RPA case study for claims processing

1. Background
The client is a global multiline insurance companywhich has core service offerings inGeneral Insurance, Life andFarmers. It employs more than50,000 people worldwide serving customers inmore than170 countries and territoriesaround
the globe.
One of the keyaspects of customer satisfaction is timelyandaccurate settlementof the claim payments.
The client’s claim payments team forthe US geographyis a 300 memberteamwhichhandles the payment processing forall claim settlements across businesslines.
This particular activityis handledbyanoffshore vendor and the client is lookingto drive processefficiencies throughvarious digital levers.
We have beenentrusteduponbythe client to understandthe process, advise themaboutthe improvementopportunitiesanddraw the actionplanfor execution.
Following are the key asks of the client for the Claim Payments team:
Increaseefficiencyof the process byoptimizingthe total number ofresources
100% accuracyof payments since the error rate of payments has beenaround15% inthe lastone year whichhas ledto lot of customer dissatisfactionandescalations
Improve touch-less processingas muchas possible (ina 24*7 environment)
Complywithindustryregulations
Reduce exceptions
Improve overallscalabilityto other geographies while looking at the growingmarket size
Process Details:
The processstarts withthe upstream claim handling team taking over the First notificationoflossrecordandassigning the evaluator.
Once the Claimhandler gets the required inputs fromevaluator andis able toadjudicate, she arrives at the amount to be paidandher team works onfilling out the detailsona payment request form (PRF) whichis thensent over to the
offshore payments teamfor processing.
The offshore agent goesthrough the PRF andafterdoingthe requireddue diligence, she processesthe request furtherforpayment.
There are 3 paymentruns ina given dayandbased onthe processedrequests the payments goout to the claimants.
The mode inwhichthe agents receive the PRF varies for the type of business line (General liability/ AutoClaim/Workers Compensationetc)andthe infrastructure set upin the respective Claimhandler’s office inthe onshore locations.
Useful Data:
Average Handling time forprocessing one PRF:6.5 mins per transaction
Volumes handled(Monthly)
Workers Compensation Payments:220,000
General LiabilityPayments:115,000
Auto Payments:80,000
SpecialityClaim Payments:38,000
Other Claims:65,000
Percentage of Exceptions:18%
ErrorPercentage:15%
Compliance toRegulatoryPractices:95% complied(Opportunityto improve upto100% whichis the desiredlevel)

2. Core services
Farmers
Life
General
Insurance
Employees
50K+
Countries
170+
One of the keyaspects of customer satisfaction is timelyand accurate settlementof the
claim payments.
© 2020 Nik ChawC&A,All rightsreserved.Legal Notices.
Traditional
Business
Model
Customer
Engagement
and
Experience
Business
Process
Outsourcing
Productor
Service

3. © 2020 Nik ChawC&A,All rightsreserved.Legal Notices.
Ecosystem and
Business Model
Business
Process
Transformation
Product or
Service
Digitization
Customer
Engagement
and Experience
IT and Delivery
Transformation
Organizational
Value add
Digital
Transformation
Strategy

4. © 2020 Nik ChawC&A,All rightsreserved.Legal Notices.
Increaseefficiency
of the processby
optimizingthe
total number of
resources
518000 PRFs processed
monthly with an AHT of
6.5 mins per PRF
1. Traditional claimsprocessing
backend operationsrequireslot
of manual laborwhich makes
the data & processdependent,
proneto errors,dataloss,
difficultto retrieve,unreliable,
timeconsumingandcomplex.
2. Such backendjobswhen
outsourced to third party or to
a differentGeography become
morecomplex and situationof
data breachor compliancecan
lead to further headache.
3. All thesefactorseventually
lead to increased costsand
additional quality check
practicesin turnmore
resourcesarerequired.
Moreover,itinvolveslayersof
administrative,managerial,and
CRMfunctions,leadingto
escalations,delayinresolutions
or impactscustomer
experience.
4. Paper,electronic
documents,images,emails,and
sometimes even thelegacy
ERPs handlingdifferentstages
of the processaredifferentand
notintegrated.Theresultisa
distinctlack of reliability and
accountability.
70-80%of all rule-basedbusinessprocessescan be
automated.In case,weimplementnewSAAS or CloudBased
ERP we will beableto automate100%completeprocess.
An application forthecustomer or thewebsitewillbe
designed forthecustomer to fill in theformusingAPIand
central cloudstorageAPI linked to SAAS or CloudERP.
SoftwareDevelopmentplanningalongwith Artificial
IntelligenceuseandRPAimplementation existinginternal
processes.
Underwriting,claimsprocessingto customerservicewill be
doneafter doingfeasibility study,processstudy and
databasepreparationto understand currentapplicationof
Robotic ProcessAutomation andArtificial Intelligence
(RPA+AI).
Outsourcingto a differentGeographycan becostsaving
however streamlined processesandcentral databasewith
server located atourhomelocationcan bemorebeneficialin
caseof third party workingon theseclaims.SAAS or Cloud
based ERP can beusedfromany location.
SAAS or Cloud based ERP will becompliantenoughto be
used globally withoutimpactingany dataasthedatastored
will beata central location.Third partyusingthesoftware
won'thaverightsto extractor retrievethedata.
Benefits:
Better ROI on Your Staff
DetailedDataCapture
Flexibility
Improved Accuracy
Improved Throughput
Reduced CycleTimes
Scalability
SAAS Based ERP Tool,Advanced AutomationWFMTool,
Artificial Intelligence& RPASoftware
1. Automated extractionof datafromemailsorsubmission
forms intoclaimsprocessingsystemwhichisdirectly linked
with SAAS based software.Itcan beAPI linkedwebformas
well.
2. InbuiltBOTwill verifycoverage,other account
informationinpolicy administration system.
3. Integrated BOTwill provideclaimstatusupdatesto
customersby wayof notificationor email.
4. AI scripted BOTcan initiatecustomerrequestsby
readingemails,and extractingdatafromPDF,Scanneddoc,
other reliablesourceof tools.
5. BOTcan quicklyestablish itsown databasegathered out
of customer accountinformation.
6. BOTwill betrained and scripted to completecustomer
accountrequests,identify risks,fraudrelated issues,
includingclaimstatusupdates,coverageclarification,
withdrawals/surrenders,premiumpaymentplan changes,
etc.
7. AI scripted BOTcan extractkey terms frominsurance
policiesand reinsuranceagreements.Itcan combineor
match policy coverage/exposuredata.
8. BOTcan betrained to preparereportssummarizing
incomingclaimvolumesand task assignmentsbased on the
historical data.
9. AI BOTcan estimateor predictfuturedatabased on the
activenumberof customerpolicies.
Assumptions:
Timeand Cost+Benefitstudycannot
be doneunlessprocessmaturity
model is notprepared.Hence,itis
assumed thatwehavegotthe
approvalto implementtheDigital
Transformation Strategy.
Inclusions:
SoftwareDeveloper who candevelop
a SAAS Based ERP considering
prototypemodel or minimumviable
product.
BusinessProcessManagementSME
can design,analyze,eliminate,
integratetheprocessand preparea
ProcessMaturity Model to implement
RPAand Digital Transformation
strategy.
BOTDeveloper who can developan
automationsolutionusingavailable
RPAtools inthemarket.
ProcessImprovementExpertcan
study thetraditional processesand
derivefinancial outputin order to
identify thecompleteROI eventually
in longrunafter theautomated
digital transformation iscomplete.
Exclusions:
Citrixenvironmentisnotfeasiblein
the caseof automationandthesame
will bedonein real environment.
100%accuracyof
payments since
the error rateof
payments has
been around 15%
in thelastone
year whichhasled
to lotof customer
dissatisfaction and
escalations
Error Percentage:15%
Improvetouch-
less processingas
much as possible
(in a 24*7
environment)
Manual DataEntry,
forms processingor
paymentprocessing
ReduceexceptionsPercentageof
Exceptions:18%
Comply with
industry
regulations
Complianceto
Regulatory Practices:
95%complied
(Opportunity to improve
upto 100%which isthe
desired level)
Improveoverall
scalability to other
geographieswhile
lookingatthe
growingmarket
size
Offshorevendorhas
300 FTEs who handle
the paymentprocessing
for all claimsettlements
acrossbusinesslinesfor
US Geography

5. Process
Inputs
Tools Internal
SharePoint
PDF/Image
Scanner
Legacy ERPMS Office
Notes
Output
Itis then sent
over to the
offshoreteamfor
processing
✓ Processer schedule
Email &
Webform
Upstreamclaim
handlingteamreviews
firstnotification of loss
record
x min
teamworks on fillingout
the detailson a payment
requestform(PRF)
Insurance Data Entry/Logging Method
✓Manual entry into order booked register (Excel)
Additional information
✓Not Available
Scope for improvement
✓Central Cloud-Web based utility to maintain data log/entry, task
schedule & assignment
✓Automate more and more internal backendoperational tasks
✓Eliminate legacy ERP and other tools
✓ Manually check
stockavailable in
stockregister
(excel)
Assignsitto
the Evaluator
Challenges
Through Email or
any other channel
inputs from
evaluatorto
claimhandler
ClaimHandler
adjudicates
Data
discrepancy
Rejects
Insurance
claim
Confirmsthe
amountto be
paid or not
no
yes
✓ Processer schedule
✓Manual Entry Claims
✓Traditional complex manual process for task scheduling, data entry, claims processing
✓Legacy ERP Tool slow, lack of data retrieval and data loss issues
✓Electronic Claims
✓Direct Data Entry
processesthe
requestfurther
for payment
Offshoreagentgoes
through thePRF
after doingtherequired due
diligence Processes
✓Manual entry into order booked register ( Legacy ERP)
x min
x min
✓ Reviewer schedule✓ ClaimsTeam schedule
✓Manual fetching data from PDF/Image to Excel then uploading it to Legacy ERP
C L A I M A N T
P RO DU C T I O N C O N T RO L
Received PRF varies for the type - General
liability/ AutoClaim/Workers Compensation
3 payment runs in a day & based on the processed
requests the payments go out to the claimants
As
Is
© 2020 Nik ChawC&A,All rightsreserved.Legal Notices.

6. Process
Inputs
Tools Internal
SharePoint
Bot Dev
SoftwareMS Office SAAS Based
ERP
Notes
Output
x min
Insurance Data Entry/Logging Method
Additional information
✓Process Mining required
Scope for improvement
✓Web based utility tomaintain datainput, data retrieval, or extraction
✓Central web based program to connect and BOT will be implemented
further claims processing
Challenges
Email or Webform
channel only
✓Initial process study will consume time, cost and require extensive cross functional collaboration
✓ROI will take considerable time lapse
✓Extensive resourcingand budgeting management required
✓Customer will use an APP or E-mail or Web-form
x min
x min
✓Process Maturity Model required
✓Feasibility Study required
C L A I M A N T
B O T C O N T R O L L E D E N V I R O N M E N T
More than 3 payment runs in a day & based on the
processed requests the payments go out to the claimants
✓Artificial Intelligent data reading & extraction
✓SAAS Based Cloud ERP is more secured for data input using
BOT with single central database storage server/system
To
Be
Email orWebformClaimRequestsdirectly
visiblein ERP & BotINPUTS data to create
new claimfiles
BOTVERIFIES coveragein
policy adminsystem
CLAIMADJUSTERfocuseson claimadjudication
and bots providestatusupdates to customers
BOTPROCESSES customer requestfor
INSURER’S accountinformation
BotHandlesEmail orWebformNew
ClaimRequestsalongwith Account
informationprocessing
Botwill performcustomeraccountrequests,includingclaim
status updates,coverageclarification,premiumpaymentplan
changes,cash valuewithdrawals/surrenders,etc.
BOTCONFIRMS statusof open claimor initiatesnew
claim
✓SAAS Based ERP can be accessed from anywhere
on tablet & PC
© 2020 Nik ChawC&A,All rightsreserved.Legal Notices.

7. Thank You
© 2020 Nik Chaw C&A, All rights reserved. Legal Notices.
80%
RPA Expansion to AI
“By 2022,80% of organizations that deployedRPAwill introduce AI …”
— Gartner
$6.6T
ProductivityGrowth
…that AI will contribute to global economy by 2030
— PwC Research
25-40%
Cost Savings
…in business processes drivenby intelligent automation
— Deloitte We are saving132,000 hours annually by
implementing RPAto perform460 tasks across the
company. —DAI-ICHILIFE