A couple of months back, Celent’s Catherine Stagg-Macey posted some perspectives on the evolving role of technology in claims processing. She noted that in the industry as a whole, “there is a very uneven use of modern claims technology.”

This is an area ripe for revolution. Evoke the term “claims processing” to any audience, and visions of mounds of paperwork and bureaucracy and slowness come to mind. In fact, claims processing is more likely than any other function to get under the craws of agents in their dealing with carriers.

This is an area where a little bit of software can make a huge difference. But it’s more than a revolution in claims systems. It’s about process. A little while back, I spoke with another Celent analyst, Donald Light, about the coming revolution in claims processing. “We see claims as one of the more active areas in terms of software acquisition or replacement,” he said.

Light reported he is seeing change on two fronts: first, mid-sized and smaller insurance companies are moving to single packaged solutions, often part of larger suites also covering policy administration or billing. For larger companies, there’s movement to replace aging mainframe systems.

New claims systems include a lot of new functionality as well, Light adds. “The hallmarks of a modern claims systems is having capabilities in workflow, decision automation through rules and content management,” he explained. “Those may be embodied within a claims solution itself, provided by a vendor, or they may be mixed and matched between claims solutions and independent enterprise solutions. An insurance company might get buy a business process management package to wrap and extend some of this claims functionality.”

Claims processing now commands about 10% to 15% of new development budgets, Light estimates. This ranks as one of the top IT investments carriers are making lately, along with policy administration and IT infrastructure.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology. He can be reached at joe@mckendrickresearch.com.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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