For insurers which are already struggling to retain customers, a bad first engagement can cost them dearly. Unfortunately, Manual First Notice of Loss (FNOL) processes continue to plague the industry and result in inaccurate data, slow turnaround times, and ultimately customer churn. Ensuring claims are captured, processed and settled quickly and efficiently is key to holding on to customers who might otherwise be enticed by more agile providers.
Insurers are facing competition from every quarter and not just from the more nimble InsurTechs. New research shows that 27% of consumers are likely to buy insurance from big tech companies like Amazon and Google and 24% from big retailers. It’s clear that traditional insurers must look to boost efficiencies, and this means moving away from their manual-heavy administrative pasts.
The claims process, and the First Notice of Loss (FNOL) in particular, is the first real interaction initiated by an insured party after sign-up and holds the key to how customers view their insurer. However, for today’s insurers, the existing manual FNOL process is already giving rise to significant challenges in a digital-first world.
One of the biggest challenges facing legacy systems based on manual FNOL processes is the creation of unstructured and variable data. Every claims officer can testify that each claim will have elements that are unique to the event. Even standardized documentation – which remains depressingly uncommon in the industry – will have elements which require at least a small amount of human interpretation, and this can lead to mistakes.
Another challenge is that the insurance industry remains at the mercy of an increasingly unpredictable world. A rapidly shifting climate and unstable socio-political environments have led to spikes in claims volumes and placed stress on the entire claims lifecycle. While unavoidable, the increase in volumes result in slower response times which is not optimal for customers who are depending on their service providers to help them get back on the road or replace the roof over their heads.
What’s more, as high-value claims increase, under-resourced claims departments can’t always pay close attention to high-volume, low-value claims, creating an environment ripe for fraudulent submissions.
The results of manual FNOL processes go far beyond just fraud losses. Inaccurate data at the start of the claims process will also impact reporting and can hurt how insurers provision for their reserve requirements. More importantly, the back and forth as a result of bad data can significantly slow the resolution of claims or even result in claims being erroneously denied, leaving customers frustrated at best, and ready to search for a new insurer at worst.
A big part of the solution lies in minimizing human input at the outset by automating as much of the process as possible.
Automating the intake of unstructured data results in big improvements in efficiency. By automating the capture and extraction of information related to the FNOL, carriers can increase straight-thru-processing rates for claims. Automation reduces the time required to review and input information – often into multiple systems – and, by moving away from manual processes, claims can often be managed without adjuster involvement.
It is important to remember that while others in your insurance ecosystem may also not be completely automated, work done on your systems will allow them to also move faster. By digitizing the information and leveraging the Synatic solution, insurers can automate the triage, assignment, and coverage checks in the claims process, which have all been historical bottlenecks in the overall claims process.
We have seen, time and again, that properly automated FNOL speeds up the overall claims processes resulting in a better experience for the customer, often with more favorable outcomes as a result of accurate data.
There is no doubt that what happens at the beginning of the FNOL process sets the tone for the entire claims process. However, while customer satisfaction should be high on the agenda for any insurance provider, there can be no mistake that today’s consumers are much more interested in their claims being settled quickly and painlessly above any other considerations.
Recent insight from Gartner points out that customers are more loyal to insurers if they feel they are receiving great value rather than just good service. The company’s research shows that “if customers receive value enhancement during a service interaction, they have an 82% probability of staying with that organization when presented the opportunity to switch, an 86% probability of increasing their wallet share and a 97% probability of spreading positive word of mouth.” Improving the claims process at the FNOL stage creates an environment conducive to rapid settlement, which is what your customers want. To learn more about how you can increase the speed and efficiency of your FNOL process to, contact Synatic today.
