Claims handling is a long-term top priority for P&C insurers. Customers expect fast and quality claims service, and if they don't get it, they might opt to take their business elsewhere. While carriers continue the effort to deliver faster and better claims service, they need to be certain they are maintaining claims integrity and avoiding overpayment or paying fraudulent claims. Achieving and maintaining this fine balance between claims speed and quality presents carriers with a multitude of challenges and requires more than just the latest in technology.
According to J.D. Power in its 2014 Property Claims Satisfaction Study – Wave 2, carriers can significantly improve customer satisfaction with the claims experience by providing an accurate timeline of claims processes and by helping customers avoid settlement negotiations. J.D. Power came to this conclusion after measuring the property claims experience satisfaction levels of 1,740 homeowners who had filed homeowner damage claims beginning June 1, 2012 -- examining settlement, first notice of loss (FNOL), estimation process, service interaction and repair process.
J.D. Power also concluded that when insurance companies enhance their ability to set claimants' expectations of how long it will take to settle claims, they can significantly improve overall satisfaction.
[Read more about J.D. Power's conclusions here: Insurers Take Satisfaction Hit from Sandy]
It all sounds simple enough. But if it was that simple, improving the claims process wouldn't still be so high on the priority lists for so many carriers.
To achieve the ideal claims process and service level, carriers continue to face a formidable set of challenges. Many carriers I've worked with recently confirm they grapple with inefficiencies in the claims process, with a number specifically highlighting integration challenges when dealing with information from third-party systems.
Whether carriers are working directly with consumers or through call centers, agents or other third-party services such as rental car agencies, estimators or appraisers, there is a need for quality integration – and, as the industry well knows, integration is rarely an easy task when working with systems that differ in technology and data models. Yet, achieving the ideal claim process is dependent on making interaction between these various systems more seamless.
Carriers also strive to speed up processes to settle claims for customers more quickly; requiring improved handling of the needs of claimants early in the process, while also improving back-office operations.
For many companies, even if the claim is handled accurately, the process is simply too slow to satisfy the expectations of today's consumers. These companies often continue to rely on legacy systems, and processes that require manual steps that could very well be automated with the right technology. The result is decreased customer satisfaction at the most critical point in the carrier/customer relationship. Slow claims processing can also lead to non-compliance with regulatory mandates that require expedient claims settlement.
The pressure carriers face to handle claims more quickly can lead to another challenge: the risk of processing fraudulent claims or overpayment. Attempts to speed processing without the investment in modern technology often does more harm than good. Better a slow and accurate process, than one that focuses on speed at the cost of quality.
Dealing with a wide range of adjuster skill sets presents yet another hurdle to achieving speed with quality. Unless the process and systems enable the assessment and assignment of a claim to the best qualified adjuster, the chances of a quick, legitimate and consistent settlement will prove elusive.
When optimizing the claims process, we can't leave the Special Investigations Units (SIU) stone unturned. The process needs to be able to separate the vital few claims appropriate for SIU evaluation to avoid unnecessary added expense and cycle time.
Business Process Optimization and Tech Tools
For many carriers, an effective approach to address the challenges of claims processing is through business process optimization (BPO) to enable improvements through increased efficiency and effectiveness of processes. However, BPO typically goes hand-in-hand with supporting modern technologies to enable the enhanced capabilities.
[Previously from StoneRiver: Saving crucial minutes in insurance sales]
Via BPO, insurance companies can create streamlined claims processing to improve efficiencies while also delivering the experience that best leads to customer satisfaction.
Modern claims software should support end-to-end claims processing and streamline claims settlements. The most popular solutions offer configurable rules and intelligent workflow, and are designed to ensure consistency, transparency and speed -- three elements critical to customer satisfaction.
When evaluating available claims processing tools, the 'must have' list should include: carrier online inquiries for claim status; configurable business rules; and an architecture that allows for easy integration with other systems.
Other capabilities for consideration include; dashboards to provide managers with insight into team productivity; case management for complex claims and processes; and business rules to help carriers quickly identify possible fraud.
Finally, claims software tools should be flexible, so users can set up preferences based on their individual needs and experience levels.
New technologies should offer new capabilities, such as offering managers a central view of customers and business partners across an enterprise, and consolidation of customers and business partners into a single system to gain valuable insight into the relationships between common customers.
Those carriers that create an effective claims BPO strategy and leverage the latest software tools for improving the claims settlement process are the ones most like to please their customers, while holding the line on costs.
About the author: Boyd Fittes is VP of product management for StoneRiver. He has more than 20 years of experience in the insurance industry, currently focusing on common areas, shared services and claims functions for StoneRiver's P&C Stream products.