Considering how central claims are to most insurers' business processes -- that, for most policyholders, their main interactions with their carriers are at the time of submitting and following through on a claim -- one would think that the industry would be more proficient at handling claims. Yet, despite years of analysis, investigation, debate and technology investment, the conventional wisdom is that, at most companies, the claims process needs dramatic improvement.
To some extent, insurers get a bum rap for their purported lack of claims prowess -- not surprising considering that policyholders (whether individuals or corporate entities) typically are undergoing some kind of stress or loss at the time they file a claim. Still, there usually is truth in a generalization, and the fact remains that there are tremendous opportunities for insurance companies to do a better job of managing and paying claims. In other words, they have to "break with tradition," in the words of TowerGroup senior analyst Cynthia Saccocia -- one of the speakers at an Insurance & Technology webcast on "Maximizing the Claims Process" that took place earlier this month. According to Saccocia, where claims are concerned, breaking with tradition means standardizing claims procedures, automating claims processes and improving customer service. By addressing these relatively uncontroversial mandates, she added, carriers can reap benefits such as improving turnaround times, reducing processing costs, increasing productivity and minimizing fraud or overpayments.
The benefits of a "non-traditional" approach are being enjoyed at Medical Mutual of Ohio (MMOH), where John Shoemaker, manager of financial investigations, has overseen a successful initiative to "address fraud in today's environment," he told the webcast audience. In the past two years, MMOH, which handles an average 96,000 claims a day, has been able to detect more than $9 million in fraudulent claims through a combination of steps including implementation of early-warning technology from VIPS and a shift to electronic submission of claims (65 percent of claims are now submitted electronically), Shoemaker reported.
The webcast audience also heard about ACORD's role in supporting initiatives in areas such as electronic claims submission. This is being facilitated by ACORD-sponsored standards efforts, including P&C claims implementations in the areas of investigation, notification, subsequent report and status inquiry, reported Mark Orlandi, program director, P&C/Surety, ACORD.
Similarly, solutions provider CSC is moving forward with the implementation of new systems such as a single ACORD-based claims engine that can surround multiple administrative engines, according to Tim Kennedy, director R&D, Financial Services, CSC. This kind of technology relies on the use of Web services to support channel integration, he explained to the webcast attendees. Additionally, it creates a common user interface; incorporates workflow, imaging, document management and Business Process Management (BPM).
So, at the risk of mixing metaphors, it's evident that accomplishing a break with tradition is not a pipe dream -- it is a real, achievable goal. Carriers need not go it alone. There are best practices, partners and solutions out there, all geared toward improving key business processes and helping companies become truly connected enterprises.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio