Upgrading claims systems is a high priority, ranking among the top three projects for 41 percent of large property/casualty carriers and 23 percent of midsize carriers, according to “Novarica Market Navigator: US Property/Casualty Claims Solutions 2012.” This year, insurers will select between 65 and 75 new systems, compared with 50 to 60 claims systems last year.
“P&C carriers are looking for ways to drive growth and improve operations, and claims is one of the areas they are investing in,” said Karlyn Carnahan, Novarica principal and an author of the report. “It’s clear that claims plays a critical role in the overall success of the carrier.”
The claims experience is critical to customer retention as it is the only direct interaction most customers have with the carrier, and a bad claims experience is a top reason for non-renewal. In the soft market we are currently experiencing, retention is a critical objective and a source of competitive advantage for property/casualty insurers, the report says.
However, many insurers are still using legacy claims systems that were designed to manage the financial implications of claims rather than the customer service aspects, the report says. Legacy claims systems typically were siloed from policy and customer systems, which makes tasks such as coverage verification difficult and complicates data integration for business intelligence or predictive analytics. Claims handling also has been labor intensive, paper based and involved multiple relationships to manage, the report says. And, because of their age, these legacy systems also are increasingly difficult and expensive to maintain.
Now a much wider range of claims solutions is available, including features that support automated processing, management of claims functions, integrated workflow management, task or process management, as well as document generation and management. Further, user interfaces have improved to include more navigable screens, contextual help, adjuster portals, software “wizards” to open new claims, scripting and recursive questioning, the report says, which enable carriers to create more intuitive processes and deliver consistent service.
The report, which offers an overview of the marketplace and profiles 34 vendor solutions, provides an overview of key components:
- Administrative features: nearly as important as those lines of business, rules or workflows that are already built within the system is the relative ease with which additional capabilities can be added
- Billing: including electronic submissions and bulk payment to vendors
- Catastrophe: including features such as the ability to define catastrophes by peril, geography, date or other criteria
- Contact management: typically capture contact information for all parties to the claim including the vendors
- Disability management: to look up recovery guidelines and jurisdictional information, calculate recovery dates, and manage return-to-work programs
- Disbursements: for managing checks and drafts (issuing, tracking and reconciling payments)
- Documents
- First notice of loss/first report of injury: capabilities for scripting for the claims intake coordinator. Reflexive questioning allows a tailored process designed for optimizing the customer service process
- Fraud detection: looks for scoring to identify potential fraud, automated alerts and red flags, advanced analytics, workflow processing to route claims to a special investigation unit, and other tools to identify fraud patterns
- Litigation management
- Medical case management: injury detail maintenance such as tracking diagnoses, medical records, treatment plans, and links to ICD9/10 codes or jurisdictional data
- Mobile/multi-channel access: secure browser-based self-service portal access for agents, policyholders, or claimants to submit notice of loss and access claims information
- Recoveries: modules to support subrogation and salvage
- Reporting and analytics: pre-built standard reports and ad hoc analytic tools to deliver operational and performance reports
- Reserve management: manual and statistical reserve tracking track changes to reserve and payment detail information on a claim, with reports
- Vendor management: ability to associate providers with multiple networks, support tracking service agreements including multi-tier service agreements and scheduling of provider services, 1099 modules
- Workflow: Tasks can be generated and assigned manually or automatically through business rules. Typical features include notes, diaries, reminders, and calendaring capabilities
