Effectively managing claims has historically proved to be a complex task, to put it mildly. With so many steps and variations in each process, it is no wonder that insurers struggle to consistently improve claims operations. Because total cost of indemnity represents a significant portion of an insurer’s costs, reducing the expense of claims processing is imperative for any insurer. However, cost efficiencies cannot come at the expense of a policyholder’s service needs and right to receive a fair and equitable settlement for a valid loss. Given that the claims experience is a primary driver of policyholder satisfaction and loyalty, the need to deliver a high-quality experience is equally as important as cutting costs.
Insurers pursuing opportunities to transform and optimize claims functions frequently consider packaged applications. All too often this technology-driven approach ignores the business outcomes an insurer is trying to achieve and fails to consider the people, process, and integration components needed to enable holistic improvement. In addition, packaged applications rarely offer the agility needed to support claims operations and processes that undergo frequent change, forcing insurers to adapt their business to the way the systeem works. The result is isolated and broken processes beset with cumbersome manual handoffs and work-arounds that only increase costs and can lead to policyholder dissatisfaction.
There are six key competitive advantages that insurers can leverage with BPM to transform and optimize claims management: