Decision Automation for Insurers: Here are the Guidelines

May 3, 2023

Why decision automation?
It's safe to say automated insurance decisions are now playing a larger role than many of us expected a few years back. Allowing powerful efficiency and streamlining monotonous administration. And if you're interested in automating decisions at your insurance company, this article can help find your path forward.

There are multiple advantages of involving automated decisions in your insurance processes. It can effortlessly improve efficiency, accuracy and risk assessment for high-frequency claims areas. Resulting in faster and more accurate claims processing.

Do's and don'ts
Try to pair automated decisions with claims that have clear criteria and guidelines to automatically determine if they should be approved or rejected. For example, claims that automatically fall within a certain category, such as minor claims or damages with low costs.

It can also be very useful for determining compensation amounts for damages to vehicles or property, based on the current insurance policy.

But awareness of today's limitations in automated decision-making is important. Some decisions may be too complex or subjective to fully automate and might present problematic results if it isn't carefully managed.

It may not be suitable for cases that require a greater degree of assessment or investigation, such as complex personal injuries. As such, it's necessary to have human assessors who can evaluate and make decisions based on the circumstances surrounding the injury.

To ensure effective and fair automated decision-making processes – transparency is essential. Insurers should be transparent with their customers about how decisions are made and what data are being used.

Aim for high frequency and standardizable claims
Moving forward, it may be beneficial to prioritize automating claims that are frequently processed and have a high degree of standardization, such as traffic claims, which carry a lower risk of fraud. Remember the importance of maintaining a balance between the efficiency benefits of automation and the need for human judgment. It's clear that automated insurance decisions are here to stay and will continue to play an even greater role in the future.

Magnus Wallberg
Head of Sales
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