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Seizing the Claims Advantage

Insurers are deploying maturing workforce management, advanced analytics and flexible core technologies, often in new combinations, to achieve competitive distinction in their claims service and operational effectiveness.

Claims is a natural area to plumb for opportunities for increased operational efficiency, and P&C insurers continue to explore those opportunities. But they also are eyeing claims as a way to differentiate themselves through improved customer service and operational effectiveness enabled by maturing technology.

Carriers have adopted configurable core claims systems and business process management technologies, and have begun to embed analytics at various stages of the claims process to support automation, decision support and more sophisticated fraud detection. In addition, insurers have shifted their focus from technology improvements intended to enhance the adjuster experience to enhancements intended to improve the claimant experience. In claims, just as in other areas of the insurance value chain, insurers are striving to meet the anytime/anywhere demands of consumers who expect instantaneous service delivered via their preferred channels, including their mobile platform of choice and both self-service options and proactive outreach from their insurers.

"Historically a great deal of technology investment was about adjuster experience, customer retention and loss adjustment expense management," notes John Mullen, VP and North American leader for P&C insurance solutions at Capgemini Financial Services (New York). "Now that's just the ticket to the dance. Our call to action today is for insurers to leverage claims as part of their brand platform, not just for customer retention but for acquisition."

Insurers have by no means wrung all of the inefficiencies out of their claims organizations, Mullen acknowledges, but they need to redirect efforts to achieve improvements in the effectiveness of claims decision making and indemnity management rather than simply tightening loss adjustment expense, he asserts. Such improvements require more targeted and refined data strategies, applications and analysis, Mullen emphasizes.

"Carriers must be able to marry operational data with financial, underwriting and actuarial data to become more predictive in their analysis of what drives total claim outcome," Mullen says. "They need more precise foresight into a host of factors, such as developing loss trends, fraud, or even the best repair suppliers or external lawyers."

These advances need to be pursued as part of an overall improvement in the value proposition of the brand, Mullen stresses. "It's not about reducing indemnity," he says. "We have a commitment -- it's about the most efficient fulfillment of the underwriting commitment."

Maturing technologies provide a variety of ways for insurers to stand out among their peers by providing better service to claimants in their time of need, suggests Donald Light, a San Francisco-based senior analyst with Celent. "Many claimants will be in emotional distress, and one way to make the experience better is to give them personal support," he says.

Customers are reassured by knowing that there are individuals at the insurer who are there for them and will reach out proactively as the situation demands, Light elaborates. "The claim handler or adjuster has to rely on technology to see the whole process and where the claimant is in that process, and whether he or she might need to push a certain part of the process along," he notes.

Light sees the potential for improvements in supply chain management whereby adjusters and even customers can have real-time communications about status or costs with contractors. Workflow technology and desktop analytics both can smooth the flow of file handling and enable managers to evaluate the performance of claims handlers and claims offices, he advises.

These and other opportunities are informing transformational initiatives across the insurance industry. Here are three carrier case studies that exemplify the trend:

Workforce Management: VSP Automates to Meet Claims Demands

Analytics: Accident Fund Builds Through Teamwork

Core Modernization: CNA Upgrades in Search of the Truth

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

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