The Indian motor insurance coverage market is at the moment 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 robust mandates to insurers to enhance their turnaround occasions and supply higher buyer experiences.
For one among India’s greatest 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 handbook errors. However it wasn’t straightforward. They course of greater than 350,000 circumstances yearly— every file accommodates over 10 forms of paperwork, various codecs and constructions, 30+ line gadgets, and a number of ingestion channels. That they had a backend crew of 40 information entry clerks and vehicle consultants manually inputting data 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 strategy. 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 bettering motor insurance coverage declare settlement processes.
The important thing adjustments 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
- Necessary buyer data sheet (CIS) to supply 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 grew to become greater than only a processing problem. It uncovered elementary operational constraints that threatened their capacity to scale and ship worth to clients.
Let’s discover how these adjustments affected the insurer’s enterprise:
- Couldn’t scale their operations with out including head depend.
- Unable to fulfill IRDAI’s necessary declare settlement timelines – risking regulatory penalties for violations
- Getting poor evaluations and unfavourable suggestions from clients
- Car consultants spending worthwhile 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 handbook 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 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 kind.
2. Throughout this, clients might be requested to share coverage quantity, car particulars (make, mannequin, registration quantity, and so on.), accident or harm particulars, and police report (if relevant).
3. The shopper is then requested to take the car 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 car and put together a report, which might then be submitted to the claims crew.
5. The claims crew would then assess the surveyor’s report and the paperwork submitted, evaluating elements like car identification, half numbers, unit pricing, and total declare validity.
6. After the evaluation, the crew 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 could possibly be disbursed to the client or the storage (in case, the client opts for cashless mode)
The backend crew, 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 data from completely different doc varieties, akin 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 crew would meticulously assessment every line merchandise and half quantity to make sure accuracy earlier than the declare could possibly be additional processed and authorized. One other problem was the inconsistent naming conventions for elements 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 is perhaps listed as a bumper cowl on one other. Equally, the element known as a boot in paperwork from UK and German producers would present up as a deck or trunk in producers from different international locations. With out a standardized database, these variations created fixed confusion.
Mismatches in car identification or half numbers, incorrect unit pricing, or lacking paperwork would trigger the declare to return to evaluation. This complete course of may take wherever from 15 to 30 days, falling in need of the brand new regulatory timelines.
When claims prolonged past IRDAI’s mandated settlement intervals, the results had been each regulatory and business. On the regulatory facet, the insurer confronted financial penalties and present trigger notices. Commercially, these delays broken their market repute 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 shortly 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 shortly 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 handbook interventions. And to make issues worse, they might solely feed sure doc codecs into the system, leaving a good portion of the declare recordsdata untouched.
The insurer found out they wanted a format-agnostic answer that might deal with all doc varieties, extract the best data, and combine seamlessly into their present 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
- Capacity 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 fairly than a whole in a single day transformation.
The crew started by tackling probably the most important paperwork within the claims course of: estimates, invoices, and pre-invoices. These paperwork include the important details about car damages, required repairs, and related prices.
The preliminary part targeted on:
- Configuring OCR fashions to extract line gadgets from restore invoices and estimates
- Creating techniques to differentiate 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 easy. Right here’s what it appeared like:
- Declare initiation and doc assortment: When a declare occasion happens, policyholders provoke the declare kind via the insurer’s person interface or customer support. The declare kind collects primary 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 crew of 40 backend workers would manually assessment and enter data 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 on.) and route it to the best information extraction mannequin
- The mannequin extracts structured information from each standardized and non-standardized codecs
- Learn and arrange line gadgets from restore estimates and invoices
- Distinguish between elements and labor expenses utilizing key phrase recognition
- Components database validation: Extracted half data is validated towards a complete elements grasp database that:
- Standardizes various half names throughout completely different garages (bumper vs. cowl)
- Identifies potential baby half replacements (akin to door pores and skin versus total door meeting)
- Categorizes supplies (plastic, glass, metallic) for correct price evaluation
- Knowledge integration: The extracted and validated data is distributed again into the insurer’s system as a customized JSON file, robotically populating the suitable fields within the declare evaluation interface.
- Exception-based assessment: The backend crew evaluations the populated information, focusing solely on flagged exceptions or uncommon circumstances.
- Approval and settlement: Claims that cross validation proceed to approval and settlement, with considerably diminished handbook 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 about 600 widespread elements that cowl 90% of claims
- Systematically determine alternatives for baby half replacements (like a door pores and skin at ₹5,000 versus a whole door meeting at ₹20,000) – saves a ton of price
- Allow employees to spend much less time on information entry and extra on doc assessment and exception dealing with
- Simpler to fulfill IRDAI’s regulatory timelines, which require declare choices inside 7 days of receiving the survey report
- Customized JSON integration permits seamless information move between Nanonets and the insurer’s declare administration system
Proper now, the main target is on the core paperwork — estimates, invoices, and pre-invoices — because the crew will get snug with the brand new course of. After that, we’ll cowl the remaining doc varieties like driving licenses and registration certificates within the subsequent part — this could minimize handbook 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 cope with mounting paperwork and lacking regulatory deadlines, we may help. Nanonets works along with your present techniques to ship actual enhancements with out turning your operation the other way up. Able to see it in motion? Schedule a demo in the present day.
