Unlike snowflakes and finger prints, all claims handling processes are not unique. As such it is possible to standardise many of the elements of the claims process by following best practice guidelines. Below is an excerpt from The Actuary magazine discussing this very point. You can read the whole article here.
On the topic of best practice, recently we worked with Airmic to produce a summary of their claims best practice guide 'The 8 Components of Claims Handling Excellence'. Their guides are usually reserved for members only but we've been given exclusive access. You can download it here:
Insurance: Improving claims management
Focus on best practices
There is a common misconception that all claim processes are unique. While final execution of the process may be highly customised, most process elements - first notice of loss (FNOL), segmentation and assignment, adjudication, investigation, subrogation and so on - are actually very similar when you break them down to their core processes.
With a BPM platform, insurers can reuse this commonality to quickly transform claim operations for competitive advantage.
BPM technology provides insurers with the ability to leverage a core best practice claim process by storing those elements in a common repository of policy and procedures, which can be applied across products and/ or lines of business. Applying the best core business practices across the organisation ensures the optimal claim process is available and can be invoked by any adjuster within any area of an organisation. This model can be readily specialised and extended based on which markets or segments insurers serve.
Moreover, insurers can use BPM to add ’specialised’ layers of instruction to baseline processes and rules by specifying just what will be different in specific situations.
Rather than having to build the process from scratch every time, insurers can focus on those specialised layers alone, thereby reducing expenses and dramatically improving time to market. This approach greatly enhances agility.
By focusing on opportunities to optimise and reuse best practice business processes, insurers can break the manual or exception claim processing that they have grown accustomed to supporting. Insurers that do this successfully create competitive advantages. They benefit from increased customer satisfaction and higher market share by enforcing best practice processes that help insurers reduce loss adjustment expense and claim leakage.
Automated case management
Claim best practices look fantastic when they’re mapped on whiteboards, but often fall short when insurers don’t have the ability to execute them. Moreover, each claim settlement process requires a customised approach that takes into consideration the specific characteristics of the claim.
A strong case management platform helps insurers integrate legacy improvement assets into claim improvement strategies. Insurers can use BPM technology to unlock these static tools and achieve functionality that previously was not possible.
In addition, an efficient case management platform allows insurers to begin automating subsets or entire portions of end-to-end claim processes. To contain costs insurers need to automate work that is of little value to the organisation, and let an intelligent system manage the claim process steps that require little or no human intervention. Insurers can realise efficiency, expense and productivity gains by using work automation to manage simple claims.
To do that, insurers should eliminate paper-intensive, inefficient and error-prone file processes. Adjusters need intuitive business tools that can automatically take action based on claim information. A BPM-enabled case management approach supports an optimised claim process by providing a work engine that can organise and manage complex pieces of work across operational silos. It also provides end-to-end visibility into a claim event or a claim operation - something all claim managers love, but are often forced to do without.
The right case management solution can break down claim processes into an infinite number of sub-claim units, each of which is able to be routed, managed and monitored individually, while still providing insight and control. Adjusters and managers can leverage real-time analytics to get comprehensive views of claim operations any time. They have the ability to view and re-route work as needed, enabling a dynamic response to complex claims or shifts in work volume. Insurers can use this insight to drill down into specific tasks to understand which processes are working well, and which are not.
Insurers can apply these concepts to track, measure, and report on an infinite number of sub-units under the primary claim event. This further drives best practice processes and can be extended to other lines of business; it also gives insurers the flexibility to systematically integrate claim processes that are historically segregated or require manual intervention - a must for insurers trying to contain overall claim costs or bundle new product offerings.
Build Claims Excellence into your Organisation
Our world class claims handling software ticks every box in Airmic's guide, so get in touch today and find out how claims handling excellence can be built into your organisation