Filed Under:Carrier Innovations, Technology Solutions

Shattered Lives

Technology has transformed the claims process for property/casualty insurers, according to leaders of five insurance companies who agreed to take part in a special Q&A article for this joint special section from Claims and Tech Decisions magazines.

The leaders include: Steve Hatch, chief claims officer, Zurich North America; Gary Givler, vice president and manager, claims operations at The Cincinnati Insurance Companies; John Foster, vice president, claims, for Farmers Alliance Companies; Mark Hoffman, claims technology manager, Esurance; and Ken Tolson, vice president, U.S. Property & Casualty Eastern Region, Crawford & Company.

Among the questions they were asked, several involved how technology has im-proved many areas of their claims operation; how mobile technology is changing the way claims are reported and handled; and the challenging role adjusters face in the future.

How is technology streamlining the claims process at your company and, in your opinion, in the industry as a whole?

HATCH: At Zurich, we believe that streamlining the claims process is a key to achieving efficiency gains, as well as increasing quality and service levels. In late 2009, we started a claims transformation program aimed at providing a much more effective and efficient claims experience for our customers. Redesigning our first notice of loss (FNOL) business was a key starting point for us in that it introduced automated workflow management (WFM), which now guides work through a standard intake process. WFM gives us the ability to track work items throughout the claims lifecycle and minimizes data entry by integrating with other systems. This was a foundational step for us in our transformational journey of being a best in class insurer, and we continue to expand the use of workflow management.

The development of our claim handling systems and applications is ongoing, with the understanding that we must, at a minimum, keep pace with the market’s technology. To that end, we are using predictive models to get claims in the right hands as early as possible. By tapping into our huge claim data repository, we can identify claims that likely will have a high severity index, require nurse case managers, or have an increased likelihood of fraud.

Foster: We are moving from a legacy claims processing system to Web-based claims processing. For us, one of big steps forward is the integration with our various policy administration systems. This provides us instant coverage verification, where in the past we would locate individual policies, copy policy documents, and provide them to an adjuster so they could proceed with the loss adjustment.

Tolson: The most significant impact that technology has is that it shortens the lifespan of a claim—everything from contact to inspection to settlement time frames. It makes information more readily available to those who need it, including field adjusters, managers, and clients. It also makes the claims process very transparent. The client can thus track progress on a claim; he or she can walk along the process with the adjuster. With better, more available data, we can escalate issues much more quickly and make sure we are meeting our clients’ performance requirements. This is not unique to us; it’s happening everywhere in the industry.

Givler: At most insurance carriers, Web-based, integrated claims administration systems have shortened claim lifecycles by taking communications, documentation, information requests, reporting and system maintenance tasks away from claims handlers. This has freed up industry claims handlers to be more accurate and productive. At the same time, Web-based estimating applications have added consistency and driven out leakage for many auto and property lines writers.

Insurers are making further gains with software applications that allow close vendor integrations, manage legal expenses, and make use of repricing networks.

Both carriers and policyholders alike have benefited from software that:

• detects fraud patterns

• provides faster, more consistent answers to information requests

• enables direct access to claims status

• creates claim payments automatically.

Real-time systems capable of accessing corporate data stores make automated reporting of product performance readily available to actuaries and underwriters. New mobile applications hold the promise of increased customer satisfaction, as well as reduced costs and premiums.

Hoffman: Claims technology continues to play a critical role in the success of the claims department at Esurance. Our focus remains on providing our employees with the tools they require in order to provide exceptional customer service while maintaining fair settlements in an efficient and compliant manner. With insurers having “to do more with less,” technology innovations are a key driver in keeping expenses down while maintaining a consistent process of claims handling.

Are certain technologies becoming more crucial than others? Can you quantify the gains?

Hoffman: Our recent technology focus has centered on automated workflow and self-service. We strive to allow our claims associates to use their experience to make the best decision based on the unique nature of each claim. We are diligent in looking for ways to reduce the administrative steps required for claims handling to improve the experience for the customer and the efficiency of our claims staff.

Regarding self-service, we have developed functionality to provide Esurance customers with automated notifications as the claim develops, current information regarding the status of their claim, and links to information to assist them with understanding the claims process. In the very near future, we expect to deploy similar functionality to all parties in a claim, not just Esurance policyholders.

Foster: Adoption of document management and a central Web-based claims management solution have been critical in improving our claims handling process, resulting in a reduction of the amount of time spent on non-value added activities by half in some areas.

Tolson: Our clients are always looking for faster and more efficient ways to adjust claims, and mobile and tablet technologies are becoming crucial to meeting those needs. We are piloting those technologies in our field operations to determine how to integrate them into our current processes. However, it is too early for us to quantify gains at this time.

Is technology changing the way adjusters do their jobs? Are they focusing their attention/time on different tasks as a result?

Foster: Yes. Adjusters are being asked to enter more data elements than they have in the past. In today’s world, it is expected. However, we need to be cautious and keep this at a minimum: only asking them to enter data that truly helps in the adjustment of the loss or adds value to the organization as a whole. Adjusters need to focus on adjusting losses as much as possible.

HATCH: WFM, as well as predictive modeling, will not only help improve customer satisfaction, but also the employee experience, by ensuring the right people are working on the right tasks at the right time—all to get the best outcome for our customers. By equipping our employees with these tools, they will be enabled to focus more on decision-making and customer service rather than administrative tasks. We think this will make their jobs more fulfilling and better engage them with our strategy of customer centricity.

In addition to shifting the focus on more value-driving behaviors, predictive modeling will help make us smarter about each claim. With the implementation of a recent predictive model, claims professionals now gain insight into more than the complexity or severity of a claim, and also the key elements that determine the claim score.

This information is critical to the claims professional quickly and accurately managing the claim from the time of assignment. We believe having this insight early in the claim lifecycle will allow us to achieve better outcomes, strengthen our customer relationships, and allow us to exceed their expectations.

Hoffman: With the deployment of automated workflow projects, our claims personnel can spend more time speaking to our customers about their claims. The focus of our claims employees has shifted from handling administrative tasks to ensuring a more effective customer experience and real-time decision making.

As the marketplace continues to expand the deployment of self-service functionality, customers have shifted to “expecting” functionality on mobile devices, automated status notifications, and tools to allow for 24/7 communication. As technology becomes more pervasive, all generations of consumers are demanding access to real-time information from the companies they do business with, and insurance companies are no exception.

Tolson: When it comes to technology, the adjusting role started to change when we shifted from doing work on paper to using [electronic] claims systems. Mobile applications will continue that trend, and adjusters definitely spend more time entering data than before. However, their essential role as an interface between an incident and the ultimate resolution remains the same. Technology is not a replacement for understanding the process; it is an enabler.

Givler: At Cincinnati Insurance, we believe that service sells insurance and have consequently focused on removing clerical and repetitive tasks from field adjusters while at the same time enhancing their ability to provide cost-effective, onsite services. Technologically empowered adjusters better meet the expectations of our policyholders and move things along faster. They provide the best value when making decisions and working with people. Efficient operations involve focusing adjusters on these higher order tasks and eliminating all distractions and impediments to claims resolutions.

Is the role of the adjuster changing with your company? Are there issues the industry needs to face concerning the quality and experience of adjusters?

Givler: The traditional all-lines adjuster role, once common in the industry, has given way to specialization by line of business or segment of the adjustment process. These new positions require unprecedented customer management skills and relevant educational backgrounds. At Cincinnati Insurance, our objective is to hire and train associates who can manage any situation they encounter and settle claims on the spot.

Tolson: The industry as a whole is dealing with the serious issue of senior adjuster retirements, the difficulty of passing along expertise, and recruiting new adjusters into the profession. Mentoring plays a larger role today than ever before in that process, and so does technology. For example, our KMC On Demand product offers capabilities that allow companies to collect searchable information into a database, so new adjusters can tap into the knowledge of experienced adjusters. Technology also enables us to handle the lowest-severity claims in a much more efficient manner. Adjusters of the future will need to be much better qualified and educated to handle larger, more complex claims, and we’re focused on providing more educational opportunities for them.

Foster: Yes, the adjuster role is changing. Their role is highly technical. The need for people with strong analytical skills will increase in the future. As an industry, we need to work to bring new people into insurance and claims. We do our best to hire adjusters who are recent college graduates or graduates with some financial industry experience. If we find the right person, then we can teach them how to be a solid adjuster.

Hoffman: The role of the adjuster has become more challenging because of changes in legislative and regulatory requirements. Technology has played a major role for our claims associates as it supports them in meeting regulatory requirements while exceeding the service expectations of the customer. For example, communication was conducted historically via hardcopy letters and phone calls. Today, our claims associates and customers have multiple electronic methods of communicating back and forth. Beyond meeting the minimum expectations of our customers, we also seek to provide a customized experience that allows the customer to choose the best way to communicate with Esurance. We continue to look into new technologies to allow additional communication avenues for our customers and our associates.

Has there been a fundamental shift in regard to the value insurers attach to mobile technologies or the way in which these tools are used?

Hoffman: Mobile technology has become a major focus for Esurance as we seek to duplicate and improve upon a desktop user experience. We are seeing exponential growth in consumers accessing dedicated apps and the mobile Web to obtain premium quotes, view policy ID cards, and claims information. Although it remains challenging to keep up with updates to mobile operating systems, Esurance is focused on providing the tools necessary for customers to access “technology when you want it.”

Internally, we are exploring the use of more advanced mobile technology for our associates in the field. This includes the use of tablets and creating internal-only apps to drive efficiencies for our field staff.

Foster: There is clearly value to the use of mobile technologies. Communication is so much faster between all of the parties involved in a claim. Recently, one of our adjusters was trying to reach a claimant involved in an accident. The adjuster called the claimant’s cell phone numerous times, leaving numerous messages with no response. After a few days, the adjuster was able to reach the claimant. The adjuster advised the claimant that multiple messages had been left on her cell phone without a response. The claimant responded that she never checks her voice mail on her cell phone and in the future, if we want a return call, we should send a text message first, asking her to call. This was an “ah-ha” moment for me. I think this will become the norm. We need to communicate with people the way they expect it and not the traditional means. Cell phones are “phones” in name only. They do so much more and seem to be used less for actual phone conversations. Photos and video taken by people involved in auto accidents are very helpful. They add a whole new dimension and help the adjuster visually understand what occurred as opposed to looking at photos taken sometime later or reading a written accident report.

Givler: Mobile technology devices are a combination of hardware, operating systems, networking and software, and have been employed by various insurers to do everything from information access to booking new business. Five years ago, we furnished our field claims representatives with card-enabled tablets that allowed us to expedite loss-related communications, revise assignment processes, manage catastrophe claims more effectively and collaborate more efficiently with our 4,200 company associates who serve and 1,500 agency locations in 39 states.

Tolson: Judging by our experience with insurers, they clearly understand that mobile technologies both for field staff as well as the end consumer are critical. They are interested in keeping their clients informed and making them a contributor, as opposed to a bystander, in the adjusting process, and that is a big shift in the business.

Does mobile technology affect case assignment, including FNOL, location, and routing? Is it a conduit between various departments within the company or other liaisons?

Tolson: Mobile technologies affect case assignment in a number of ways. They allow you to pinpoint the location of your people resources and assign cases accordingly. They also give you the ability to accept cases both from the consumer and the insurer. And they give you information about the consumer you’re dealing with. A person who wants deal with a claim through email or their mobile application is different from someone who wants to hear from you on the telephone. This population is very adept with technology and accepting of the self-service environment and is rapidly growing. I believe we’re seeing just the beginning of the self-service market in the claims business.

Foster: We are looking at ways to extend FNOL to mobile devices. With Web-based systems, loss assignment is more efficient, especially as Internet service becomes more reliable in remote areas. As a farm insurance company, Internet service can be spotty in rural areas, but things are improving every day. We find we are able to route losses to the appropriate adjusters efficiently. We also want to explore connectivity with body shops, rental car facilities, and other customer contact points to make the process easier.

Hoffman: Because Esurance has a variety of policyholders as well as access to future customers, we want to provide tools to allow the individual to choose the best experience for themselves. Some consumers may be comfortable with obtaining a quote on a mobile device, however others may prefer to talk to one of our 24/7 sales associates.

What kind of feedback do you receive concerning customer satisfaction with the claims process?

Foster: We are proud of our adjusters and the level of service they provide. This is supported by the positive responses we received from our customers. Is everyone always satisfied? No, but we hope to learn from those who are not, and see if there are ways we can improve the process so another customer doesn’t encounter similar disappointment or frustration in the future.

Tolson: By and large, our customers are most interested in reducing time in process while at the same time producing high-quality outcomes.

Givler: According to several recent industry articles, excellent claims service is a key factor agents use to determine which carriers they want to represent. We agree with this research given our experience working with independent agents.

HATCH: We are told time and time again by our customers that claims service matters, and we understand that many accounts are won or lost on this single issue. We have earned our high customer-satisfaction ratings by adhering to claim handling practices that put customer service and communication first, working with them to identify loss cost trends, collaborating with risk managers and human resources representatives on training or employment issues, and identifying opportunities for risk reduction.

Zurich performs very detailed customer satisfaction surveys and we also rely on our claims staff to get direct feedback from customers, brokers and agents. We believe it is important to measure satisfaction from every angle to continuously improve the ease of doing business with Zurich.

Do you monitor social media in terms of customer satisfaction? What steps can you take—if any—to deal with unfavorable publicity about a claim?

Hoffman: We view social media as another way for us to connect with our customers, and we have teams in place that monitor social media every day and engage with our customers. We use a number of different tools—including Radian 6, HootSuite and CoTweet—to monitor what customers are saying about us. If we see a customer posts a negative comment or complaint about a claim, we respond immediately via that medium, whether it is Facebook or Twitter. We then work to get the conversation offline to try and help the customer in a private manner with one of our dedicated claims reps. We also use social media to thank the customers that talk about the positive experiences they have with Esurance.

How satisfied are you with your claims administration system? What areas work best?

Givler: The Web-based claims administration system that we implemented 7 years ago has more than met our goals for expediting claims financials, supporting disaster recovery, providing operational cost control, managing loss information and streamlining our processes and reporting. It has proven to be easy to modify and upgrade as requirements change over time.

Tolson: Our claims system meets current needs, but I believe an organization that says they are satisfied with their system is in danger of becoming obsolete. Good claims administration systems are forever-evolving, and we devote a tremendous amount of resources to continual enhancements based on feedback from all users. There are always going to be new developments to adopt, such as mobile applications. If your claims system is static and you don’t have a process in place to keep it updated, then you are in trouble.

What inroads are you making in the area of self service for claimants?

Hoffman: From a self-service perspective, Esurance is making solid progress in allowing policyholders to access more information about their claim 24/7. From online claims reporting to automated notifications, we are working on functionality to provide non-policyholders similar access to important claims data. Today, RepairView is available to Esurance policyholders and others involved in a claim. We continue to see the enhanced customer service benefits of allowing customers to monitor their vehicle repair via the desktop or mobile device.

HATCH: Our self-service offerings are focused on reporting and ongoing claim management primarily with our insureds. Today, customers can report claims via the telephone, fax, Web or submit electronically. We also have a tool called Zurich RiskIntelligence. This is a powerful Web-based system that provides daily updates of claims and loss information in standard or customized reports. By providing timely information in its most useable format, Zurich RiskIntelligence enables our customers to review loss costs, analyze loss trends, and pinpoint problem claims or loss areas early on so that corrective action can be implemented.

Our global colleagues also have implemented self-service tools, such as iPhone and BlackBerry applications, to assist our policyholders and we continue to look at innovative solutions for our customers here in North America.

Tolson: We are building our mobile infrastructure to support self-service applications, but as I said before, we are in the pilot phase of developing those capabilities.

How often do you reexamine your business processes to determine their quality? Any examples of changes you have made recently?

Foster: As we move forward with our claims system implementation, we continually evaluate all of our processes to determine if they add value. For example, we discovered our final payment process included manual steps that could be automated for time savings. As a result, we are in the process of improving our automated payment approval process to reduce the steps managers and supervisors need to take to approve a final payment requiring authorization.

Givler: We do not wait for the official quality reviews that we conduct every 6 months to act upon changes that offer a better or more efficient way to do things. Recently, we automated payments to several large-volume service vendors and workers’ compensation filings to the State of Missouri, allowing us to reassign four full-time associates to more value-added tasks.

Tolson: We meet with our business units and client advisory council regularly to discuss our quality programs, talk about what and how we measure and make sure we are looking at the areas that are most important to our clients. Sometimes the meetings result in minor tweaks to our processes, and at other times we might need to make a major change to processes if our clients’ needs have changed.

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