We’ve been pretending to be paperless for over a decade. We brag about the elimination and reduction of filing cabinets, seven-part dedicated folders, and massive mail rooms and claim that we are paperless. But we know this isn’t true. Today’s paper is PDF, excel, adobe. File cabinets have been replaced by digital folders, and mailrooms have been replaced by email and digital workflows. But in fact, we have been fooling ourselves. Insurance is not paperless; it just pretends to be. But this is not necessarily the case. The technology to achieve true digitalization exists. We just need to take a step.
Compared to the digital paper industry, one of the biggest barriers to true digitalization involves the initial ingestion or digitization of data. We’ve had advanced OCR and computer vision solutions for some time. These are useful in extracting information from digital forms and standardized templates, but are not sufficient for the needs of more complex operations such as commercial insurance submissions.
A typical commercial insurance new business submission or quote request can contain an application, loss run, statement of value, certificate of insurance, financial statements and many other documents, depending on the type of policy. A typical business insurance submission will contain 300-500 pieces of information. Invaluable information for understanding, evaluating and citing a business.
The untapped potential of dark data
The processes we use today to extract data from these submissions are outdated. A typical process involves routing submissions to a lower-cost resource (usually overseas) that will pull a minimal set of fields to set up the submission and some basic rating information. On a good day, they might pull 50 out of 500 pieces of information and feed it into the system and convert it into digital data. The rest remains in the document as dark data. Data owned by carriers but never made public or available digitally. The electronic files carrying the electronic documents are then sent to the underwriter where these digital documents are opened again and again due to unavailability of the data. It’s the same process as it was 300 years ago, except that folders and files are made from bits and bytes instead of paper and ink.
It doesn’t have to be this way. We have seen that insurance can become faster, more efficient and more precise when processes are digitized and personal lines risks are simpler and more homogeneous, but there is also hope for more complex lines such as group, commercial and specialty lines. The first is the ability to ingest data digitally.
This is where we see the leap in technology. By integrating more advanced machine learning tools that combine natural language processing with computer vision, data can now be extracted from structured and unstructured documents with high accuracy and speed. In fact, this is one of the hottest emerging technology areas in the insurance industry today, with a wide range of players and investors. Take, for example, a life insurance company in China that deployed an intelligent risk control system that enables end-to-end automation of insurance applications. (page 11, Driving the future of insurance)
Learn from emerging leaders
One of the other emerging leaders in the field is a company called thing Leave the UK. MEA is unique in that it was founded by insurance executives who understand the unique challenges involved in complex insurance documents and have a critical understanding of the terminology, variability and complexity involved. Their solutions are specifically focused on building deep expertise around core insurance concepts and an extensive insurance-specific extraction catalog, starting from submission of documents, allowing their solutions to adapt to new insurance areas very quickly. The best part is, because their team understands insurance in-depth, working with them doesn’t require you to educate their team on what insurance means.
We have cooperated with MEA and conducted many cooperation and tests in Europe and the United States. The breadth of their solutions allows us to evaluate a wide range of business lines, business processes and insurance entities, including carriers, MGAs and brokers. We found that they were able to consistently compete on speed, accuracy, and quality in testing and execution. It is indeed possible to go from evaluation to use of such a solution in just a few months.
So what does this mean for today’s digital paper world? Well, this means that insurance companies now have real options to start their digital journey. This has been a hope and a dream for some time, but technology has truly enabled the vision of digitalization – starting with smart ingestion.
Create a truly contactless process
Now there are a few different ways to use it. It starts by identifying the pseudo-paperless processes that currently exist in your organization and targeting the documents it ingests. Submit is the obvious choice, but claims, boundaries, invoice receipts, audits, etc. are also possible. Then design how you want your digital process to work. You can choose to extract and process the data directly, or take a more careful approach that still includes some level of human review or human insights. The choice should depend on the complexity and importance of the data and your comfort level with implementing it, but in the long term you should expect at least some of your data ingestion to be contactless. Another decision to make is whether you want to extract only the data you are currently using, or whether you want to extract everything in the document. This is a 50 vs. 500 submission question. But getting there may require some other changes and other technologies to help with true digital transformation. We will discuss these elements in future blogs.
However, at the same time, are your insurance processes no longer 17th century? Isn’t it time that we moved away from delivering digital paper in email and workflow systems to building truly digital processes? Isn’t it time to start building your company’s smart ingestion solution? Let’s start building true digital insurance.
Driving the future of insurance: Modernizing technologies like artificial intelligence and cloud-driven data analytics can help insurers achieve profitable growth by increasing revenue and cutting costs.
