More Carriers Exploring Document Capture: Study

Insurers' adoption of document capture soared last year, and their use of the technologies -- including scanners, optical character recognition (OCR) and intelligent document recognition software -- is moving closer to the initial point of capture, Harvey Spencer Associates reports. Carriers spent $259 million on document capture software in 2009, a 30 percent jump from the $195 million insurers spent on document capture in 2008, according to a study by the market analyst firm.

The growth in insurance spending largely can be attributed to more property and casualty insurers investing in document capture solutions, says Harvey Spencer, the East Northport, N.Y.-based firm's president. "P&C is becoming more important" to the document capture market, he relates, noting that a growing number of carriers are adopting transaction, or in-process, document capture. "These carriers are beginning to recognize the importance of acquiring information at the point of capture," Spencer comments.

"More value is being moved to the capture process from the back-end process. If you can start understanding documents at the point of capture, you can process them more easily," Spencer explains. "Truncating at the point of creating or acquisition of a document is key. The longer something exists as paper, the more risk you run of someone changing it or copying it -- then you can't process it as efficiently."

As these services mature, more types of transactional documents can be captured, Spencer continues. Intelligent classification software and business rules, he claims, can be deployed to start to process incoming business documents, such as paper mail, faxes and e-mail attachments, in a way similar to that of a trained human clerk.

"The acquisition devices are changing," he says. "Instead of a scanner with a dedicated operator, you're seeing network scanners, copiers and multifunction peripherals -- intelligent devices that can download information to the screen [without human intervention]."

Among the new acquisition technologies is the smartphone, which P&C insurers are likely to use to take mobile capture to a new level, according to Spencer. In the report, he notes that smartphone cameras increasingly deliver sharp resolution and focus, making them "extremely effective" portable scanning devices for use in the field. Mobile capture, Spencer notes, can be applied not only to documents, but also to scenes of accidents. "It's quite possible to take pictures of the [license] plate or the VIN number and OCR that," he says.

"No one wants to talk about it because they consider it a competitive advantage," he contends, "but there's huge value out of mobile capture both in claims adjustment and applications."

The increased spend by insurers in 2009 represents 13 percent of the $1.99 billion total document capture market, according to Spencer. Traditionally, he says, health insurance companies led the insurance industry in adopting document capture services, due to the amount of data extraction required from paper claims. To reduce sorting costs associated with automated classification, however, a number of health insurers are searching for new solutions, Spencer relates.

"I think there's been a tech refresh in that space to eliminate presorting," he says. "The forms changed, so people had to refresh anyway."

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio