How COVID-19 is Reshaping the InsurTech Industry
From large payouts and losses in some segments to rapid growth in others, the insurance industry has experienced seismic shifts due to the COVID-19 global pandemic. To keep some semblance of normalcy during these changes and the aftermath, organizations are turning to InsurTech solutions for help.
According to Deloitte, InsurTech investments remain strong, with COVID-19 simply shifting priorities to virtual customer engagement and operational efficiency rather than cutting budgets. Data collected by Venture Scanner indicates that the global InsurTech market generated $2.2B in the first half of 2020.
The Challenge of Advancing a Product to Meet Immediate Needs
Tasks once completed manually at insurance companies can bottleneck an entire system in just a few days and prevent insurers from winning much-needed revenue. For this reason, providers are scrambling to make fast efficiency gains while minimizing risks that could lead to unrealized business opportunities due to slow processing. When it’s feast or famine, with customers either signing up or making claims in droves, there’s no time to waste.
As a product developer in the InsurTech space, this puts you in a precarious position. After all, how can you add functionality overnight when it takes time to build those new capabilities? While some organizations may have the available workforce to rally and build new features quickly, most don’t.
If you’re like most in the development space, finding and retaining talent is a challenge. What’s more, they’re likely already looking at a project backlog spanning many months—if not years. For this reason, augmenting existing solutions with white-label, third-party plug-ins is an attractive option. Now, let’s turn our attention to the type of functionality insurers need to navigate recent shifts.
4 Essential Capabilities for the Insurance Industry in the Wake of COVID-19
Pew Research found that by June of 2020 roughly 3% of Americans had already made a mass exodus from highly populated areas like New York, New York and San Francisco, California due to challenges posed by the COVID-19 global pandemic. This number has likely grown since June and will likely continue to grow as hubs of economic growth continue to shift and settle.
For each insured individual that moves and retains insurance coverage, there’s paperwork. For many, they’ll even switch providers as their previous provider may not be able to provide competitive rates in their new location. The sheer change-management involved in migrations of this scale is daunting. Without the ability to process requests faster, insurance companies could find themselves struggling to keep up.
To help your insurance industry clients effectively navigate the road ahead, your applications need to include greater data-capture, data-conversion, and optical character recognition technologies that reduce the need for manual intervention in document processing.
1. Data Capture Efficiency
As the number of file formats increases, insurance organizations need the ability to quickly capture and process hundreds of different image formats. Beyond simply capturing them, they often also need to aggregate and convert those multiple formats into a single, secure, and digitally accessible PDF.
Rather than trying to build everything from scratch, sometimes partnering with a third-party software developer can give you a leg up on all the delivery time associated with expanding feature sets for the insurance industry.
Essential Capabilities Should Include:
- Support for multiple file formats
- Automated image-correction and optical character recognition technology
- Clean integration that maintains or improves processing speed
Once data is captured, it then needs to be managed. To explore document management capabilities to consider when expanding your feature set for the insurance industry, click here.
2. Identify Form Fields
Whether potential buyers are requesting new policies or current customers are evaluating existing policies, precise and efficient data-capture technologies can improve the ability of insurers to access important data and analyze policies. Adding these capabilities requires quite a bit of strategy. First, one must consider the core challenges involved in effective data capture:
- Poor inputs that aren’t easy to correct and capture
- Poorly designed forms that reduce image recognition success
- Imaging technology that can’t recognize a robust number of file formats and fonts
When contemplating the structure of boxes for character collection, our experts found that using a square shape rather than a rectangle results in less data loss. While rectangles may, at first, appear to save space and therefore be a more effective option, research showed that they typically don’t provide the average user enough space to clearly write letters or characters without interfacing with the boundary lines. Thus, square boxes improve data transfer success.
Figure 1: Examples of ineffective rectangular boxes versus effective square boxes for character capture.
This is just one factor to consider when streamlining form processing within an insurance technology application. To explore more research on this topic, download the Best Practices: Improving ICR Accuracy with Better Form Design whitepaper.
3. Confidence Value Reporting for Data Recognition
Not all optical character recognition technology is created equal. That’s why it’s important to make sure any solution you either create internally or partner with a third party to integrate provides ongoing confidence value reporting for data recognition. Having this capability in place can alert you to problems before they lead to costly issues — like duplicated efforts, a poor customer experience, or incomplete data hindering contract processing.
4. Use OCR to Identify Different Documents
Optical character recognition (OCR) can help insurance companies cut down on manual effort by identifying different forms automatically, which equips application developers like you to create automation within your company’s product that routes identified forms through predefined workflows.
Without OCR, significant manual effort is required to process forms required to execute insurance contracts. When evaluating OCR capabilities to add to applications, keep in mind these essentials:
- Successful Character Recognition Rates – Given the highly regulated nature of insurance along with high fines for shortcomings, it’s often well worth the extra investment to get a solution with 99% accuracy versus 95%.
- Multi-Document Recognition with High Confidence Values– Given the broad number of file types insurance organizations receive, having a software package in place that cleans up documents before running them through optical character recognition tools improves the likelihood of extracted data being usable. With cleaner data in hand, insurance agents are empowered to make better recommendations to customers, ensuring they’re not over or under insured.
These are just a few items to consider when adding document viewing and forms processing features to your application. While automated workflows may have given organizations heartburn in the past, the reality is that high-volume, fast-changing environments can’t survive without them. Markets are changing so quickly that without automation to help bring order to the chaos, the tidal wave of requests will overtake the underprepared.
Help your clients better respond to not only COVID-19, but also future-proof their ability to streamline claims by expanding document viewing and form processing capabilities. To learn more about our insurtech capabilities, explore our content solutions for insurance companies.