Significance of Straight Through Processing in Insurance
Jan 30, 2023
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A survey by Deloitte highlights the following key points that are driving the adoption of technology and automation in the insurance sector:
96% of the survey respondents admit to accelerating digital transformation of their companies
70% of the respondents are targeting technological augmentation for improving process efficiencies
68% of the respondents are vying to improve the consumer experience through adopting the latest technology
The automation of claims processing and autonomy of adjudication powered by artificial intelligence presents a promise of efficiency boost and customer satisfaction that the insurance industry is in desperate need of today. Underscoring this fact is McKinsey’s report on the role of data analytics in P&C insurance, stating that about 95% of the policies in P&C are expected to go through STP in the near future, without the need of an underwriter.
That said, it makes total sense to discuss the importance of adopting automation in insurance in the form of STP and documents processing, and how a good STP rate can help you offer improved customer experience.
What is Straight Through Processing (STP)?
Straight Through Processing is a term coined for documents that pass through a computing system straight through to the finish from the very beginning, without needing any human intervention or inputs from any human operator.
This falls under the ambit of intelligent documents processing, and begins at the source, right at the moment a physical document is scanned to be digitized, or when data is received in a digital format at the source.
The fact that the entire workflow of the insurance process can be automated through Straight Through Processing does generate a certain level of skepticism regarding its effectiveness. Therefore, there are certain ways to measure its performance in mathematical terms. The percent STP, or %STP, is the quantum of workflows that reach the consumer error-free and without needing to be reviewed by a human, measured in percentage terms. Typically, a three-stage workflow exists in automated document processing and computing:
Document processing - It is a function of document automation software - its capabilities, and accuracy in processing insurance documents
System intelligence - It depends on how capable the artificial intelligence of the automated computing engine is - its capability to adjudicate on the processed documents autonomously
Results - The combined capabilities of the two factors above either produce correct results or end in errors
The number of instances resulting in the desired results from the workflow above define the %STP of an automation ecosystem for an insurance company. You will typically want this to be as high as possible. However, the interdependency of documents processing and system intelligence control the overall flow of information through the system, and hence, errors may creep in.
It is, thus, imperative that accuracy be imbued in the entire Straight Through Processing at the very genesis, that is, right at the documents processing stage. Introducing accuracy at this stage helps a lot in downstream workflows.
Let’s now take a look at the kind of documents that can be processed using Straight Through Processing.
Straight through processing in insurance and its applications
The fact that STP promises shorter cycle times, quicker turnarounds, and better customer satisfaction makes them a great tool to have for businesses that need to process high volume of documents on a daily basis. This places insurance companies at the forefront – with thousands of documents passing through the systems every day, an intelligent solution that takes some manpower off from the lesser tasks is a great help at the end of the day. In the context of insurance, some of the documents that can be passed through STP in real-time are:
Identity verification documents - IDs like drivers’ licenses, passports, etc. – the ones needed for processing policies – do not need human verification and are capable of cross-checking the data held within government databases.
Tax forms - Processing tax forms through STPs drastically reduces mistakes and even brings errors to notice that may have come up during filing.
Insurance applications - STPs are meant to reduce turnaround times by speeding up the transactional processes. By implementing this solution, insurance application processing can be drastically sped up and be error-free.
In fact, there is a definitive difference between the workflows that an insurance company experiences with and without an STP in place, as depicted below.
As is obvious, with prompt responses made possible through STP in the loop, the waiting times have been eliminated in the cases where there is successful adjudication achieved autonomously in the process. In fact, it is possible to greatly reduce the waiting times for consumers while the documents processing concludes and the claims are settled. Certain software available in the market makes it possible to imbue high efficiencies in document processing, greatly reducing any possibility of errors further down the line. Docsumo can help you create a high-efficiency workflow through automating document processing with incomparable industry efficiency and accuracy.
Doscumo for improving STP efficiency
Docsumo is an intelligent document processing platform that helps companies reduce processing costs by 70% while being 50 times faster than manual processing methods. The accuracy achieved in documents processing is to the tune of 99%, allowing for high downstream efficiency in STP as high as 95%. Doscumo is an end-to-end solution covering the following aspects of document processing automation:
Automated insurance underwriting, automated claims process, settlements, and compliance.
Data capture and analysis from insurance forms and applications.
Identity verification by comparison of photos with selfies, by matching with multiple documents, and through verification from other databases.
Reduction of processing time to less than 30 seconds.