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You’ve Come a Long Way, Baby – The History and Evolution of Insurance Claims Management

Technology is increasing efficiency and saving money, and there’s no end in sight.

Key Takeaways:

A once manual and time-consuming profession has undergone a digital revolution.
Accuracy, efficiency, and decision-making have all been given a boost.
This evolution has been supported by automation, enhanced data management, and mobile applications.
AI and ML have also tossed their hat into the ring, reducing fraud, super-charging automation, and improving data analysis.
What does the future hold? Read on.

Claims adjusting is a profession that dates back centuries, to when the first insurance company was established in 1680 in London. In the United States, Benjamin Franklin co-founded the Philadelphia Contributorship in 1752. The modern insurance claims adjuster role evolved from the early days of commerce—merchants needed people to evaluate damage during the transport of goods.

The insurance industry grew, and claims adjusting evolved as insurance companies recognized the importance of experts to handle claims efficiently. It has become a specialized field, and today, claims adjusters play a vital role in the insurance industry.

In the early days, and even up to recent times, claims adjusting was a manual, time-consuming process, made more difficult because it had to be meticulous with no room for error. The adjuster was, and in some cases, still is, burdened with stacks of paperwork and countless trips to filing cabinets.

In this article, we’ll explore the evolution of claims management as it relates to technology and how digital transformation and customized technology solutions have revolutionized the industry.

Digitization begins: the 1990s

The digital transformation wave swept across industries in the 1990s. Claims management software emerged and brought with it newfound efficiency and organization. Early systems required manual input to store data electronically and still heavily relied on paper. These early digitization attempts enabled faster search and retrieval of information, but what went in is what came out – including errors. 

However, these early forays into efficiency did help streamline the claims process by automating manual tasks: instead of searching through paper, one would search through a database. Customer service improved, and operations could be streamlined with software for cost savings. 

1990s insurance adjusting software had its limitations. 

  • There were no advanced features or customization options, which limited the software’s ability to adapt to unique claim situations, and scaling was unheard of.
  • The software of the time was more complex to use and required specialized training, with a steep learning curve for those who were unfamiliar with technology. This was one factor that slowed adoption rates.
  • Limited computer power and hardware resources meant slow performance and low storage capacity, impacting overall efficiency and the user experience.

Integration and automation: the early 2000s

Advancements in insurance claims management software during the early 2000s were focused on automation and integration. This meant increased efficiency through automating time-consuming manual tasks such as data entry and document processing. Integration with other systems reduced redundancy and vastly improved data accuracy. Claims processing was sped up. However, this period of technological growth had its challenges. System compatibility issues were rife, and a sharp learning curve remained. 

Other advancements during this period included:

  • Mobile claims management. In 2009, Nationwide Mutual Insurance Company launched a free iPhone app for their insured drivers that allowed them to submit a claim and document an accident. This allowed faster claims reporting and a better customer experience. Still, security features were in their infancy, early mobile devices had technological limitations, and the app wasn’t compatible with all systems. 
  • Data analytics and reporting. Insurance claims management software started adding advanced data analytics and reporting tools. This gave adjusters deeper insights into claims patterns and potential fraud while improving decision-making. However, privacy was an issue. It wasn’t easy to effectively manage and interpret large volumes of data, and analytics tools didn’t always integrate with existing systems.
  • Customer self-service platforms were introduced in this era, but the user experience was clunky, tech support was lacking, and security risks abounded.

Cloud computing and mobile access: the 2010s

The shift to cloud-based software solutions, improvements, and proliferation of mobile applications has been a game-changer for insurance adjusters and customers. These advancements have not only increased accessibility but have also revolutionized how adjusters handle claims by enabling real-time data management. Also:

  • By adopting cloud-based solutions, adjusters have eliminated the need for physical paperwork and reduced dependency on the traditional office setup. Essential documents and files can be accessed from anywhere at any time with an internet-abled device, improving efficiency and response times.
  • Data storage problems were eliminated. Cloud-based solutions can securely store large amounts of data. Rather than dealing with stacks of physical files and their limitations, adjusters can easily upload and retrieve digital files for organized and efficient data management. There are no more misplaced or lost documents, and information is readily available for analysis.
  • Mobile application enhancements mean greater accessibility and convenience for insurance adjusters, allowing them to perform many tasks on the go: uploading photos, recording statements, and accessing digital forms. Damage can be documented and assessed immediately, and this real-time data collection expedites the claims process while enabling faster, more accurate decision-making. 

Cloud-based solutions and mobile applications facilitate seamless collaboration among adjusters, insurance companies, and policyholders. For adjusters, that means easy communication with all stakeholders using real-time data, ensuring everyone is on the same page. This streamlines the claims process and boosts customer satisfaction. 

Artificial intelligence:  today and tomorrow

Artificial intelligence (AI) and its offshoot, machine learning (ML) learning technologies, have made their way into insurance adjusting, enabling faster and more accurate prediction of outcomes, automating complex processes, and providing the data intelligence necessary for informed decision-making. In addition, AI and ML offer:

  • Predictive modeling. AI and ML algorithms are being leveraged to predict claim outcomes. By analyzing historical data, these models assess the likelihood of events such as fraud and potential claim costs.
  • More automation. AI is being implemented to automate other repetitive and time-consuming tasks in adjusting, going far beyond merely eliminating manual entry. Chatbots and virtual assistants can handle client inquiries, gather initial claim information, and answer common questions so adjusters can focus on complex tasks.
  • Document processing. ML algorithms can analyze and extract relevant information from policy and claims records, medical reports, and invoices. This streamlines the claims review process while reducing manual effort and errors.
  • Image and video analysis. It’s all too easy these days to alter photographs. AI can be used to analyze videos and images submitted as claims evidence. ML algorithms examine the visual data to identify damage, assess severity, and estimate repair costs to speed up the claims process.
  • Fraud detection. By analyzing vast datasets, AI and ML can identify patterns, anomalies, and suspicious activity that may indicate a fraudulent claim.

AI and ML integration reshape insurance adjusting through improved accuracy, efficiency, and customer experience. 

The future of claims management software

Insurance claims management software has come a long way in a relatively short period, and the future offers technological advancements that will change the game once again. Anticipated developments include:

  • The integration of Internet of Things (IoT) devices. Sensors, wearables, and smart home devices can provide adjusters with even more real-time information for property claims. The data can help in early detection and proactive risk management, as well as faster claims processing.
  • Augmented reality (AR) and Virtual reality (VR) technologies can transform how adjusters assess damage and estimate repairs. Using AR and VR tools, adjusters can digitally visualize and overly repair suggestions on damaged property, increasing accuracy and saving time.
  • Blockchain technology. While not currently in wide use, blockchain can enhance claims management transparency, security, and efficiency. For example, smart contracts can automate the claims settlement process, eliminating the need for intermediaries and thereby reducing administrative costs.

Meeting dynamic needs

The evolution of technology in insurance adjusting has been exciting, and the future promises remarkable developments. Continuously embracing innovation and leveraging advanced technologies means insurance adjusters can better meet the needs of their clients through streamlined processes while reducing costs and providing a superior customer experience. 

But remember, when it comes to software, one size doesn’t fit all, and efficiently incorporating new technology requires a customized approach.

At Susco, we specialize in custom claim management systems. We’ll partner with you to make things faster, better, and stronger than before, and we can provide full project development or work with your internal team.

For over a decade, our dedicated team of web and application developers has built intuitive software for innovative organizations with solutions that perfectly align with business goals. Discover what we can do for you. Contact us today to schedule your free one-hour assessment.

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