Automation Enables Seamless Conversion of Loss Runs into Structured Data. Know How!

Oct 13, 2022

Key Takeaways:

• Loss runs come in different formats from various sources, and manually extracting data from them is a tedious process.

• Automating the process using AI techniques can simplify the process.

• This leads to reduced turnaround time & enhanced accuracy facilitating client satisfaction and retention. 

Each insurance submission’s underwriting needs loss runs that need to be acquired manually every time. One of the difficult parts of the insurance underwriting process is obtaining an accurate picture of the prospect’s loss history. But why is it cumbersome to collect all the reports and extract data from them accurately? Part of the problem is the high document variability and the massive amount of data from the reports.      

This blog will highlight the importance of loss runs and how automating this process can transform the commercial underwriting process, so carriers can unlock the value in their unstructured data and evaluate risk faster.

Loss Run Conversion Challenges 

Inconsistent Document Formats & Types

• Loss Run reports do not follow any standard template or format. Each insurer has defined its own templates for sharing loss data.

• Loss run formats or templates often vary within the same insurance carrier due to the line of business, changes to the underlying systems, and the underwriting companies.

Complicated Data Capture Process

• Loss Runs for a typical submission have an average of around 350-400 data fields.

• With different templates and patterns, capturing so much information becomes a complex process.

Increased Probability of Errors

• A loss-run document, on average, contains 350-400 data fields. An insurance submission can have more than one Loss Run document depending on the history.

• Manual data entry from the huge loss run reports can be highly error-prone.

High Turn-Around Time

• Manually capturing data from Loss Runs for a new insurance submission portal takes approximately 12 – 24 hours, depending on the number of losses and prior carriers.

• The entire process becomes slow due to the high turnaround time, leading to customer dissatisfaction and client attrition.

How will Automation of Loss Run Conversion Benefit Insurers?

Are you aware of the good news? Artificial intelligence (AI) provides ways to perform the complex task of converting loss-run data into structured format far more efficiently. These solutions are scalable, seamless, easy to operate, and simple to manage. Companies can process documents faster and streamline operational procedures using a range of AI techniques. This leads to fewer errors which imply fewer corrections and customer retractions.

A recent PwC report highlighted ‘that even the most elementary AI-based extraction techniques can save insurance businesses 30 to 40 percent of the time which would have otherwise been spent on such processes.’ 

Loss runs can appear in various formats from different sources — and they can run into many pages. It will be a tedious job if the information residing in these loss runs is to be manually entered into the spreadsheet. For instance, a midsized insurance carrier that processes 100,000 pages of documents yearly at 3 minutes for each page, would take approximately 5,000 person-hours to accomplish the task; at around USD 50 per hour, that’s $250,000. 

Now, what if the same company could deploy artificial intelligence?

By implementing an AI solution and assuming the 40% estimate above, the midsized insurer could save 2,000 hours for every 100,000 pages processed.

Insurance companies can fully automate the loss-run data conversion process into a structured format by training the software using advanced AI and ML techniques. The tool will then “read” the reports and extract relevant data for input into the underwriting system.

Do you know that a process that takes human hours to complete, automation completes in seconds results in reduced turnaround time in processing a submission? It helps carriers to automate Data Extraction Tools & Techniques and enables them to transform lost data from varying templates to a structured format. That’s not all; there’s more to it. You should know that the automation tool does not get tired and make mistakes which leads to higher accuracy & greater ROI.

What Will You Achieve by Automating Loss Run Conversions?

• Reduction in effort spent by underwriters on loss runs processes, resulting in capacity creation to concentrate on new business growth

• Improvement in underwriting quality as a result of decreased human errors during data entry

• Alleviation in time to quote, providing enhanced agent and client satisfaction

• Decreased cost of operations for loss run intake process

• Significant analytics that helps in framing intelligent business strategies

If you would like to learn more about the seamless automation of various important insurance processes, please feel free to schedule a call with our team today. Let us partner with your company and help you unlock the value in your unstructured data.