It’s been said a million times, but the claims handling process is really the moment of truth for an insurance firm. It’s where the business can do most to control costs, ensuring that claims aren’t overpaid through a lack of care and attention. But it’s also their central locus of customer service, with timely responses and a high standard of communication contributing hugely to satisfaction and retention.
To say that new technologies can transform this area of business is nothing new. Writing for the Financial Times in 2013, McKinsey & Company principal Ferruccio Lagutaine predicted that insurers who modernise the claims process will add as much as 38 per cent to their net profits within five years. He added that “dabblers, or those that take no action at all” could drive their firms in the opposite direction, putting around 30 per cent of their potential profits on the line.
But what do the new wave of claims management technologies actually bring to the table, compared with the legacy hardware and software that until now most insurers have depended on?
Whether you’re thinking about implementing a fully-fledged, end-to-end solution such as Guidewire ClaimCenter, or merely to consolidate and integrate existing systems, here are five of the ways that technology can boost the efficiency of your claims handling process.
1. Integration and automation
Many insurers today continue to rely not on one or two legacy systems, but on several, introduced at different times and for different workloads. As such, one of the biggest resource drains in the claims process is a lack of integration and automation – often, adjusters are required to use data from dozens of different sources, or even to re-enter records by hand when they’re hosted on incompatible systems.
As mentioned above, the current state-of-the-art solutions offer a much higher degree of integration, potentially keeping your data in one place from submission through claim closure. And because the movement of that data is automated, the risk of human error creeping into the claims process is much slimmer.
2. Reduced training times
Furthermore, while it’s less obvious, integration and automation aren’t just ways to save time on the job and to prevent unecessary mistakes – they also allow for much faster staff training. If an adjuster only has to get to grips with one system, with a modern and sleek user interface, it’s much simpler to bring their skills up to standard than if they had to understand half a dozen older ones.
3. Improved communication
Claims handling is also often inefficient because of the number of stakeholders involved, from the adjusters themselves through to brokers and the insured. Almost all of insurance firms’ business processes are prone to stalling for this reason. With new technology, however, the scale of this problem can be drastically reduced – think of always-on and automated communications, or innovative self-service solutions like customer-facing mobile apps.
4. Smarter assignment of work
With improved access to information comes the potential for more data-driven decision making. You might, for example, leverage business intelligence to identify complex claims and then allocate them to your most experienced adjusters. This smarter assignment of work will ensure that all claim lifecycles are minimised as far as possible, regardless of their size and difficulty.
5. Quicker settlements
Finally, all of the above – plus the savvy use of data to make on-the-fly decisions about payout limits – allow insurance firms to settle claims much faster than ever before. Today, many insurers have systems in place to fast-track certain claims. With high levels of automation and business intelligence, settlement can become almost instantaneous – a huge win for customer satisfaction.« Back to News and Opinion