Insurance claims processing is still categorized by some insurers as “if it’s not broken don’t fix it.” Some have taken steps to make incremental changes to their existing claims processes and systems by applying Lean process methods, and introducing data mining and predictive analytics. Although for the most part the results have been positive, these small enhancements led to small benefits.

Insurers need to remember what claims processing is about. It is about insurers fulfilling the promise made to policyholders to compensate them for their loss in return for a stream of premium payments. Because of the antiquated claims processes and legacy systems that insurance companies have been incrementally enhancing, the ability to fulfill the promise has become more complex. It has led to claims professionals being internally-focused, since they have to navigate through their internal systems and fragmented data bases, and has also led to treating the policyholder (the customer) with unintended neglect. Policyholders (whether they are individuals or organizations) remember when promises are not kept on time, or not kept at all.

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