“Square pegs into round holes: something that will not succeed as attempted, except possibly with much force and effort.” Wiktionary
This Wiktionary definition is a remarkably accurate description of the use of personal insurance-designed claims software by commercial insurers over the last decade or so. Many commercial insurance firms (CL) have adapted personal insurance (PL) claims software to their commercial claims processes and, with much force and effort and a certain measure of ingenuity, have made some progress – but not as much as attempted or possible today.
Why do so many commercial insurance companies continue to use claims software designed for personal insurance – a significantly different business process?
Until recently, commercial insurers simply had no other option. Personal insurance firms led the way toward more efficient, customer-focused claims processes 10-15 years ago, and software companies quickly responded with programs to fit their needs. Commercial insurance was much slower to catch on.
Another reason is that claims play such a critical strategic role in the overall success of CL firms. Nearly 70 percent of revenue is spent on claims, and roughly 20 percent of that is spent managing the claims process. CL firms understand that improving the efficiency of the claims process not only improves the bottom line, it also has the potential to enhance the customer experience and, consequently, retain existing customers. But many are reluctant to change their existing claims software because it may be flawed but at least it’s familiar.
Unfortunately, commercial insurance claims are typically far too complex for personal insurance software to handle. CL claims often involve multiple stakeholders, different currencies, several countries or regions, complex coverage verification and many other intricate factors that require much more from the software that manages them. Cannibalizing PL-focused claims software to fit commercial claims needs may be better than nothing, but this approach simply isn’t necessary, or even advisable, any longer.
Fortunately, fully-integrated commercial insurance claims management software designed for the more complex commercial insurance claims environment is now easily available.
If you’re not familiar with the advantages a fully-integrated commercial insurance claims management software system can provide, consider the need for complex collaboration in many commercial claims scenarios. Suppose there is a claim made on a typical commercial insurance policy that involves multiple currencies, three or four countries and several interested parties that helped spread the multifaceted risk.
Despite these complexities, the commercial customers involved expect a unified voice and a streamlined process that delivers an efficient, swift resolution. Sound familiar? Don’t you expect the same from your personal insurance claims?
With rising customer expectations, the objective should always be to make the commercial claims process appear seamless and hassle-free to customers. They may not realize that behind the scenes of their claim, a host of lawyers, loss adjusters, lead underwriters, co-insurers and repairers in many different locations need to be part of the claims management workflow. They all need timely access to various documents and data for many different reasons, but this access must be customized with appropriate restrictions.
These are challenges that simply don’t arise in most personal insurance claims, and PL-focused software is not designed to handle them. On the other hand, currently available claims management software designed for commercial claims:
- Provide a single online claims file.
- Enable user interface options among all interested parties.
- Deliver integrated process and seamless workflow management capabilities for complex policy details, multiple parties, different currencies and national regulations in real time.
- Provide a comprehensive audit trail on all claim interactions.
A Singular Solution
In short, claims software designed from the start for commercial policies provide a single app for complex case management, data capture, transaction processing, and customized/restricted data sharing among multiple stakeholders. That saves time, money and, in many cases, prevents loss of customers unhappy with a lengthy, cumbersome claims process.
There are many other ways that fully integrated commercial claims management software can help CL firms streamline the claims process to make it more efficient and customer-centric. A great example is reduced claims leakage. All insurers try to avoid paying erroneous claims. In the commercial claims environment, this is accomplished through a combination of measures that PL-focused software cannot handle.
Commercial-designed claims software helps prevent claims leakage through:
- Accurate coverage verification for complex policies.
- Accurate, automatic deductible processing covering multiple currencies, the complex interplay between coverage level excesses and policy-wide deductibles, etc.
- Accurate reinsurance recoveries.
- Identification of unusual claims patterns.
The Bottom Line
The main reason for switching to CL-designed claims software is the same reason many commercial insurers adopted, and adapted, PL-designed claims software in the first place – improved efficiency, reduced costs and happier customers. The integrated process and seamless workflow management of commercial claims management software provides a light-touch/no-touch approach that reduces the time, risk, and cost of manual of tasks, or the awkward processes necessary for adapting PL-based software to commercial apps.
Today’s commercial claims software also provides a comprehensive audit trail for all interactions, with standard templates ready to deploy. Data configuration can be easily matched to policy structures to improve the efficiency of data capture and to reduce rekeying and duplication of effort. The best commercial claims software can be deployed as standalone systems or as part of a fully integrated end-to-end IT solution.
There is no longer any reason for CL firms to continue wasting time and money trying to adapt PL-based claims software to their claims processes. Isn’t it time your commercial insurance customers receive the efficient, swift resolution they routinely experience, and expect, in their personal lives?
Below is a brief checklist of what to look for in a good commercial claims software solution.
Checklist for Fully Integrated Commercial Claims Management Software
Claims Management Capabilities
- Full claims life cycle management, including FNOL and coverage verification.
- Highly configurable product capability with line of business templates.
- Claims data management with integrated workflow.
- Highly configurable workflow allowing for fast track (low touch/no touch) automation.
- Multiple currency capability for all transactions.
- Document production and support for document management.
- Support for involved parties and insurable interest.
Claims Processing Capabilities
- Claims transaction management.
- Claims data management with integrated workflow.
- Payment terms and schedules.
- Payment processing and message integration.
- Statistical financial transaction management.
- Management information, including dashboards.
- Third party integration.
- Component suite integration.
- Co-insurance processing.
- Ceded reinsurance integration.
Mike Jones is vice president and head of sales North America for Xuber. Jones, who joined Xuber in 2012 from Applied Systems, has over ten years experience in providing technology solutions to the insurance market.