Maximizing Returns on People and Technology: A Universal Gain for The Claims Industry

The claims industry has made great strides over the years, with significant investments in people and technology that include upgrades to legacy systems, workflow digitization and career development opportunities. However, the industry continues to wrestle with inefficiencies related to these investments, largely stemming from challenges in aligning a diverse array of stakeholders.

Addressing these inefficiencies could significantly reduce costs for all stakeholders, including carriers, loss adjusters, brokers and vendors. Improving any segment of the claims value chain enhances the entire ecosystem, benefitting all parties involved in that chain. Ultimately, more efficient operations lead to superior outcomes for policyholders, resulting in an enhanced overall experience—a goal universally shared across the industry.

Following are three ways that current inefficiencies could be vastly improved through collaborative solutions:

Disconnected/siloed technologies can be eliminated through an API-integrated insurance software ecosystem.

A diverse range of stakeholders have all been busy making their own tech investments, with little thought to how they work together. For example, in the vehicle claims space, carriers are upgrading policy and underwriting systems while car rental companies and body shops are advancing their own technologies. With this current siloed approach to software development, because each entity has independently created tools tailored to their own needs, both carriers and policyholders lack a consolidated view of the entire process. This absence of integration prevents them from achieving the holistic experience and transparency in the claims resolution process that they deserve.

Collaboration among software providers to create an API-integrated insurance software ecosystem is one way that the industry could address this challenge and enhance the value proposition of each product. Though challenging, aiming to allow software platforms to exchange data across the entire claims value chain would enable each piece to effectively serve a broader customer base. Moreover, the improved communication and streamlined business operations that would result from such an integration would likely lead to reduced friction costs, which are expenses incurred due to inefficiencies in processes.

Enhancing data flows also offers the potential for improved data accuracy and speed in handling claims. When systems communicate effectively across different platforms and stakeholders, the likelihood of errors diminishes and data flows more smoothly. This leads to faster claim processing times, which directly benefits policyholders. Additionally, it would make it easier to provide real-time updates to all parties involved, enhancing decision-making and improving overall satisfaction with the claims process.

Inefficient allocation of resources can be resolved with data-driven, intelligent triage systems.

Claims organizations today are dealing with significant resource limitations. There is a growing scarcity of loss adjusters in the market, and this shortage compounds during large natural catastrophe events. Large weather events can generate thousands of claims requiring urgent attention from loss adjusters to assess damage, communicate with policyholders and conduct home visits before emergency remediation and rebuilding can begin. With fewer adjusters available to deploy, the process takes longer. Compounding the issue of adjuster scarcity, supply chain constraints are impacting vendors and suppliers, leading to their own challenges with availability of materials and response times.

In high-volume claim situations, the urgency of resolution varies significantly; some claimants require immediate assistance, while others face only minor inconveniences. This variability highlights the critical need for efficient resource allocation and strategic triaging, yet many adjusters still rely on manual, judgment-based methods. Better technology solutions are needed to streamline the process of triaging claims and collecting information and ensure that resources are allocated effectively to those in greatest need.

Adopting data-driven, intelligent triage systems could significantly enhance the routing and prioritization of claims to address these inefficiencies. An automated policyholder communication system, for example, could efficiently collect preliminary damage assessments, asking critical questions about safety, habitability, and immediate needs, and helping to prioritize phone calls, site visits, or direct contractor dispatch.

Embracing team-based service delivery with agile workflows can drive better outcomes.

Traditional claims handling typically involves assigning a single adjuster to manage a claim and acting as a gatekeeper throughout the process. This approach has led to the development of many workflows and protocols centered around one adjuster handling all aspects of a claim. However, for certain types of losses, a team-based service delivery model with more agile workflows can result in better outcomes for both policyholders and their insurance carriers.

Large property losses often require extensive evaluation of specific claim aspects, such as building repairs, contents assessment, and business interruption. Assigning a larger team to conduct the initial assessment can help to make the loss adjustment process faster and more accurate. This approach allows for the simultaneous evaluation of different components, enabling the collection of detailed information to proceed efficiently. Team-based adjusting also provides a learning opportunity for newer adjusters to work alongside experienced adjusters to facilitate knowledge transfer. Adjusting teams can also be supplemented with additional professionals like contents evaluators and appraisers to further accelerate the claim’s progression.

Technology tools play a critical role in this collaborative effort, allowing team members to work together seamlessly in a digital environment. In some cases, remote imaging and other advanced tools can be leveraged by desk-based resources to support field teams from afar, further increasing efficiency and reducing delays.

Addressing these inefficiencies could significantly boost the overall value proposition for all.

The insurance industry has made significant strides in enhancing the efficiency of its claims resolution processes. However, it is now at a crucial juncture where failing to address the remaining inefficiencies and industry fragmentation issues could undermine much of the initial investment.

Addressing inefficiencies in these key areas will require robust industry leadership, but this collaboration is well worth the effort. By integrating disconnected technologies, enhancing claims triaging, and embracing agile workflows, we have the potential to significantly improve the overall claims value chain. As stakeholders recognize the ways that enhancing the ecosystem can enrich their own value propositions, the clear benefits to the bottom line will provide compelling motivation for change.

Smith is president of Canadian operations at Crawford & Co.