A new study from Celent, a research and consulting firm thatfocuses on information technology, lists key technology elementsfor insurance companies to implement to improve their systems toanalyze claim technology requisites. It also presents several casestudies of companies who implemented changes and how it affectedtheir business.

According to one section in the 52-page study, which as a wholefocuses on effective technology usage in the entire insuranceindustry, there are four key claim technology elements that canimprove organizational structures and staffing levels of insurancecompanies.

The first is the establishment of an electronic case file.According to Celent, all claim information should be receivedelectronically, or scanned into a system if need be. This allowsfor better claimant experiences and more accurate reserving, aswell as easing compliance issues. Secondly, Celent said arules-based workflow and skills-based routing system for claimsshould be implemented. This allows for claims to be modified andadjusted more easily. Thirdly, the company recommends automatingfraud and subrogation referrals and medical bill reviews. Lastly,Celent said adjuster should concentrate on becoming wireless, whichwill allow field adjusters to transmit site reports, estimates,photos, and other information in real-time, and even issue paymentin the field for uncontested claims.

The report also contains many case studies of companies who haveimplemented all or part of these suggestions. Two of the studiesare reprinted below.

34

FCCI Insurance Group/Digital Claim Files

FCCI Insurance Group (FCCI) is a regional commercial linesproperty/casualty insurer based in Sarasota, Fla., doing businessin 13 states in the Southeast and Midwest. In 2005 FCCI had netpremiums written of $550 million, about half of which was workers'compensation.

In 2002, FCCI began a two-year phased deployment of ImageRight'sdocument management solution. Today, when a paper document arrivesat FCCI, it is scanned, indexed, and stored in a SQL Serverdatabase. An FCCI workflow administrator identifies the documenttype (e.g. medical bill or subpoena), and using the ImageRightworkflow engine, routes it into a designated workflow. The entireclaim file is digital — in addition to scanned documents, it cancontain digital faxes, e-mails, photos, voice, and videos.

Fully digital claim files provide many benefits to FCCI. Thesize of the support staff has been reduced; digital documents arenow accessible to the people who need them in 24 hours or less; twopeople (such as an adjuster and an attorney) can look at the samedocument at the same time; work can be allocated among claimoffices more easily, and FCCI's disaster recovery and businesscontinuity plans are stronger.

Indiana Farm Bureau/Wireless Claim Adjusters

Indiana Farm Bureau provides laptops with 3G wireless Internetaccess to its field appraisers. Appraisers use mobile handhelddevices that sync with the laptops to gather information, and theycan send information from their laptops to the home office in realtime without returning to their field offices to plug in.

By eliminating drive-time to the office and giving appraisersthe ability to check assignments in the field, this technologymakes them more efficient, and rapidly getting information back toclaim adjusters lets them not only provide better service to theclaimant, but also lets them gauge severity faster and forward thatinformation to reinsurers more quickly. After a major hailstorm inApril 2006, appraisers were able to handle two cars per hour spreadover a wide geographic area.

With the increased efficiency of its own appraisers, IndianaFarm Bureau also has been able to terminate its direct repairprogram (in which body shops write estimates and appraisers reviewthem) in 80 of the 92 counties that it serves, which lets it keepcloser control of losses.

For a copy of Celent's full report, go to www.celent.com.

Interested in more technology tools/software news and in-deptharticles? Head over to Claims' technology tools/software channelfor more information.