There are varying sets of clauses in the insurance policies for different sectors for Eg automobile or workers’ compensation. These policies need to be packaged in different forms of documentation.
Insurers need to pay maximum attention to every detail in the policy packaging – this is crucial. Details such as policy terms, clauses, wordings, among others must be accurate as policy packaging has a direct bearing to a policyholder’s experience.
As the insurer’s customer base increase, this becomes increasingly difficult. The in-house team must comb through each minute detail. This is why policy checking takes a backseat among the labyrinth of tasks such as setting new policies, claim settlement and policy renewals. This increases the chance of errors and omissions (E&O).
The Common Insurance Policy Errors and Omissions
Wrong Address Entry
Insurer getting the policyholder’s address wrong is a very common insurance policy error. Usually, it is as simple mistyped district name or zip code. When this happens, it leads to issuing the insurance coverage to the wrong customer.
The other scenario is that the policyholders end up paying exorbitant premiums for flood insurance despite living no were near the sea. Such misquoting leads to inaccurate insurance coverage for the insured.
Inadequate Coverage Limit
Issuing policies with inadequate per occurrence and aggregate limits is the result of improper risk assessments.
According to Investopedia, this is important to focus on as “Underinsurance, or inadequate coverage can leave the enrolee liable for a large financial expense if a serious event occurs. Whether it’s a home damaged by a hurricane or fire, or an insured person experiencing a serious disease or accident, insurance should ideally cover enough of the expense that the policyholder can manage the difference.”
Leaving Out Entities to be Covered
The Association for Cooperative Operations Research and Development (ACORD) is a non-profit organization in the insurance industry that publishes and maintains an archive of standardized forms along with a comprehensive library of electronic data standards. A difference between the policy terms and information in the ACORD form is the third most commonly occurring policy error.
Avert Policy Errors with AI
AI driven policy checking involves the careful scanning of insurance documents. The policy is thoroughly checked to weed out errors such as erroneous application filing, incorrect policy terms, inaccurate address, or the names of the policyholders.
Here’s a look at the steps an AI driven policy checking platform carries out to eliminate errors.
Data Integrity Check
This step includes a thorough review of binder generations, proposals and insurance policy quotes. Documents are scrutinized in detail to ensure the data integrity of all the information.
This process minimizes any last-minute complexities when filing the insurance claim. Essentially, it eliminates any chances of missing or erroneous information.
Underwriter Coordination
Ascertaining the correctness and integrity of information provided by policyholders in their documents falls on the underwriters and this is a difficult task. After all, underwriters design and decide on the final policy terms based on this information.
AI driven Policy Checking simplifies the underwriters’ task to a very large extent. A close scrutiny of the policy documents ensures that underwriters work with documents that are accurate.
Furthermore, insurance policy checking automation takes charge of policyholder details verification starting from quotes, policies, and proposals with the power of Natural Language Processing (NLP).
Such an automated process enables underwriters to take prompt decisions on coverage terms. Eventually this results in shorter policy issuance cycle that saves time – enhancing customer satisfaction.
Policy Adjustment Evaluation
Only when coverage information comprises policy adjustments from policyholders, is an insurance policy is considered complete.
When it comes to understanding policy terms and conditions, both the insurer and the insured need to be on the same page.
AI can assist in ascertaining the accuracy of an insurance policy thorough an evaluation of term adjustments requested by policyholders. The policy checking platform can quickly determine the impact of such adjustments on the policy’s value. Usually, this step is done before dispatching the coverage to underwriters for approval.
Policy Status Verification
Automated policy checking can also help update customers regarding important information such as the status of premium payments.
In a world where Customer Experience is make or break, insurers can’t risk alienating their user base. This is what makes Policy Status Updates and Verification a must. It is no longer a good to have but a must have for customers these days.
Why Exdion?
It must be evident how critical insurance policy checking is. When slip-ups happen during this process, it results in an error and omissions in policy documents, inviting liability and legal action. The insurance industry is high-risk, a single error can result in claims filed for you to cover, the pain of backtracking to fix the error and suboptimal customer service.
At Exdion we are an experienced Insuretech. Our policy end-to-end insurance policy automation platform works round the clock - unburdening your core staff from the tedious policy check tasks so they can focus on what’s important.
We understand the complexities of the insurance industry. This has embowered us with deep domain expertise that helped build Exdion Policy Check. Our platform helps identify and fix errors such as inappropriate limits, coverage gaps, improper policyholder credentials – all while analysing and checking thousands of policy documents, daily.
Technology plays an integral part in how we do what we do.
How Exdion Can Help
Exdion Solutions is an Insurtech company that partners with Insurance agencies and brokers to digitally transform their businesses and make them future-ready.
Servicing some of the most successful global insurance businesses, Exdion Solutions focuses on delivering sophisticated technology through simple, flexible affordable engagement models.
Exdion delivers a suite of digitization tools and platforms that work in tandem with agency management systems cutting across new business generation, renewals and compliances. To learn more about how Exdion can help take your insurance business to the next level, get in touch with us.