More P&C and life insurers are modernizing or replacing their claims processing systems so they can take advantage of data, analytics and digital channels, as well as improve efficiencies and better serve customers, according to a new report from Novarica, a research and advisory firm focused on insurance business and technology strategy.
According to the report, “Business and Technology Trends in Claims,” more than 40 percent of insurers are either replacing or enhancing their claims systems this year, planning to do so, or engaged in major enhancements. The report, authored by Novarica assistant VP research and series editor Steven Kaye and associate Iain Prendergast, is part of a series that looks at the impact of technology across industry sectors and functions.
According to Kaye and Prendergast, claims management continues to be an area for strategic innovation as technology allows carriers to increase efficiencies, deliver a better customer experience, and glean new insights through easier access to data. “Carriers with leading claims organizations are implementing modern solutions with tools that make it easier to meet their goals and objectives. Information gleaned from the claims management process can also be used to further enhance the underwriting process at carriers, providing something of a virtuous cycle when carriers have the ability to turn data into actionable information,” the authors wrote in the report.
Top technology initiatives include data and analytics engines, which help insurers conduct predictive fraud scoring and loss mitigation. These technologies can be used to detect fraud earlier in the claims process and identify otherwise hidden patterns, according to the report. For workers’ comp specifically, these tools can forecast medical costs and be utilized for early intervention with case management and predict the likelihood of someone returning to work, the authors say.
New mobile, video and GPS data capabilities provide data capture that will improve first notice of loss (FNOL), the report says. Claims efficiencies can be gained from greater use of digital channels, which will continue to create electronic rather than paper processes for claimants, and enable real-time integration with third parties. For example, new claims entry and FNOL can now be initiated through mobile channels like smartphones and tablets, and the claims process is being enhanced through integrated desktops that gather data from third party data sources in real time, track alignment to best practices and carrier standards, generate and track work-plans, facilitate collaboration, and develop real time dashboards and reports.
Investments in new core claims systems are often being done in the context of an overall strategic replacement of the policy admin, billing, rating and/or underwriting project, many times with an integrated package suite, according to the report.
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