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Does Your Insurance Organization Have a Vision for Claims Process Optimization?

Manubhav Jain

Principal, Insurance Consulting, EPAM
  • Insurance

Simply put, insurance is a promise made by an insurer to an insured. When the time comes, the insurer fulfills this promise by paying the agreed upon amount or services to the insured as a result of a claims process.

Ever since the insurance industry began to upgrade their technology landscape, special attention has been given through the investment of millions of dollars to build or procure the best claims management platforms. However, these sophisticated platforms require multiple human touchpoints before a claim can be processed fully and finally. These claims management platforms are often not well integrated with peripheral systems, which also results in more human involvement and an increased cost per transaction.

Every insurance company strives to have an overall vision for improving customer experience and increasing profitability, but do they have a dedicated vision when it comes to claims processing? Here are some important factors to consider when developing your own vision statement for claims processing:

1. Ease of Reporting/Filing a Claim

Life happens — and that’s when an individual or business needs to file a claim. While the claimant is dealing with their life event, filing a claim should be hassle-free and as straightforward as possible. Ideally, the claimant will be able to provide all required information related to the claim at once or in a single session. The claimant should also be well-informed on the steps involved in processing this claim as well as the expected timeframe for a claim to be processed. To streamline these processes, implementing modern technology such as user-friendly mobile apps, AR/VR and teleconferencing allows the reporting of first notice of loss to be clear-cut and easy for the claimant to understand. In cases where a broker is involved in the claims process, the broker should be able to report the loss via standard forms and documents via digital channel.

2. Case Assignment and Eligibility Determination

Nothing is more disappointing to a claimant than waiting a long period of time to learn whether or not their claim was approved and to what extent they are covered — especially if the claim ends up being denied. Usually, a long delay in eligibility determination is caused by inappropriate case assignment. An inexperienced case manager takes longer to verify coverage, calculate losses and prepare correct documentation. Case assignment and eligibility determination needs to be rules-based, fully automated or at least semi-automated, and the claimant should be notified as soon as a decision is made. There should be as little human involvement as possible during claim intake into a claims platform.

3. Integrated Provider Networks

Insurance companies often rely on a network of third-party providers or adjusters. The speed of claims processing is directly proportional to how well insurance companies have integrated with these third-party providers and how well integration channels are built to transport information swiftly. Geocoding within your provider network enables you to reach out to providers in the closest proximity. Equip your provider network with tools that would enhance the engagement and overall experience with the claimant. Provide them with ways to capture assessments in true digital formats rather than handwritten or scanned documents.

It is equally important to ensure that claimants have a good experience with payments at the end of the claims process. Having multiple electronic payment modalities such as ACH, virtual card and direct payment — as well as traditional print payment — is a crucial aspect of your overall claims strategy.

4. Claims Auditing and Fraud Detection

With the speed and accuracy of advanced data analytics and machine learning, it is now possible to detect claims leakage and predict any fraudulent behavior before it’s too late. There should be several controls (preferably automated) throughout the claims process in order to quickly process genuine claims and, at the same time, receive alerts in the case of high-value or suspicious claims. There should also be triggers sent to peripheral teams such as actuarial and finance teams whenever a claim amount exceeds a particular threshold.

By utilizing data analytics and data mining technologies, insurers can analyze past fraud to produce a value for the propensity of fraud. For every claim entered by an adjuster, the system automatically provides a score to indicate the likelihood that fraud has occurred. Continuous updates to scoring algorithms are paramount in accurately detecting fraud every time and with any type of claim. Emphasizing fraud training and awareness, implementing checks and balances, and adapting quickly to changing market conditions are critical for a successful fraud detection and claims strategy.

Final Thoughts

In summary, to truly optimize your claims process, modernize notice of loss workflow, streamline case assignment, automate manual tasks, augment complex process steps (involving human decision-making) with cognitive processing/machine learning, and harness the power of data analytics to support claims decisions.

Every insurance organization should not only have a contractual obligation to provide better claims support, but a moral responsibility to handle claims efficiently and with empathy towards the claimant. To achieve this, partner with a consulting group that can provide a combination of technology, tools, approaches and insights to reshape your claims vision.

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