAS or Cloud based ERP can beusedfromany location. SAAS or Cloud based ERP will becompliantenoughto be used globally withoutimpactingany dataasthedatastored will beata central location.Third partyusingthesoftware won'thaverightsto extractor retrievethedata. Benefits: Better ROI on Your Staff DetailedDataCapture Flexibility Improved Accuracy Improved Throughput Reduced CycleTimes Scalability SAAS Based ERP Tool,Advanced AutomationWFMTool, Artificial Intelligence& RPASoftware 1. Automated extractionof datafromemailsorsubmission forms intoclaimsprocessingsystemwhichisdirectly linked with SAAS based software.Itcan beAPI linkedwebformas well. 2. InbuiltBOTwill verifycoverage,other account informationinpolicy administration system. 3. Integrated BOTwill provideclaimstatusupdatesto customersby wayof notificationor email. 4. AI scripted BOTcan initiatecustomerrequestsby readingemails,and extractingdatafromPDF,Scanneddoc, other reliablesourceof tools. 5. BOTcan quicklyestablish itsown databasegathered out of customer accountinformation. 6. BOTwill betrained and scripted to completecustomer accountrequests,identify risks,fraudrelated issues, includingclaimstatusupdates,coverageclarification, withdrawals/surrenders,premiumpaymentplan changes, etc. 7. AI scripted BOTcan extractkey terms frominsurance policiesand reinsuranceagreements.Itcan combineor match policy coverage/exposuredata. 8. BOTcan betrained to preparereportssummarizing incomingclaimvolumesand task assignmentsbased on the historical data. 9. AI BOTcan estimateor predictfuturedatabased on the activenumberof customerpolicies. Assumptions: Timeand Cost+Benefitstudycannot be doneunlessprocessmaturity model is notprepared.Hence,itis assumed thatwehavegotthe approvalto implementtheDigital Transformation Strategy. Inclusions: SoftwareDeveloper who candevelop a SAAS Based ERP considering prototypemodel or minimumviable product. BusinessProcessManagementSME can design,analyze,eliminate, integratetheprocessand preparea ProcessMaturity Model to implement RPAand Digital Transformation strategy. BOTDeveloper who can developan automationsolutionusingavailable RPAtools inthemarket. ProcessImprovementExpertcan study thetraditional processesand derivefinancial outputin order to identify thecompleteROI eventually in longrunafter theautomated digital transformation iscomplete. Exclusions: Citrixenvironmentisnotfeasiblein the caseof automationandthesame will bedonein real environment. 100%accuracyof payments since the error rateof payments has been around 15% in thelastone year whichhasled to lotof customer dissatisfaction and escalations Error Percentage:15% Improvetouch- less processingas much as possible (in a 24*7 environment) Manual DataEntry, forms processingor paymentprocessing ReduceexceptionsPercentageof Exceptions:18% Comply with industry regulations Complianceto Regulatory Practices: 95%complied (Opportunity to improve upto 100%which isthe desired level) Improveoverall scalability to other geographieswhile lookingatthe growingmarket size Offshorevendorhas 300 FTEs who handle the paymentprocessing for all claimsettlements acrossbusinesslinesfor US Geography
- 5. Process Inputs Tools Internal SharePoint PDF/Image Scanner Legacy ERPMS Office Notes Output Itis then sent over to the offshoreteamfor processing ✓ Processer schedule Email & Webform Upstreamclaim handlingteamreviews firstnotification of loss record x min teamworks on fillingout the detailson a payment requestform(PRF) Insurance Data Entry/Logging Method ✓Manual entry into order booked register (Excel) Additional information ✓Not Available Scope for improvement ✓Central Cloud-Web based utility to maintain data log/entry, task schedule & assignment ✓Automate more and more internal backendoperational tasks ✓Eliminate legacy ERP and other tools ✓ Manually check stockavailable in stockregister (excel) Assignsitto the Evaluator Challenges Through Email or any other channel inputs from evaluatorto claimhandler ClaimHandler adjudicates Data discrepancy Rejects Insurance claim Confirmsthe amountto be paid or not no yes ✓ Processer schedule ✓Manual Entry Claims ✓Traditional complex manual process for task scheduling, data entry, claims processing ✓Legacy ERP Tool slow, lack of data retrieval and data loss issues ✓Electronic Claims ✓Direct Data Entry processesthe requestfurther for payment Offshoreagentgoes through thePRF after doingtherequired due diligence Processes ✓Manual entry into order booked register ( Legacy ERP) x min x min ✓ Reviewer schedule✓ ClaimsTeam schedule ✓Manual fetching data from PDF/Image to Excel then uploading it to Legacy ERP C L A I M A N T P RO DU C T I O N C O N T RO L Received PRF varies for the type - General liability/ AutoClaim/Workers Compensation 3 payment runs in a day & based on the processed requests the payments go out to the claimants As Is © 2020 Nik ChawC&A,All rightsreserved.Legal Notices.
- 6. Process Inputs Tools Internal SharePoint Bot Dev SoftwareMS Office SAAS Based ERP Notes Output x min Insurance Data Entry/Logging Method Additional information ✓Process Mining required Scope for improvement ✓Web based utility tomaintain datainput, data retrieval, or extraction ✓Central web based program to connect and BOT will be implemented further claims processing Challenges Email or Webform channel only ✓Initial process study will consume time, cost and require extensive cross functional collaboration ✓ROI will take considerable time lapse ✓Extensive resourcingand budgeting management required ✓Customer will use an APP or E-mail or Web-form x min x min ✓Process Maturity Model required ✓Feasibility Study required C L A I M A N T B O T C O N T R O L L E D E N V I R O N M E N T More than 3 payment runs in a day & based on the processed requests the payments go out to the claimants ✓Artificial Intelligent data reading & extraction ✓SAAS Based Cloud ERP is more secured for data input using BOT with single central database storage server/system To Be Email orWebformClaimRequestsdirectly visiblein ERP & BotINPUTS data to create new claimfiles BOTVERIFIES coveragein policy adminsystem CLAIMADJUSTERfocuseson claimadjudication and bots providestatusupdates to customers BOTPROCESSES customer requestfor INSURER’S accountinformation BotHandlesEmail orWebformNew ClaimRequestsalongwith Account informationprocessing Botwill performcustomeraccountrequests,includingclaim status updates,coverageclarification,premiumpaymentplan changes,cash valuewithdrawals/surrenders,etc. BOTCONFIRMS statusof open claimor initiatesnew claim ✓SAAS Based ERP can be accessed from anywhere on tablet & PC © 2020 Nik ChawC&A,All rightsreserved.Legal Notices.
- 7. Thank You © 2020 Nik Chaw C&A, All rights reserved. Legal Notices. 80% RPA Expansion to AI “By 2022,80% of organizations that deployedRPAwill introduce AI …” — Gartner $6.6T ProductivityGrowth …that AI will contribute to global economy by 2030 — PwC Research 25-40% Cost Savings …in business processes drivenby intelligent automation — Deloitte We are saving132,000 hours annually by implementing RPAto perform460 tasks across the company. —DAI-ICHILIFE