While the recession has had a devastating effect on many industries, insurance professionals are successfully navigating the tough economy. This isn’t to say that they are immune to the recession’s influences, but it is a testament to their resilience and ability to create leaner, more efficient ways of doing business.

Many insurers have responded to challenges in the market by enhancing workflows to reduce cycle times, control operating costs, and improve policyholder satisfaction. Some have achieved great success by adopting new claims management solutions. However, scouring the market for the appropriate vendor and solution to fit a specific company’s business model is no trivial task; it requires intense scrutiny and evaluation. To ease the decision-making process, insurers should be aware of four critical points so they can select the claims management solution that will produce the best outcome for not only their organizations but also the people they serve.

Online Security

Media reports about high-profile cyber attacks and the proliferation of malicious computer viruses highlight the constant need to safeguard data. Insurers are an especially attractive target to hackers because of the type of data they store about policyholders. Because an embarrassing security breach can expose personal data and damage customer relationships, online security is a top priority. An effective claims system can thwart cyber attacks through the use of secure encryption technology and other precautions to maintain the integrity of policyholder data. Such measures also keep the claims system running virtually 24/7, even in the event of a major catastrophe.

System Capacity

Claims volume and activity can easily double or triple in the months following a major event. A reliable claims management system will scale to handle this increased load, and it will use data redundancy and off-site backup systems—all in real time—so that insurers are prepared for just about any scenario. Any downtime or diminished functionality can impede adjuster productivity as well as aggravate policyholders who may be willing to talk about a bad claims experience with family, friends, and acquaintances on Facebook or Twitter.

Integration

Before settling on a claims solution, insurers should determine whether it will integrate into their existing systems. Claims management technology alleviates this concern by seamlessly integrating with proprietary systems. For example, if an insurer has a first notice of loss (FNOL) system for its call center, an effective claims system will connect with it and automatically assign the claim to an adjuster once it has been captured. Technology also supports compatibility with the variety of file formats used in the industry and can easily communicate with the company’s internal systems to both promote claims-handling efficiency, and produce quantifiable results.

ROI

Ultimately, one of the most important criteria to consider is whether a new claims solution will generate measureable, sustainable improvements. Technology affords many ways to reduce costs and speed claims toward final settlement. For instance, communication systems facilitate coordination between insurers, adjusters, service providers, and policyholders to keep all stakeholders updated about progress. Tracking capabilities also monitor claims to make sure they don’t stall in the process.

High-powered analytics use audit algorithms to help insurers keep operating costs under control. To ensure accuracy, these audits inspect claims assignments for common errors, such as redundant repairs or missing estimate items. While some claims assignments are underestimated, many claims contain errors that, when corrected, refine the total claims value and verify that estimates appropriately match the type of work needed to repair damaged structures.

Leading claims management technology also provides users with graphical reports that track company performance for a number of metrics, such as response time for contacting policyholders, inspecting losses, and reporting findings, and then compare those figures against industry benchmarks. Users can then identify opportunities for future training to improve performance and exceed customer expectations.

While the current market has its challenges, it affords insurance professionals the opportunity to improve and innovate. One effective way to achieve that end is to adopt viable management solutions that enhance the claims journey. For those insurers looking to improve their claims management processes, the aforementioned criteria can serve as a valuable guideline to help them pick the solution that improves performance and ensures long-term financial stability to make certain they will be around for their policyholders for years to come.

Special Reports /

Four Criteria For Evaluating Your Next Claims Management System

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