While straight-through processing isn’t new in the financial world, it is making a breakthrough in the insurance industry.
Anyone who’s ever applied for insurance or filed a claim knows that the process can be long and daunting. From underwriting to collections and every step in between, policyholders feel like they're jumping through hoops.
This is frustrating for everyone involved. But what if there was a better way?
Straight-through processing is designed to streamline and simplify the entire insurance process and stands to transform the landscape of how things are done.
Ready to learn more?
Let’s take a look at the role straight-through processing plays in the insurance industry and how to successfully implement it.
The Benefits of Using Straight-Through Processing
Straight-through processing is hailed as one of the best ways to automate and streamline any business, from banks to finance offices and even medical establishments.
So, what makes it so great? Let’s take a look.
Meet Growing Customer Expectations of Immediacy
Let’s face it. We live in a world of instant gratification and minimal patience. More and more customers are accustomed to fast results. And when they don’t get them, they take their business elsewhere.
Implementing STP for insurance companies could mean the difference between a sale and a loss. Customer service is paramount in any business and the insurance industry is no different.
Clients who have a single negative claims experience with their insurer are more likely to switch carriers.
The bottom line is, customer expectations are becoming more demanding and STP is one of the only scalable ways to help you retain your current client base.
A few things to keep in mind when improving the customer experience include:
- Maintaining open lines of communication
- Employee knowledge and professionalism
- A speedy settlement process
- Offering a transparent and stress-free experience from start to finish
The ultimate goal of STP is a shorter claim and settlement process without direct adjustor involvement.
Reduce Human Involvement and Error
While some might argue that this is a downside of straight-through processing, in the end, it makes for seamless claims and settlement process for the customer.
Not only does reducing human involvement cut down on the risk of human error, but it also reduces overhead costs. But that doesn’t mean companies are eliminating human involvement altogether.
More complicated claims that result in serious injury still need human intervention. Basic claims like windshield repair or vehicle towing can benefit from straight-through processing.
Allow for More Focused Customer Attention
By nature, certain insurance claims need more hands-on, thorough attention. Other more common claims that involve minor injury and minimal payouts can easily be automated using STP.
This frees up your time and attention to focus on more complex claims with bigger price tags. Another benefit is that those customers with smaller claims aren't made to wait for their settlement.
Claims with basic information can be handled almost immediately, keeping customers happy and your workflow moving.
This also helps maintain transparency and consistency throughout the entire process.
STP Addresses the "Graying of the Insurance Industry"
Like with any transition in life, certain waves of professionals are moving through the insurance industry. The first generation of insurance adjustors is quickly approaching retirement age.
So, what does this mean for the industry? While it does mean a fresh group of eager adjustors are entering the workforce, it also means less experience, carelessness, and a loss of knowledgeable professionals.
This lack of attention to detail can lead to undetected fraud, shortcuts, and less thorough investigations.
Straight-through processing can help fill this gap.
Although you can't replace the experience and intuition provided by seasoned professionals, STP can help collect and store some of this knowledge and prior experience for future generations.
Artificial Intelligence (AI) algorithms and best practices can help establish more consistent business models down the line. It also makes for faster, easier, processing that reduces time wasted and overhead costs.
Ways to Implement Straight-Through Processing on the Job
Now that you have a better understanding of the STP process, it's time to implement these best practices.
Some aspects of the insurance claims process are far too complicated for the current STP configuration. That's why it's important to start small and with the basics.
Data Collection
This is one of the most notable features of any STP system. Data collection is made simple and the information gathered is put to good use.
When handling car accidents, telematics can collect data from the scene and download it directly into your system, triggering the first notice of loss entry.
Victims can easily snap photos at the scene of damage to both themselves and the vehicle and send them directly to the insurance company.
Not only does STP utilize newly collected data but also historical data in your system. By evaluating previous claims and settlements, the system can estimate and manage the quality and cost of potential repairs.
Artificial Intelligence
AI is everywhere – and it has a place in the insurance process as well.
The home insurance industry is utilizing the help of drones to collect valuable information and footage of homeowner damage immediately following an incident. Drones have access to photographs and video footage that homeowners and adjusters simply can't reach.
Artificial intelligence is also being used to scan claims for fraud. On the flip-side, robotic automation allows certain claims that fall within pre-approved financial guidelines to receive instant payouts.
Let STP Help You and Your Customers
Change can be difficult. But when discussing straight-through processing, it means a simpler way of doing business for everyone.
Not only will it help streamline your everyday processes, but it'll deliver the fast results customers have grown to expect.
STP is the only scalable way to accelerate the claims process and retain clients without sacrificing quality.
As a TPA, Gallagher Bassett works with insurers, brokers, government bodies and self-insured organisations to integrate emerging technologies into the claims process to give the best possible outcomes for clients.
Are you ready to get started with straight-through processing and discover its many benefits?
Contact our professionals today to learn more about the services we offer in your area.
