The insurance industry continues to adjust to the impact of theeconomic downturn while it plans for the future. During such atransitional period, partnering with independent adjusting firmsmakes a lot of sense. In addition, the adoption of new technologiesby independent adjusting organizations continues to streamline theclaim cycle. This has enabled adjusting firms to delivercost-effective claim management and improve policyholderservice.

The key to improving the claim adjustment process is building afully integrated bridge between the carrier's internal IT system(s)and the adjusting firm's system(s), thus allowing for complete dataflow-through and transparency throughout the claim-managementprocess. While many adjusting firms have been slow to adopttechnologies and update their claim management systems, the morevisionary claim organizations have realized the opportunities thatcome with the use of advanced technology. Adjusting firms at theforefront of investing and deploying new systems fully grasp thegains that can be realized on the bottom line of their carriercustomers and their own businesses, regardless of economiccycles.

Better Claim Management

The old adage that "knowledge is power" relates to the very coreof the insurance industry. Knowledge of each claim and itslifecycle is critical to creating higher customer satisfactionlevels among policyholders while reducing costs for

insurance carriers. In other words, more knowledge equalsreduced costs. The only way to create true claims omniscience isfor all parties to have access to real-time claim data.

Traditionally, an insurance carrier e-mailed, faxed or phoned inclaims to independent adjusting firms, all of which required thatdata be manually entered. From the point at which a claim wassubmitted, 24 to 48 hours could pass before the claim was enteredin the adjusting firm's system. As claims were processed byadjusters, the carrier (and policyholders as well) had no real-timeaccess to the status of any claim. It was not uncommon forpolicyholders to repeatedly call their carrier requesting updates,which in turn generated calls or e-mails from carriers to adjustingfirms. Then, either the carrier or adjuster called policyholdersback with an update. Multiple (costly) touches were needed tocommunicate a simple status update or other pertinent informationto policyholders. This added complexity served to inflate costs andcycle times and created a "double whammy" to the insurance company,as good customer service was compromised in addition to the cost ofadjustment.

When an independent adjusting firm has access to the carrier'sinformation systems, greater efficiency can be realized. Once apolicyholder reports a claim and the insurance company enters thatin its system, the adjusting firm receives the assignment and hasimmediate access to all data to begin the claim process. "Best"practices would dictate that the adjusting firm is able toimmediately make first contact with the insured through a callcenter before an adjuster has been assigned to the claim.Throughout the claim process, real-time updates are made byadjusters and are accessible to both parties. Carriers can alsodecide to grant policyholders access to their claim status via theInternet. In a manner similar to tracking an online order orpackage, policyholders can log into the carrier's system and viewthe claim's progress, thereby reducing overhead costs, eliminatingmany call center contacts, and freeing up adjusters.

Because the interface is web-based, policyholders can accessthis information anytime, anywhere without ever making a phonecall.

The insurance industry has long lagged behind in the rapidadoption of technology. Although some adjusting firms have recentlyadded web-based platforms, many have not fully integrated all oftheir systems with that of their clients to provide a comprehensiveview of the full claims, estimating, and billing process.

Total integration of all systems is necessary to create a trueflow-through environment. Systems requiring integrationinclude:

• Enterprise Resource Planning (ERP) and / or CustomerRelationship Management (CRM) systems.
• Claim estimation and claim dashboard systems.
• Web-based customer interface systems.
• Human resource systems.
• Accounting systems.

Considerations for Integrating with AdjustingFirms

For insurance companies seeking better integration and claimmanagement with adjusting firms, there are several key criteria toponder before integrating into a client's system.

Automating the internal system. Before anindependent adjusting firm can receive information from aninsurance carrier, the organization must have an automated systemin place. Adjusting firms still receiving faxes or telephone calls,and manually inputting data into an archaic system will continue tolag behind. Claims need to be sent electronically from insurancecarriers.

Full flow-through communication. Whilereceiving data from the insurance carrier is critical, the tangiblebenefits for the carrier come from full flow-through andtransparent claims information passing between the two. This meansthe adjusting firm receives claim data directly from the carrier,and that the carrier's system receives data about how the adjustingfirm is processing it. This robust data exchange between a carrierand its claim adjusting firm is imperative to build a long-termrelationship between the organizations.

Both firms need IT cooperation. Securityconcerns will be a top priority for both companies' IT departmentswhen conversations about data sharing begin. It is critical for thesystem to address all security threats. The IT departments mustwork in tandem to understand that the security measures takenthroughout the integration process will ensure a smoother installand a secure environment for the final product.

Multiple carrier systems. While an insurancecarrier operates within a single environment, a large independentadjusting firm could easily be tapped into more than 50 carriers'systems at once. Plus, each insurance carrier uses a differentsystem to manage its claims process. Carriers must partner with anadjusting firm that is agile and can work with different carriersystems to promote data integration.

Off-the-shelf claim adjusting solutions do notexist. There are many claim software solutions availableon the market, but none provide full integration between thecarrier and the adjusting firm. Because each carrier has a uniqueoperating system, each integration is also unique, requiring newprogramming that can take anywhere from one to eight weeks to writeand implement. Be leery of promises of too quick or simpleintegrations between carriers and their adjusting firms.

It's an Investment

Convincing companies to invest in any non-critical item at themoment is extremely difficult, which means carriers must identifywhich independent adjusting firms are willing to make the criticalinvestment in systems and technology integration. While ignoringthis tech trend may not cost an adjusting firm business today, itmost certainly will tomorrow. More importantly, early adoptingadjusting firms illustrate a commitment to carrier customers andcan solidify a stronger, longer-term relationship

Win-Win Benefits of Integration

Data integration is the foundation of any partnership between aninsurance carrier and an adjusting firm. Like all goodpartnerships, there are benefits for both. Most importantly, thebenefits are also quite tangible to policyholders.

Integration speeds up the claim cycle and provides real-timedata to policyholders -- two factors that directly impact thepolicyholder's experience and satisfaction level. Integration alsoincreases the amount of information being communicated between thecarrier and the adjusting firm while decreasing the humaninteraction needed to gain that knowledge. Lengthy phone calls canbe avoided thanks to the accessibility of all pertinent informationin one user-friendly system.

Integration allows the adjusting firm to provide superiorservice, therefore building better relationships with the carriersit serves. Automation also greatly improves the efficiency of thesystem and creates quality control measures. Finally, by having allthe data in one place, adjusting firms are better equipped tomanage resources, analyze data, and identify trends that furtherdrive productivity and profitability in the future.

Carriers are challenged to respond to claims more swiftly thanever before. Often their response determines if they maintain thepolicyholder relationships. The carriers in turn are applyingpressure to independent adjusting firms to provide faster, moreaccurate claim processing while still upholding superior customerservice. Adjusting firms that meet this challenge by implementingan integrated bridge between a carrier's internal IT system andtheir own systems are setting themselves apart to lead the pack.And carrier companies continue to notice.

Listed below are points for consideration when planning systemintegration, along with the top five potential benefits.

What to Ask an Independent Adjusting Firm

Insurance carriers can increase customer satisfaction anddecrease costs by partnering with an independent adjusting firmthat can integrate seamlessly into their internal systems. Anycarrier considering systems integration with its independentadjusting firms should be prepared to ask the followingquestions:

• Does your company have the ability to integrate your claimsystem with the multiple insurer claim systems of my firm?
• Is your claim system Web-based?
• What level of security does your firm have with respect tofirewalls, disruption of service and loss of data?
• Is your claim system integrated with all estimating programsthat are used by my firm?
• Is your claim system synced with and supported by a call centerfor customer relations?
• Is your claim system tied to your financial system to easilyreconcile billings and payments?
• Do you have staff capable of developing and implementing atechnology integration project with insurance clients?

Five Reasons to Integrate

1. Create a more seamless, real-timeenvironment between company and adjusting vendors to provide ahigher-quality claim experience for insureds.

2. Reduce costs associated with lost, delayed,or incorrect information flowing between your company and yourvendors supporting the adjustment process.

3. Provide a faster and more transparentenvironment to evaluate and address key claim process performanceissues between the company and adjusting firm.

4. Reduce redundant or lost claims between theinsurer and adjusting firm.

5. Allow claim management more time to focus onmeasuring and improving customer service as opposed totroubleshooting and damage control.