Property & casualty (P&C) carriers that upgrade their operational capabilities with a focus on better claims management will increase efficiency, reduce costs, and improve customer and agent service, according to Deloitte’s new report, “Driving Operational Excellence in Claims Management.”
“As P&C insurers continue to face uncertain market and economic conditions, claims management is sure to have a central place in their strategies. The cost of pay-outs and expenses is the largest spending category, often accounting for up to 80 percent of premium revenues,” said Rebecca Amoroso, vice chairman, Deloitte LLP. “Insurers need to leverage claims data to provide actionable information about what drives loss and expense, and put in place the business processes and supporting infrastructure to address these findings. The goal is to align the right claim with the right resource at the right time.'”
To enhance operational excellence in claims, the report suggests the following:
Leveraging advanced analytics – Using data acquired at “First Notice of Loss” to effectively forecast outcomes for individual claimants and to segment claims can transform claim management by improving the allocation of claim resources, increasing efficiency, improving the estimates of claim severity, and reduce claim cycles.
Supplier management – As insurers rely more heavily on third-party suppliers, a supplier management strategy cannot only contain costs, but can also enhance the customer and agent experience.
Legal cost management – A performance-based approach uses data-driven analysis to help develop a streamlined, reusable process for organization selection, case governance, and traditional cost management. This can be combined with predictive modeling for litigation management to help create a disciplined process that assigns cases to the most appropriate resources for the specified resolution, reducing the total cost of the claim.
Technology enablement – Developing an overarching approach to how and where to invest in new capabilities can improve efficiency and increase the likelihood that the technology infrastructure effectively supports the organization’s initiatives to enhance operations.
Fraud detection – Insurers that adopt advanced fraud detection tools and techniques that promptly identify claims with a high propensity for fraud can reduce losses and may gain a reputation in the industry of being hard on fraud.
“An effective operational excellence strategy can lead to more stable and predictable loss costs,” said Pil Chung, Deloitte’s claims management leader. “It can also positively impact operating expenses, increase overall claim service ratings and policyholder retention and improved regulatory compliance.”
SOURCE: Deloitte www.deloitte.com
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