The Indian motor insurance coverage market is presently 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 instances and supply higher buyer experiences.
For certainly one of 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 guide errors. Nevertheless it wasn’t straightforward. They course of greater than 350,000 instances yearly— every file incorporates over 10 sorts of paperwork, various codecs and constructions, 30+ line objects, 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 tips geared toward bettering motor insurance coverage declare settlement processes.
The important thing modifications included:
- No arbitrary rejection of motor insurance coverage claims attributable to lack of paperwork — insurers should request all required paperwork upfront throughout coverage issuance
- Insurers should allocate a surveyor inside 24 hours, get hold of the survey report inside 15 days, and resolve on the declare inside 7 days of receiving the survey report
- Obligatory buyer data sheet (CIS) to supply clear coverage particulars and claims course of
- Restrictions on coverage cancellation, permitting it solely in instances of confirmed fraud with 7-day discover
- Requirement to reveal the insured declared worth (IDV) calculation methodology
Because the insurer’s enterprise grew quickly, these regulatory challenges made dealing with near 30,000 claims month-to-month turned greater than only a processing problem. It uncovered basic operational constraints that threatened their capability to scale and ship worth to prospects.
Let’s discover how these modifications affected the insurer’s enterprise:
- Couldn’t scale their operations with out including head rely.
- Unable to satisfy IRDAI’s obligatory declare settlement timelines – risking regulatory penalties for violations
- Getting poor critiques and unfavorable suggestions from prospects
- Vehicle consultants spending precious time on information entry as a substitute of value evaluation
These challenges made it unattainable for them to justify premium will increase primarily based on precise declare prices and danger profiles.
Why guide declare processing was sophisticated
Let’s first attempt 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 cellular app to finish the declare kind.
2. Throughout this, prospects can be requested to share coverage quantity, automobile 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 automobile 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 automobile 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 components like automobile identification, half numbers, unit pricing, and general 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, reminiscent of estimates, invoices, registration certificates, driving licenses, and extra.
Keep in mind that these paperwork are issued by completely different sources. For example, a driver’s license issued in a single state could not comply with the identical format because the one issued in one other state.
The crew would meticulously overview every line merchandise and half quantity to make sure accuracy earlier than the declare could possibly be additional processed and authorised. 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.
For example, what seems as a entrance bumper on one estimate could be listed as a bumper cowl on one other. Equally, the element referred to 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 automobile identification or half numbers, incorrect unit pricing, or lacking paperwork would trigger the declare to return to evaluation. This whole course of might take anyplace from 15 to 30 days, falling wanting 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 aspect, the insurer confronted financial penalties and present trigger notices. Commercially, these delays broken their market fame and prompted formal buyer complaints, which require vital time and sources to resolve. The prolonged processing drove up operational prices, as claims wanted extra touchpoints and extended dealing with, additionally leading to buyer dissatisfaction.
The insurer rapidly 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 sport. A few of the opponents, particularly the totally digital-first insurers, had already began rolling out zero-touch declare processing.
They explored a number of OCR options, however rapidly realized such instruments received’t lower it. These instruments had been closely depending on format and construction consistency. This led to formatting errors and inconsistent extraction, and extra guide interventions. And to make issues worse, they may 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 resolution that might deal with all doc varieties, extract the correct data, and combine seamlessly into their current claims administration system. After evaluating a number of AI-powered doc processing platforms, they selected to go together with Nanonets’ Clever Doc Processing (IDP) resolution.
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 resolution that match their particular claims workflow. The implementation targeted on incremental enhancements slightly than an entire in a single day transformation.
The crew started by tackling probably the most crucial paperwork within the claims course of: estimates, invoices, and pre-invoices. These paperwork include the important details about automobile damages, required repairs, and related prices.
The preliminary part targeted on:
- Configuring OCR fashions to extract line objects from restore invoices and estimates
- Creating techniques to tell apart 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 by means of the insurer’s consumer 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 routinely routed to Nanonets through API integration. Beforehand, a crew of 40 backend workers would manually overview and enter data from these paperwork into their system.
- Clever doc processing: Nanonets processes the paperwork utilizing specialised fashions to:
- Classify every doc kind routinely (bill, estimate, registration certificates, and so on.) and route it to the correct information extraction mannequin
- The mannequin extracts structured information from each standardized and non-standardized codecs
- Learn and arrange line objects from restore estimates and invoices
- Distinguish between elements and labor fees utilizing key phrase recognition
- Components database validation: Extracted half data is validated in opposition to a complete elements grasp database that:
- Standardizes various half names throughout completely different garages (bumper vs. cowl)
- Identifies potential youngster half replacements (reminiscent of door pores and skin versus whole door meeting)
- Categorizes supplies (plastic, glass, metallic) for correct value evaluation
- Knowledge integration: The extracted and validated data is distributed again into the insurer’s system as a customized JSON file, routinely populating the suitable fields within the declare evaluation interface.
- Exception-based overview: The backend crew critiques the populated information, focusing solely on flagged exceptions or uncommon instances.
- Approval and settlement: Claims that move validation proceed to approval and settlement, with considerably lowered guide intervention.
The preliminary implementation targeted on core paperwork (estimates, invoices, and pre-invoices), with plans to increase to supporting paperwork like driving licenses, registration certificates, journey permits, health certificates, and tax paperwork.
The affect of automating insurance coverage claims processing
It’s been solely three months because the implementation, however the brand new workflow has already proven promising indicators for the insurer.
Let’s check out the affect:
- 1.5 million pages processed in three months, nearly double the earlier quantity of 760,000 pages
- Standardized naming for about 600 frequent elements that cowl 90% of claims
- Systematically determine alternatives for youngster half replacements (like a door pores and skin at ₹5,000 versus a complete door meeting at ₹20,000) – saves a ton of value
- Allow workers to spend much less time on information entry and extra on doc overview and exception dealing with
- Simpler to satisfy IRDAI’s regulatory timelines, which require declare choices inside 7 days of receiving the survey report
- Customized JSON integration permits seamless information movement 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 comfy 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 lower guide work by 50%.
What’s subsequent
The subsequent part will increase 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 take care of mounting paperwork and lacking regulatory deadlines, we might help. Nanonets works along with your current techniques to ship actual enhancements with out turning your operation the other way up. Able to see it in motion? Schedule a demo today.
