Insurers can drive costs out of their claims process with better supply chain management (SCM), a new study from Boston-based
The report, “Claims Supply Chain Management 2.0: Moving From Cost Management to Service Delivery,” says insurers will be well served to make broader use of SCM to iron out operational kinks in their claims process.
“SCM was―and to a great extent, still is―seen by carriers as a procurement function focused on controlling cost and quality through the request for information (RFI) and request for proposal (RFP) processes and vendor contract development, including service-level agreements,” the report, authored by Aite Senior Analyst Stephen Applebaum, states. “But more visionary carriers see SCM 2.0 as an opportunity to improve overall customer experience and policyholder retention through superior service delivery.”
Nowhere is this potential greater, Applebaum contends, than in property/casualty auto insurance claims operations, due to the uniquely complex transactions and large number of vendors involved.
The report says carriers utilizing SCM can rationalize currently fragmented supply chains by forging fewer but deeper relationships with large national suppliers that boast standardized national offerings and a wide range of service capabilities.
Moreover, the technology can help with a longstanding goal of many insurers, to encourage straight-through processing and ease self-service.
“Claims self-service (in which policyholders submit claim reports and select required vendor services) is a major area of opportunity for carriers in terms of cost and service improvements, but only a handful of the largest carriers are pursuing it aggressively or effectively,” the report states. “P&C claims supply chain vendors that recognize the opportunity to take a more significant and valuable role in insurance claims service delivery, learn to articulate that role to their insurance company clients, and learn how to innovate and adapt their own service delivery accordingly will be the beneficiaries of this evolution in supply chain management.”
