This is an update to the blog What Are the Benefits of Using OCR in the Insurance Industry?
Digitization has become more prominent with the emergence of cloud computing, mobile technologies and other technological advancements. These technologies are utilized in the insurance industry to provide better customer service, increase profits, and to remain competitive in the market. Insurance companies use Optical Character Recognition (OCR) software to automate scanning and for data extraction from claims. Earlier, insurance companies relied on manual entry of data, which is more labor intensive. But today with OCR technology, you can capture written or printed data from a large number of scanned insurance claim forms with high accuracy; it can even identify possible errors. A data entry company that offers OCR solutions could be a great support to insurance companies on the course of digitization and automation.
Why Insurance Companies Need OCR
OCR is an advanced technology that helps to replace manual scanning of insurance records and documents. Digitization of insurance records helps minimize the hassles of data process delays and data analysis.
- Digitizing paper claims forms: Insurance firms may find it difficult to answer simple questions about how to price their policies for maximum profit and how to accurately adjust claims for minimal leakage. This is due to the inability to access historical customer data that is stored in paper format. Digitization using AI-enabled OCR helps to extract valuable information from these records. Artificial intelligence could help claims adjusters reduce claims leakage by digitizing claim forms and images attached to them. OCR allows to convert each claim record into digital text and thus makes it machine readable. This can be fed into a machine learning algorithm and it would allow employees to search for specific information within these documents easily. This helps pull up historical claims form for property damages and it also reduces the time adjusters spend searching through paper documents for the same information. OCR software can also be used for image recognition – the images of damage can be classified by the severity of damage and by the compensation given to the customer for that damage. When such a classification is made, it can be used as a factor to calculate the optimum pay-out on a claim.
- Data extraction for underwriting: Digitization with OCR allows claim adjusters and underwriters to use natural language processing software to search various documents. Data exists in different formats in different systems across an insurance company’s divisions and branches. But with AI, it becomes easier to search through these disparate data sources. Data extraction and document search applications can be used to search through various documents. This helps the underwriter to have a better idea of their customers and make quick decisions about the customers. Insurance firms struggle to cater to millennial customers who expect a great level of speed congruent with their experience of growing up with the internet. They don’t find it necessary to show up at the physical location, instead they prefer to apply via chatbots or email and they want to start their policy as soon as possible. Data extraction with OCR helps insurance firms to speed up the underwriting and integrate it to give the insurance company an edge over their competitors.
Advantages of OCR in Insurance Industry
- Better Customer Service:
OCR helps to replace manual scanning of paper documents. Earlier, paper documents were scanned and converted to flattened digital image files followed by manual indexing on each document with human intervention. This could be error prone, inconsistent and expensive. This practice could fail when there is a huge volume of content and consequent delayed workflow. Uncontrollable work delays can lead to poor customer experience and delayed claim settling creates additional customer stress. This can lead to falling retention rates and brand image. But OCR enables customers to process their own documents in an easy format, ready for use.
- Helps in strategic customer acquisition:
Providing the insurance products and services according to the needs of the customer is vital for better customer acquisition. Automated analytic tools analyze the insurance policy document which is uploaded online and compares it to your own products/competitors’ products to see if you can offer a better/cheaper plan. This involves processing of huge volumes of data and manual processes may not be capable of handling the data capture process at an efficient rate. However, by implementing OCR you can automatically transform any volume of documents into accurate and structured format for any further analysis.
- Offers high precision predictions:
OCR can convert bulk data into any format using by AI or ML software. Historical data is analyzed to make predictions about trends in the marketplace, customer behavior and emerging risks. Huge volumes of data can be fed into OCR software to generate cause and effect predictions and identify massive datasets. Automated OCR processes are usually error-free, and this helps businesses to extract maximum value from their data to make meaningful predictions.
- Increases margins and profitability:
OCR enables your insurance business to minimize costs by eliminating manual data entry mistakes commonly found in traditional data capture methods. But automated OCR process would result in reducing manpower and associated costs and increases accuracy by avoiding errors and omissions. Any minor error can result in increased costs in data capture process, mainly in the form of time wasted searching for documents which are incorrectly indexed through manual process. OCR considerably reduces these kinds of errors and improves profitability by way of cost reduction.
So, if you are running an insurance company, it is high time to consider digitization using OCR with the help of data entry company and convert all paper-based data into digital format. It helps to improve claim processing and under writing efficiency, allows faster access to market in insurance products and services, enables extraction of business insights to take quick decisions, minimizes time in business operations and helps remain competitive in the market.
