Claims System To Save HB $80K

Claims handling is one of the few opportunities that insurance companies have to show value to customers, but traditional claims-handling procedures involving cumbersome communications with multiple parties do little to comfort customers in need.

For example, until recently at HB Group (Mississauga, ON) "sales and service people would take the initial claims information, the claim would be set up and then assigned to an adjuster, who would get back to the client within 24 to 48 hours," relates Keith Dalgleish, vice president, e-commerce.

To improve service HB Group initiated what it called the "One Step" program at the end of 2000, dedicated to accomplishing as much as possible during the customer's first phone call. "We hoped to eliminate delays experienced by clients," Dalgleish says. To do that, adjusters, administrators and supervisors, as well as all the firm's preferred repair shops and rental companies, needed to be tied together through "acommunication mechanism that would allow for a process that provides the customer with the fastest response time and coordination with industry vendors," he adds.

HB was approached by InsuroCity (acquired by Toronto-based Castek in July 2001) with a proposal to use the Web to handle claim assignments, as well as dispatch and exchange relevant information among all claims parties through an ASP (application service provider) solution, according to Dalgleish. Intrigued by the proposal, HB considered a second vendor but stuck with InsuroCity because "they were geographically close to us and they were quite willing to deal with our own workflow as part of the process."

Having decided to run a 90-day pilot, running all automobile physical damage claims from the carrier's Ontario business, HB hired a former employee familiar with HB's systems architecture to develop an extract of all policies in-force from the carrier's legacy system, displaying all coverages and information-for only CD$2,500, Dalgleish reports. The extract was set up to run once a week and FTP'ed to the ASP.

HB staff contributed workflow analysis and browser front-end training for all the participants. All other technology development was handled by InsuroCity, according to Dalgleish. The pilot of HB Group's application, called ClaimsPath, was launched in June 2001. "We finished the pilot on-time in September and found we had an overall 40 percent time reduction in initial...first-notice-of-loss claims reporting," Dalgleish says.

The solution includes a claims journal that documents every communication and has built-in triggers for ensuring service-level performance, Dalgleish says. If a message to a vendor has not been read within a defined period, an automatic message is sent to the adjuster.

Today, "75 preferred body shops, 130 rental company locations, 65 general contractors, our salvage dealer network, electronic replacement vendor and a property assessment company" are on the system, Dalgleish relates. Functionality has been extended to the Maritime provinces, and the Western provinces will be added during 2003.

Big Savings

Not only has acceptance of the application been universally positive, according to Dalgleish, but the value to the carrier has been impressive. HB Group initially paid the vendor a per-transaction fee, but going forward Castek will be paid per assignment by the participants. Meanwhile, HB has "conservatively estimated CD$80,000 savings for 2003," he asserts.

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Case Study Closeup

COMPANY:

HB Group, Mississauga, ON, more than CD$4.7 billion in assets.

LINES OF BUSINESS:

Group and personal lines home and auto.

VENDOR/TECHNOLOGY:

Castek (Toronto) ClaimsPath ASP claims communication and management platform.

CHALLENGE:

Increase claims processing ease and efficiency.

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio