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Key Takeaways
- An inefficient claim intake process affects far more than claimant satisfaction. It can increase call center costs, extend claim cycles, contribute to fraud losses, and reduce operational efficiency.
- AI-powered claim intake helps insurers identify potential fraud, flag subrogation opportunities, and collect more complete, structured claims data from the start.
- A streamlined digital FNOL process can reduce administrative costs while enabling claims teams to focus on more complex, high-value work.
- Better claim intake improves data quality, giving insurers stronger insights for underwriting, pricing, and future risk management.
- Modern AI-powered claim intake solutions can be deployed in weeks, allowing insurers to realize operational improvements quickly.
A poor claim intake process can result in claimant dissatisfaction and higher policyholder churn, but that’s just the beginning. To understand the true cost of not having a comprehensive claim intake process, we need to look at the direct and indirect effects, and there are a lot of them.
- Slow processes trigger higher call center costs and longer claim cycles.
- Insurance fraud and subrogation opportunities can fall through the cracks.
- Claim handler onboarding becomes more of a headache.
- Uncaptured claims data hinders underwriting improvements.
- Insurers that take the plunge can have a new claim intake process in as little as six weeks.
Your legacy claim intake process could be costing more than you realize. Claims are at the heart of what insurance carriers do. Neglecting the claims intake process is like a restaurant neglecting its kitchen or a band neglecting its instruments. But too many insurers cling to old processes because they supposedly work well enough, or because an update seems like too much of a hassle.
The stakes are high, but the solution is easy.
What’s the Real Cost of an Inefficient Claims Intake Process?
The consequences of an inefficient claims intake process can ripple through insurance operations, leading to higher costs in ways that are both direct and indirect. And we’re not just talking about claimant satisfaction rates, either. If your claim intake process is subpar, you could be hemorrhaging profits in at least six other ways.
Call Center Costs
An inefficient claim intake process may lead claimants to spend longer talking to call center representatives. They may be transferred from one representative to another, or need to call back later to tackle problems the rep didn’t address the first time. In addition to leading to claimant dissatisfaction, this can result in higher call center costs.
According to PriceItHere1, call center services cost around $1.20 to $3.00 per minute in the U.S. If your inefficient claims intake process is wasting time, the cost of those extra minutes will add up. With a more comprehensive and automated claims intake process, you can reduce call duration, improve the claimant experience, and allow human experts to focus on higher-value work.
Insurance Fraud Losses
According to the Coalition Against Insurance Fraud2, fraud occurs in approximately 10% of all property and casualty insurance claims. American consumers lose about $308.6 billion to insurance fraud each year.
Many people are guilty, whether they realize it or not. In a ValuePenguin survey3, most respondents said they’d never committed insurance fraud. However, when they were asked about specific fraudulent activities, the numbers increased. For example, 35% of consumers admitted they had submitted a claim for preexisting damage to their vehicle. This suggests that many Americans are committing fraud without believing that they are behaving fraudulently.
Since the claims intake process is an insurer’s first opportunity to catch claims-related fraud, it needs to be comprehensive. By collecting structured information, reviewing supporting documentation and identifying inconsistencies early, AI can help insurers detect potential fraud before it progresses further through the claims process. AI-powered photo analysis can detect fraud and AI algorithms can flag anomalies in the report, helping human adjusters focus their time effectively.
Claim Cycle Times
The longer a claim drags on, the more expensive it may become. Administrative costs may increase, eating into the insurer’s loss ratio. Longer claims may also result in increased damage from delayed repairs, for example, water damage that leads to mold. Auto insurance claims may lead to higher rental car fees, homeowners insurance claims to additional living expenses, and commercial insurance claims to business interruption.
An efficient claim intake process can reduce the time needed to dispatch vendors and automate the next best action. By gathering complete and accurate information from the start, an efficient claim intake process can also help insurers close the claim faster, leading to lower administrative costs (and happier claimants).
Claim Handler Onboarding
If your claim intake process is not intuitive or involves workarounds, your claim handlers may require more training to learn it. Even once they have mastered the inefficient system, their work may be slow, as they may need to spend hours on processes that should take minutes.
Your claims handlers will find it easier to use a more efficient system. You will spend less time on training and your claims handlers will spend less time on claims. Insurers may also have an easier time finding and retaining workers when the system they use is less burdensome.
Subrogation Opportunities
Insurers often find it necessary to pay a claim even though a third party should be held liable. Through the subrogation process, they can recoup these costs. However, an inefficient claim intake process may overlook subrogation opportunities.
For example, an auto insurer may pay for car repairs after a crash caused by a pothole even though the city may be liable for failing to maintain the road. If the claim intake process doesn’t identify and flag this, the insurer may never follow through with a demand letter to the city. Furthermore, there may be opportunities to automate outgoing or incoming subrogation requests so your team and your call center aren’t bogged down by dealing with other insurers.
Data Quality
A smart FNOL process captures structured data. When your FNOL intake is integrated with your core system, that structured data goes directly into other platforms, making it instantly available for analysis. When you have access to quality data, you can identify loss trends, cost-containment opportunities and information to help you analyze and price risk.
How Much Does It Cost to Update a Claim Intake Process?
When you add up all the hidden costs associated with an inefficient claim intake system, the cost of upgrading becomes quite reasonable. In fact, improving your claim intake process may cost considerably less than you assume.
Liberate’s System of Action for Claims integrates seamlessly with the systems you already use. In weeks, you’ll have a new claim intake process that can answer calls in one second and resolve up to 70% of FNOL calls without human intervention.
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