The Indian motor insurance coverage market is at present valued at round $13.19 billion and is projected to succeed in $21.48 billion by 2030. Whereas the business continues to develop steadily, regulators have additionally issued sturdy mandates to insurers to enhance their turnaround instances and supply higher buyer experiences.
For one among India’s greatest personal insurers, which prided itself on a excessive declare settlement ratio, this meant discovering new methods to streamline its back-office processes and scale back guide errors. However it wasn’t straightforward. They course of greater than 350,000 circumstances yearly— every file incorporates over 10 sorts of paperwork, various codecs and constructions, 30+ line gadgets, and a number of ingestion channels. They’d a backend staff of 40 knowledge entry clerks and vehicle specialists 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 modifications included:
- No arbitrary rejection of motor insurance coverage claims as a result of lack of paperwork — insurers should request all required paperwork upfront throughout coverage issuance
- Insurers should allocate a surveyor inside 24 hours, acquire 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 methodology
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 means to scale and ship worth to prospects.
Let’s discover how these modifications 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 opinions and destructive suggestions from prospects
- Car specialists spending precious time on knowledge entry as an alternative of value evaluation
These challenges made it unimaginable for them to justify premium will increase based mostly on precise declare prices and threat profiles.
Why guide declare processing was sophisticated
Let’s first try to perceive what the insurer’s declare processing workflow used to appear like.
1. When an accident happens, the shopper can both name up the insurer’s toll-free quantity to register the declare or use their proprietary cellular app to finish the declare kind.
2. Throughout this, prospects can be requested to share coverage quantity, automobile particulars (make, mannequin, registration quantity, and many others.), accident or harm particulars, and police report (if relevant).
3. The shopper is then requested to take the automobile to one of many insurer’s licensed 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 shopper or the storage (in case, the shopper opts for cashless mode)
The backend staff, consisting of 40 knowledge entry clerks and vehicle specialists, manually inputs all the important thing particulars from the declare file into their proprietary declare administration system. This included capturing info from completely different doc sorts, corresponding to estimates, invoices, registration certificates, driving licenses, and extra.
Do not forget that these paperwork are issued by completely different sources. As an example, a driver’s license issued in a single state might not comply with the identical format because the one issued in one other state.
The staff would meticulously overview every line merchandise and half quantity to make sure accuracy earlier than the declare may very well be additional processed and accepted. One other problem was the inconsistent naming conventions for components throughout completely different garages and producers – the identical element would have completely different names relying on who submitted the doc.
As an example, what seems as a entrance bumper on one estimate may be listed as a bumper cowl on one other. Equally, the element referred to as a boot in paperwork from UK and German producers would present up as a deck or trunk in producers from different international locations. And not using a 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 anyplace from 15 to 30 days, falling wanting the brand new regulatory timelines.
When claims prolonged past IRDAI’s mandated settlement durations, the implications had been each regulatory and industrial. On the regulatory facet, the insurer confronted financial penalties and present trigger notices. Commercially, these delays broken their market fame and prompted formal buyer complaints, which require important time and assets to resolve. The prolonged processing drove up operational prices, as claims wanted further 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. Among the rivals, particularly the totally digital-first insurers, had already began rolling out zero-touch declare processing.
They explored a number of OCR options, however rapidly realized such instruments gained’t minimize it. These instruments had 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 suitable info, and combine seamlessly into their current claims administration system. After evaluating a number of AI-powered doc processing platforms, they selected to go along 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
- Capability 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 centered on incremental enhancements slightly than a whole in a single day transformation.
The staff started by tackling essentially the most crucial 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 section centered on:
- Configuring OCR fashions to extract line gadgets from restore invoices and estimates
- Creating programs to differentiate components from labor prices
- Constructing validation guidelines to flag potential knowledge inconsistencies
- Integrating with the insurer’s software on their proprietary declare administration system through API
The workflow was easy. Right here’s what it appeared like:
- Declare initiation and doc assortment: When a declare occasion happens, policyholders provoke the declare kind by means of the insurer’s person interface or customer support. The declare kind 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 routinely routed to Nanonets through API integration. Beforehand, a staff of 40 backend workers would manually overview and enter info from these paperwork into their system.
- Clever doc processing: Nanonets processes the paperwork utilizing specialised fashions to:
- Classify every doc sort routinely (bill, estimate, registration certificates, and many others.) and route it to the suitable knowledge extraction mannequin
- The mannequin extracts structured knowledge from each standardized and non-standardized codecs
- Learn and manage line gadgets from restore estimates and invoices
- Distinguish between components and labor expenses utilizing key phrase recognition
- Components database validation: Extracted half info is validated in opposition to a complete components grasp database that:
- Standardizes various half names throughout completely different garages (bumper vs. cowl)
- Identifies potential little one half replacements (corresponding to door pores and skin versus whole door meeting)
- Categorizes supplies (plastic, glass, metallic) for correct value evaluation
- Knowledge integration: The extracted and validated info is shipped again into the insurer’s system as a customized JSON file, routinely populating the suitable fields within the declare evaluation interface.
- Exception-based overview: The backend staff opinions the populated knowledge, focusing solely on flagged exceptions or uncommon circumstances.
- Approval and settlement: Claims that move validation proceed to approval and settlement, with considerably lowered guide intervention.
The preliminary implementation centered on core paperwork (estimates, invoices, and pre-invoices), with plans to increase to supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork.
The affect of automating insurance coverage claims processing
It’s been solely three months because the implementation, however the brand new workflow has already proven promising indicators for the insurer.
Let’s check out the affect:
- 1.5 million pages processed in three months, virtually double the earlier quantity of 760,000 pages
- Standardized naming for about 600 widespread components 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 value
- Allow employees to spend much less time on knowledge entry and extra on doc overview 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 permits seamless knowledge movement 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 section — this could minimize guide work by 50%.
What’s subsequent
The following section will increase 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 might help. Nanonets works together with your current programs to ship actual enhancements with out turning your operation the other way up. Able to see it in motion? Schedule a demo today.
