Claims: A Look Ahead at the Art and Science of Claim Technology
Industry and its technology vendors will continue to make impressive strides in automating various claims-related tasks, but the real change will come from improved integration of claims with other systems so companies can use claim data to improve a variety of products and services.Claim technology has historically revolved around the automation of two major parts of the process -- the "notebook," used to log pertinent information about the claim, and the "checkbook," used to manage claim payments and reserves.
Looking ahead, the industry and its technology vendors will continue to make impressive strides in automating various tasks, but the real change will come from improved integration of claims with other systems so companies can use claim data to improve a variety of products and services.
Many claims organizations are paying for the sins of the past, and will need to upgrade their legacy technology over the next few years so they can create new hubs for the exciting things they'll want to do.
Once they've achieved the appropriate level of flexibility, though, they'll be able to add a lot of important spokes to that hub. Primarily, they'll be able to take advantage of better integration in the claims process. This includes better collaboration among claim professionals, agents and customers; excellent data to support sharper segmentation for a better outcome for both the claimant and the shareholders, and quicker resolution of immediate needs on claims. Our Claim Expediter auto solution, for example, helps The Hartford dispatch claim handlers and get claims handled quicker in order to more rapidly return the claimant to the pre-event state. Although this is currently state-of-the-art, projects like this will be commonplace in the future. Once the modern hubs are in place, these improvements are not difficult to adopt.
To date, the bulk of technological innovation in the insurance industry has occurred in the distribution and product spaces, but claims will be seen as a way for insurers to differentiate themselves from competitors. That's where the art and the science come in. Below are a few examples.
The Science:
Today we break down claims by type or size. In the future, though, technology will allow us also to locate and segment workers' compensation claims where extra attention can lower the indemnification of the claim and get a better service outcome. Or we'll be better able to segment auto claims for luxury cars, for example, so we can hone in on these claims and become more operationally excellent in handling them.
In the future, there will be more use of automated decision-making for routine claims activities. For example, once a claim has been approved, systems can take over and make additional disbursements within specified parameters without necessarily involving human claim handlers. That way insurers can deploy claim professionals where their higher skills are needed.
Claims information represents a tremendously under-tapped resource at most insurance companies, but technology can and will be used to provide much more quantitative insight to the product development, actuarial and marketing disciplines. For example, when there's a loss that a policy does not cover, technology can bring that to the attention of other disciplines within the company. In a particular case we may be saying "no" to the claim, but we should be saying "yes" in product development.
The Art:
A lot of resource information is available for claim handlers today in many different places, but getting to it requires effort. In the future, just-in-time embedded intelligence will go out and grab additional information exactly when the claim professionals need it, similar to the context-sensitive information currently embedded in income tax software. For example, a worker's compensation claim handler would be able to click a link to get information on specific symptoms associated with a certain type of soft-tissue injury.
Technology will enable mass customization for claim offerings. This would, for example, enable a large national enterprise to specify a unique and detailed process for handling its claims, including a set of notifications when certain, pre-determined losses occur -- or allow service levels oriented toward the individual customer's needs.
In the future, insurance claims information will be better integrated into the increasingly automated supply chains insured by the insurance industry. Businesses are starting to use radio frequency identification (RFID) tags, electronic bar codes that serve as beacons to help them track inventory in a fixed location or in transit. RFID tags have interesting potential to reduce or document product losses or fraud.
Once insurers lay the foundation by upgrading their systems to create open and agile architectures; are able to capture data at appropriate granularity; and can integrate with distribution, service, underwriting and other systems they enable tremendous innovation. It can be a lot of work, but once a company's hub gets there, it can move full speed ahead into the future.
This article is for general information only. The Hartford and its affiliated companies disclaim all liability for use or reliance by anyone on the information contained in these materials. In no event will The Hartford and its affiliated companies be liable for damages, including, but not limited to, direct, indirect, consequential, incidental, special and punitive damages.
Michael Bernaski is CIO of Property-Casualty eBusiness & Technology at The Hartford.
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