The Indian motor insurance coverage market is at present valued at round $13.19 billion and is projected to achieve $21.48 billion by 2030. Whereas the trade continues to develop steadily, regulators have additionally issued sturdy mandates to insurers to enhance their turnaround occasions and supply higher buyer experiences.
For one in every of India’s largest non-public insurers, which prided itself on a excessive declare settlement ratio, this meant discovering new methods to streamline its back-office processes and cut back guide errors. Nevertheless it wasn’t simple. They course of greater than 350,000 circumstances yearly— every file incorporates over 10 kinds of paperwork, various codecs and constructions, 30+ line objects, and a number of ingestion channels. They’d a backend staff of 40 information entry clerks and vehicle consultants manually inputting info from restore estimates, invoices, and supporting paperwork into their declare administration system
This inefficient, unscalable workflow could not meet the regulator’s turnaround time mandates, forcing a re-evaluation of their motor declare processing method. Let’s discover how they went about it.
What modified in motor declare processing in 2024
In June 2024, IRDAI, the Indian insurance coverage regulator, issued new pointers geared toward enhancing motor insurance coverage declare settlement processes.
The important thing adjustments included:
- No arbitrary rejection of motor insurance coverage claims as a consequence of lack of paperwork — insurers should request all required paperwork upfront throughout coverage issuance
- Insurers should allocate a surveyor inside 24 hours, get hold of the survey report inside 15 days, and determine on the declare inside 7 days of receiving the survey report
- Obligatory buyer info sheet (CIS) to offer clear coverage particulars and claims course of
- Restrictions on coverage cancellation, permitting it solely in circumstances of confirmed fraud with 7-day discover
- Requirement to reveal the insured declared worth (IDV) calculation technique
Because the insurer’s enterprise grew quickly, these regulatory challenges made dealing with near 30,000 claims month-to-month turned greater than only a processing problem. It uncovered basic operational constraints that threatened their potential to scale and ship worth to prospects.
Let’s discover how these adjustments affected the insurer’s enterprise:
- Couldn’t scale their operations with out including head rely.
- Unable to satisfy IRDAI’s necessary declare settlement timelines – risking regulatory penalties for violations
- Getting poor evaluations and destructive suggestions from prospects
- Vehicle consultants spending helpful time on information entry as an alternative of price evaluation
These challenges made it unimaginable for them to justify premium will increase based mostly on precise declare prices and danger profiles.
Why guide declare processing was difficult
Let’s first try to perceive what the insurer’s declare processing workflow used to appear like.
1. When an accident happens, the client can both name up the insurer’s toll-free quantity to register the declare or use their proprietary cell app to finish the declare type.
2. Throughout this, prospects will likely be requested to share coverage quantity, automobile particulars (make, mannequin, registration quantity, and so forth.), accident or harm particulars, and police report (if relevant).
3. The client is then requested to take the automobile to one of many insurer’s approved community garages for inspection and restore. They should submit the required paperwork to the surveyor assigned by the insurer.
4. The surveyor would examine the automobile and put together a report, which might then be submitted to the claims staff.
5. The claims staff would then assess the surveyor’s report and the paperwork submitted, evaluating elements like automobile identification, half numbers, unit pricing, and total declare validity.
6. After the evaluation, the staff would manually enter the related particulars into the claims administration system.
7. The declare would then undergo a number of layers of approval earlier than the settlement quantity may very well be disbursed to the client or the storage (in case, the client opts for cashless mode)
The backend staff, consisting of 40 information entry clerks and vehicle consultants, manually inputs all the important thing particulars from the declare file into their proprietary declare administration system. This included capturing info from totally different doc sorts, akin to estimates, invoices, registration certificates, driving licenses, and extra.
Keep in mind that these paperwork are issued by totally different sources. For example, a driver’s license issued in a single state could not comply with the identical format because the one issued in one other state.
The staff would meticulously evaluate every line merchandise and half quantity to make sure accuracy earlier than the declare may very well be additional processed and accredited. One other problem was the inconsistent naming conventions for elements throughout totally different garages and producers – the identical part would have totally different names relying on who submitted the doc.
For example, what seems as a entrance bumper on one estimate may be listed as a bumper cowl on one other. Equally, the part known as a boot in paperwork from UK and German producers would present up as a deck or trunk in producers from different nations. With no standardized database, these variations created fixed confusion.
Mismatches in automobile identification or half numbers, incorrect unit pricing, or lacking paperwork would trigger the declare to return to evaluation. This complete course of might take wherever from 15 to 30 days, falling wanting the brand new regulatory timelines.
When claims prolonged past IRDAI’s mandated settlement durations, the results have been each regulatory and business. On the regulatory facet, the insurer confronted financial penalties and present trigger notices. Commercially, these delays broken their market popularity and prompted formal buyer complaints, which require vital time and assets to resolve. The prolonged processing drove up operational prices, as claims wanted extra touchpoints and extended dealing with, additionally leading to buyer dissatisfaction.
The insurer rapidly realized that this inefficient workflow couldn’t sustain with the rising enterprise calls for and the stricter regulatory necessities.
How the insurer automated its declare processing workflow
The insurer knew they needed to step up their recreation. A number of the rivals, particularly the absolutely digital-first insurers, had already began rolling out zero-touch declare processing.
They explored a number of OCR options, however rapidly realized such instruments received’t lower it. These instruments have been closely depending on format and construction consistency. This led to formatting errors and inconsistent extraction, and extra guide interventions. And to make issues worse, they may solely feed sure doc codecs into the system, leaving a good portion of the declare information untouched.
The insurer discovered they wanted a format-agnostic answer that might deal with all doc sorts, extract the appropriate info, and combine seamlessly into their present claims administration system. After evaluating a number of AI-powered doc processing platforms, they selected to go together with Nanonets’ Clever Doc Processing (IDP) answer.
Right here’s why:
- Simplicity of the PDF extraction workflows
- Line merchandise extraction accuracy
- API and system integration capabilities
- Skill to deal with all doc codecs, together with handwritten and semi-structured paperwork
- Multi-lingual capabilities
We at Nanonets labored with the insurer to create a tailor-made doc processing answer that match their particular claims workflow. The implementation targeted on incremental enhancements moderately than an entire in a single day transformation.
The staff started by tackling probably the most essential paperwork within the claims course of: estimates, invoices, and pre-invoices. These paperwork comprise the important details about automobile damages, required repairs, and related prices.
The preliminary part targeted on:
- Configuring OCR fashions to extract line objects from restore invoices and estimates
- Creating methods to tell apart elements from labor prices
- Constructing validation guidelines to flag potential information inconsistencies
- Integrating with the insurer’s software on their proprietary declare administration system through API
The workflow was simple. Right here’s what it appeared like:
- Declare initiation and doc assortment: When a declare occasion happens, policyholders provoke the declare type via the insurer’s consumer interface or customer support. The declare type collects fundamental particulars together with important paperwork together with restore estimates, invoices, and supporting documentation.
- Doc submission to Nanonets: As soon as uploaded to the insurer’s system, these paperwork are robotically routed to Nanonets through API integration. Beforehand, a staff of 40 backend workers would manually evaluate and enter info from these paperwork into their system.
- Clever doc processing: Nanonets processes the paperwork utilizing specialised fashions to:
- Classify every doc sort robotically (bill, estimate, registration certificates, and so forth.) and route it to the appropriate information extraction mannequin
- The mannequin extracts structured information from each standardized and non-standardized codecs
- Learn and set up line objects from restore estimates and invoices
- Distinguish between elements and labor expenses utilizing key phrase recognition
- Components database validation: Extracted half info is validated towards a complete elements grasp database that:
- Standardizes various half names throughout totally different garages (bumper vs. cowl)
- Identifies potential little one half replacements (akin to door pores and skin versus complete door meeting)
- Categorizes supplies (plastic, glass, metallic) for correct price evaluation
- Knowledge integration: The extracted and validated info is shipped again into the insurer’s system as a customized JSON file, robotically populating the suitable fields within the declare evaluation interface.
- Exception-based evaluate: The backend staff evaluations the populated information, focusing solely on flagged exceptions or uncommon circumstances.
- Approval and settlement: Claims that move validation proceed to approval and settlement, with considerably decreased guide intervention.
The preliminary implementation targeted on core paperwork (estimates, invoices, and pre-invoices), with plans to broaden to supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork.
The impression of automating insurance coverage claims processing
It’s been solely three months for the reason that implementation, however the brand new workflow has already proven promising indicators for the insurer.
Let’s check out the impression:
- 1.5 million pages processed in three months, nearly double the earlier quantity of 760,000 pages
- Standardized naming for roughly 600 widespread elements that cowl 90% of claims
- Systematically determine alternatives for little one half replacements (like a door pores and skin at ₹5,000 versus a complete door meeting at ₹20,000) – saves a ton of price
- Allow employees to spend much less time on information entry and extra on doc evaluate and exception dealing with
- Simpler to satisfy IRDAI’s regulatory timelines, which require declare selections inside 7 days of receiving the survey report
- Customized JSON integration allows seamless information circulation between Nanonets and the insurer’s declare administration system
Proper now, the main focus is on the core paperwork — estimates, invoices, and pre-invoices — because the staff will get snug with the brand new course of. After that, we’ll cowl the remaining doc sorts like driving licenses and registration certificates within the subsequent part — this could lower guide work by 50%.
What’s subsequent
The following part will broaden doc processing to incorporate supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork. Moreover, we’re working with the identical insurer, automating their medical claims processing workflow.
In case your insurance coverage firm is struggling to take care of mounting paperwork and lacking regulatory deadlines, we may help. Nanonets works along with your present methods to ship actual enhancements with out turning your operation the other way up. Able to see it in motion? Schedule a demo today.
