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For over a decade, we’ve been aiming to be paperless. We tout the fact that filing cabinets, specialized 7-part file folders, and bulk mail rooms have been eliminated and reduced, and we affirm that we are paperless. But we know it’s not real. Today’s paper is PDF, Excel and Adobe. Filing cabinets have been replaced with digital folders and mail rooms with digital email and workflows. But in truth, we have been fooling ourselves. Insurance is not paperless; it just pretends to be. However, it doesn’t have to be that way. The technology to become truly digital exists. We just have to take the leap.
One of the biggest hurdles to being truly digital rather than a digital paper industry involves the initial ingestion or digitization of data. We’ve had advanced OCR and computer vision solutions for a while. These have been great for extracting information from digital forms and standardized templates, but have not been adequate for the needs of more complex businesses, such as commercial insurance filings.
The typical new commercial insurance business filing or request for quote may contain an application, loss statements, statement of values, certificates of insurance, financial statements, and many other documents, depending on the type of insurance. A typical commercial insurance presentation will contain between 300 and 500 pieces of information. Information that is invaluable in understanding, evaluating, and pricing a part of the business.
The untapped potential of dark data
Our current processes for extracting the data from these shipments are archaic. A typical process involves routing the shipment to a lower cost resource, often overseas, which will extract a minimal set of fields to configure the shipment and some basic qualification information. On a good day, they could extract and convert 50 of the 500 pieces of information into digital data by entering it into the system. The rest is left in the documents as dark data. Data that carriers have, but is never digitally exposed or available. The electronic file, containing the electronic documents, is then sent to the subscriber, where these digital documents are opened over and over again because the data is not available. Other than the file folder and documents being made of bits and bytes instead of paper and ink, it’s the same process as 300 years ago.
It does not have to be this way. We have seen what insurance with speed, efficiency and precision can become when the process is digital with simpler and more homogeneous risks in personal lines, but the promise is there for more complex insurance such as Group Benefits, Commercial Lines and Specialty Insurance. And it starts with being able to digitally ingest the data.
And this is where we have seen a technological leap. With the integration of more advanced machine learning tools that can combine natural language processing with computer vision, data can now be extracted from structured and unstructured documents with high degrees of accuracy and speed. In fact, this is one of the hottest emerging technology areas in insurance today with a wide range of players and investors. Take the case of a life insurer in China that implemented an intelligent risk management system that enables end-to-end automation of insurance applications. (Page 11, Power the future of insurance)
Learn from emerging leaders
One of the other emerging leaders in this space is a company called MEA from the UK. What makes MEA unique is that it was founded by insurance executives who understand the unique challenges involved in complex insurance documents, as well as a key understanding of the terminology, variability and complexity involved. Their solution has specifically focused on building a wealth of experience and a broad insurance-specific extraction catalog around insurance basics, starting with the submission of documents that allow their solution to adapt very quickly to new areas of insurance. The best part is that because their team has a deep understanding of insurance, working with them doesn’t require you to train your team on what insurance means.
We have worked with MEA on various engagements and trials in Europe and the US. The breadth of their solution has allowed us to assess a wide range of lines of business, business processes and insurance entities, including carriers, MGAs and brokers. What we have found is that they can consistently compete in terms of speed, accuracy, and quality in their testing and execution. It really is possible to go from testing to using this type of solution in just a few months.
So what does this mean for our world of digital paper today? Well, it means that insurers now have a real option to start a digital journey. This has been the hope and dream for a while, but technology has really caught up with that vision of going digital, starting with smart ingest.
Creating truly contactless processes
There are several different ways to employ it now. It starts by identifying a pseudo-paperless process that exists in your organization today and targeting the documents you ingest. Submissions are an obvious choice, but claims, bordereaux, invoice receipts, audits, etc. are also possible. Then design how you want the digital process to work. You can choose to directly ingest and process the data or take a more cautious approach that still includes some level of human review or human insight. The choice should depend on the complexity and importance of the data and your comfort in implementing it, but in the long run you should expect that at least some of your ingest can be contactless. The other decision you have to make is whether you are only going to extract the data you use today or whether you want to extract the entire document. This is the 50 vs. 500 question for shipping. But doing that may require some other changes and other technology to help a true digital transformation. We will discuss those elements in a future blog.
In the meantime though, isn’t it about time your insurance process wasn’t 17th century anymore? Isn’t it time we moved from digital paper in email and workflow systems to building truly digital processes? Isn’t it time to start building your company’s smart ingest solution? Let’s start building real digital insurance.
Power the future of insurance: Modernizing technology, such as artificial intelligence and cloud-powered data analytics, helps insurers drive profitable growth through both increased revenue and reduced costs .
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