Jersey City, N.J. - ISO has identified a six-point strategy where technology now exists for the effective management of claims through improved visibility of the claims handling process, establishing best practices and a more accurate assessment of injuries and recovery implications.Statistics from the Insurance Research Council (IRC) have shown that claims cost inflation has risen at an average of around 7% every year since 1997, with the average bodily injury claim cost rising from $4,804 in 1997 to $6,711 in 2002.
In line with this, ISO's research has shown that the No. 1 goal for insurers is reducing claims handling costs. Fifty-eight percent of insurers identified increasing staff knowledge and training as their key concern, while 25% cited enhanced claim handler efficiency.
The six key areas include:
1. Identifying Industry Trends. Powerful tools are available to provide real-time company-wide and industrywide benchmarks for claims and for costs of associated services.
2. Visibility of the Claims Handling Process. A number of new techniques in tracking claims activity enables handlers to produce more accurate and consistent settlements, empowers them in the negotiating process and assists management in providing needs-based training for staff.
3. Comprehensive Management Information. Detailed management information enables supervisors to monitor claims handler activity so that best practice is adhered to and the management of claims remains efficient.
4. Granularity of Injury Assessment. Injury identification based on internationally-recognized coding and an integrated medical encyclopedia allows for a more accurate assessment of an injury's severity, recovery prognoses and rehabilitation.
5. Detailed Medical Protocols and Recovery Profiles. Linking likely treatments to injuries helps ensure very accurate settlements and identify unnecessary treatments. Coupled with responsive severity ratings, organizations can create updatable recovery profiles to enhance the accuracy of claims estimates.
6. Accurate Loss of Earnings Estimate. Integrating national earnings statistics and incorporating more factors into claims assessment processes makes estimates more precise.
"Reducing claims handling costs by settling a claim fairly, equitably and as quickly as possible is in everyone's interest," says Lee Fogle, vice president of ISO. "There are many factors involved in achieving this and we want to help the insurance industry as a whole drive toward these targets."
ISO provides a number of tools to assist carriers in their claims processes, including a "Measures of Excellence" service, which carries out a full review of an insurance organization's closed bodily injury claims files and workflow processes; ISO Claims Outcome Advisor (COA), a system designed to helps claims handlers administer the multiple dimensions of bodily injury claims; ISO Liability Advisor, a tool designed to help claims professionals better evaluate accident-related comparative liability claims; and ISO's databases and services that classify and evaluate a variety of risks and detect potential fraud.
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