Straight Through Processing in Insurance: A Comprehensive Guide to True STP

What is Straight Through Processing (STP) in Insurance?

In today’s fast-paced insurance landscape, the demand for faster, more efficient processes has led to a surge in automation and automated solutions. One concept that has gained traction, though not widely used across the insurance world, is Straight Through Processing (STP). STP refers to the ability to automate an entire workflow—from the moment data is entered to the final outcome—without the need for human intervention. In an ideal scenario, STP allows insurers to process claims or underwriting decisions seamlessly, reducing delays, minimizing errors, and freeing up valuable resources.

However, while many insurtech companies claim to offer Straight Through Processing, the reality is often different. Most systems still require manual reviews, data inputs, or approvals at critical stages. Whether it’s claims being flagged for manual handling or underwriters needing to intervene for risk assessments, the promise of full automation often falls short.

That’s where Inaza comes in. Inaza has created True Straight Through Processing (TSTP)—a fully automated solution that truly eliminates manual steps in both claims processing and underwriting. In this blog, we’ll dive into what makes Inaza’s True STP unique and how it’s transforming the insurance industry.

Why Most “STP” Isn’t Truly Straight Through

The promise of STP is automation that requires no manual effort, yet most solutions fall short of delivering on this promise. In both claims processing and underwriting, human input is still required at various stages:

• Manual Claims Assessments: When claims are flagged for review or fall outside predefined criteria, human adjusters must step in, slowing down the process.
• Underwriting Exceptions: In underwriting, complex cases or incomplete data often require underwriter intervention, causing delays in policy issuance.
• Data Entry and Review: Even with automated systems in place, manual data input and review are often needed to ensure accuracy, introducing potential errors and bottlenecks.

These manual touch-points disrupt the smooth flow that STP is supposed to provide, leading to inefficiencies and higher costs.

What is True Straight Through Processing (TSTP)?

True STP redefines automation by removing all manual intervention from both claims processing and underwriting. With True Straight Through Processing, every step is fully automated, from the moment data is collected to the final decision—whether it’s approving a claim or issuing a policy.

Imagine receiving an FNOL (First Notice of Loss) email from a claimant, and within seconds, your integrated software has already processed the claim, completed fraud and coverage checks, and initiated the payout. For something as simple as a $2,000 fender bender, the claimant is instantly notified, and the funds are sent—no human involvement needed. This allows insurers to handle small claims seamlessly, freeing up valuable resources for more complex cases like bodily injury (BI) or larger claims that require personal attention. With True STP, your team can focus on high-priority claims while automation handles the routine ones effortlessly. This, in a nutshell, is Inaza. 

What sets TSTP apart is Inaza’s focus on “Data to Action.” Traditional STP often follows a three-step process: Data to Insights to Action, where data is analyzed to generate insights that humans then use to make decisions. Inaza’s TSTP cuts out the middle step, allowing insurers to move directly from data collection to action, accelerating processes and removing inefficiencies.

Inaza’s TSTP is designed for:

• Claims: Automating the entire claims lifecycle, from FNOL to settlement, without any human intervention.
• Underwriting: Streamlining the entire underwriting process, from application submission to policy issuance, using real-time data to make instant decisions.
• Holistic Approach: Inaza’s True Straight Through Processing treats claims and underwriting as interconnected parts of the same process. By integrating underwriting insights into the claims workflow, such as checking pre-existing vehicle damage through images, reviewing claims history, or using underwriting block lists, insurers can minimize errors and fraud in claims processing. This holistic approach ensures that when underwriting is accurate, it directly enhances the quality and efficiency of claims handling, creating a seamless, reliable process.

Key Concerns About Full Automation

Insurers have long strived for full automation, knowing that it would lead to faster processes, lower costs, and better customer service. However, the challenges of full automation in claims and underwriting have made it seem nearly impossible to achieve. The key concerns are:

1. AI Mistakes: AI, while powerful, is not perfect. Relying solely on AI for critical decisions—whether it’s a claim approval or a risk assessment in underwriting—comes with risks. AI systems can make mistakes at both the input and output stages, misinterpreting data or generating incorrect conclusions. There’s also the question of AI reviewing its own decisions, which raises trust and reliability concerns.
2. Cost: Fully AI-driven systems, particularly those powered by LLMs (Large Language Models), can be prohibitively expensive to build, maintain, and scale. This makes it difficult for insurers to justify the investment, especially when human oversight is still required in some capacity.
3. Auditability: In a heavily regulated industry like insurance, decisions—whether in claims or underwriting—need to be fully auditable. Legal and compliance requirements demand transparency, and fully automated AI systems can be difficult to audit. Insurers must ensure that every action is traceable and compliant with regulations, which can be a challenge for purely AI-driven processes.

How Inaza Solves These Issues

Inaza’s True Straight Through Processing addresses these challenges by striking the perfect balance between AI and traditional technology:

• Balanced AI and Data Streaming: Instead of relying entirely on AI, Inaza uses AI only where it provides clear value—such as in fraud detection during claims processing or risk assessments in underwriting. For routine tasks, Inaza employs reliable, cost-effective data streaming technology, reducing the chance of errors and ensuring reliability.
• Cost-Effective: Inaza’s hybrid approach is far more affordable than fully AI-powered systems. By using AI selectively, insurers can reap the benefits of automation without incurring the high costs associated with comprehensive AI models.
• Auditability: Every step of the process, from claims decisions to underwriting approvals, is fully auditable within Inaza’s underlying data warehouse. This ensures transparency and accountability, helping insurers meet legal and compliance requirements. Whether it’s tracking a decision made by AI or a step in the automated workflow, everything is documented and traceable.

Benefits of True STP for Claims and Underwriting

With True STP, insurers can transform both claims processing and underwriting, delivering a range of key benefits:

• Speed and Efficiency: TSTP automates the entire process, from FNOL to claim settlement, and from application to policy issuance, cutting down processing times dramatically.
• Reduced Operational Costs: By eliminating the need for human intervention, TSTP significantly reduces operational overhead, allowing insurers to handle more claims and policies without increasing staff.
• Improved Accuracy: TSTP minimizes human error by automating data collection, assessment, and decision-making, ensuring more accurate outcomes in both claims and underwriting.
• Scalability: As insurers grow, TSTP allows them to handle increasing volumes of claims and policies without requiring additional human resources, making it easy to scale into new markets.

The Future of True STP in Claims and Underwriting

As the insurance industry continues to evolve, Straight Through Processing will play an increasingly important role in shaping the future of both claims processing and underwriting. Insurers that adopt True Straight Through Processing will not only gain a competitive edge through faster processing times and lower costs, but they’ll also improve the customer experience by offering quicker resolutions and seamless policy issuance.

By embracing True STP, insurers can meet the growing demand for efficiency, accuracy, and transparency, while positioning themselves for long-term success.

If you’re ready to see how Inaza’s True STP can revolutionize your insurance operations, contact us today for a demo or to learn more about how we can help you streamline your claims and underwriting processes.