Claims and business capabilities: Customer and operational views

Many insurers want to transform their claims capabilities, capitalizing on the digital age and the advanced technologies reshaping our world. For the past five years or so, many companies have modernized their core claims administration systems, either by replacing a legacy system with a more modern solution or by enhancing existing systems with new features and functionality for the digital and mobile age.

These initiatives form the foundation for digital transformation, providing the insurer with more flexibility and agility to respond to new opportunities and leverage new technologies. As insurers move beyond core modernization to strategies that will truly transform claims, the business capabilities required fall into two broad categories: those that are customer-centric and those that are operationally focused.

Let’s take a look at both.

Customer-centric capabilities

In property and casualty claims, “time to settlement” is one of the most important determinants of both the loss payment amount and the customer’s satisfaction. Generally, the faster a claim is settled, the better.

Insurers have been tackling simpler, low-value claims for years and have increased the percentage of these claims, often handled via straight-through processing. However, there are many complex and multi-faceted claims.

For example, Workers’ Compensation claims tend to be more complicated, as they involve treatment plans for injured workers, which often require multiple visits to healthcare and rehabilitation providers. Claims for auto accidents – which can often involve multiple vehicles, injuries, or even death – require continued interaction over a longer time.

Ditto for large commercial property claims and many claims in the specialty lines world.

This increasingly complex and evolving ecosystem means insurers must have the ability to both partner dynamically and communicate effectively and efficiently with all parties involved. It is quite difficult to partner effectively if the systems and data flows between partners are not optimized.

Vitally important for insurers is the ability to personalize communications and support an omni-channel environment. Creating digital content efficiently and enabling business users to customize correspondence, statements and other communications has become a mandatory requirement.

Operationally focused capabilities

The productivity of claims professionals is more important than ever, and insurers are seeking ways to alleviate various challenges. Facing a wave of retirements, and with not enough new talent coming into the claims world to fill that gap, new challenges are arising.

One way to address the talent gap is by leveraging technology solutions that handle simpler claims automatically, allowing adjusters to manage more complicated claims. This also improves the loss adjustment expense (LAE), a key metric.

Another big drag on productivity happens when adjusters must toggle between multiple systems to access the information they need, such as pictures or videos of damage, police reports, recorded statements, loss reports, and communication between claimants and the insurer or agent.

Meanwhile, fraud is always top of mind. The perpetrators of organized fraud rings are very sophisticated, which means investigators need advanced tools to evaluate data from a range of sources to uncover anomalies and patterns. Easy access to unstructured and structured data is essential to successful fraud efforts.

On top of all these challenges is compliance. Compliance with state-by-state regulatory requirements is an important and mandatory business capability in claims.

For example, many rules dictate when and how communications must take place with the policyholder. To adapt to these changes, innovative insurers use software solutions to create and deliver communications while meeting these requirements, thus avoiding financial penalties.

Claims as a competitive weapon

As the claims environment evolves and insurers leverage more real-time digital data, the importance of claims will continue to increase. Claims have always been important, but insurers need technology that will help them be more proactive.

In turn, this helps them assist customers manage their risks and dramatically improves claims processing when something bad occurs. In a world dominated by social media, where people are influenced by reviews and viral posts, reputation management becomes a big deal, and the way a claim is resolved can be a huge contributor to positive or negative perceptions.

One of the pivotal ways that insurers can address all of these business capability requirements and utilize claims as a competitive weapon is to manage digital data as it flows throughout the claims ecosystem and is integrated into claims processes. With the right solution, insurers can capture, create, and manage digital content – especially content in unstructured formats – making the claims experience the best it can be for both customers and your organization.

Mark Breading is a partner at Strategy Meets Action. Mark is a recognized expert in advanced technologies and their implications for the insurance industry. He has exceptional knowledge of the customer experience, analytics, digital content management, and maturing and emerging technologies. You can follow him at @BreadingSMA on Twitter.
Mark Breading

Mark Breading

Mark Breading is a partner at Strategy Meets Action. Mark is a recognized expert in advanced technologies and their implications for the insurance industry. He has exceptional knowledge of the... read more about: Mark Breading