An insurance provider collects premiums, oversees reserves, and handles claim payments. Traditionally actuaries have been using the claim data to aid them with calculations of premiums and reserves and to do actual vs. projected claims comparisons. A more significant position for actuaries in risk management is emerging today, and they are using technology to help fight the fraud and operational inefficiencies that plague the claims process.
Typical insurance firms store the information about their brokers and claims service providers in files, spreadsheets, and manual papers. The information is dispersed throughout multiple agencies and offices in various places and jurisdictions, thus there is a great risk that it may become outdated. Allowing the insurance company to standardize data collection based on data profiles in a single location available to all qualified corporate stakeholders via access profiles is one approach. Every third-party service provider has a profile where they may access and update their information.
The choice to replace the current claim management process with a technology solution is a significant undertaking that demands time, effort, and financial resources. Senior stakeholders must therefore approve the proposal and budget for it. The problems that need to be solved must then be identified with clarity in order to create a product specification document with workflow processes. Finally, there needs to be a buy-in from the actual employees that work with the claims on a day to day basis.
Auditability may benefit from blockchain’s immutability, and machine learning may be able to identify significant hazards that present algorithms are unable to. However, tried-and-true technology can already help with claim management; centralized databases and straightforward algorithms will be an improvement over scattered spreadsheets and manual procedures. To paraphrase it in a nutshell, the act is about managing the risks.
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