In personal lines insurance, there is a heavy reliance on what anew policy system can do for a carrier, but in claims, the approachis different, particularly when it comes to an investment in newclaims systems.

"A lot of rules—that's what run claims systems," says KarenFurtado, a partner with the research and consulting group StrategyMeets Action. "There are a lot of reminders, which is why workflowis so important."

Furtado and SMA, through the cooperation of Tech Decisions,surveyed over 300 insurance industry professionals on a variety ofclaims-related topics and produced a report called: ClaimsTransformation: Positioning for the Future.

Some carriers with older claims systems are still to get theirworkdone without the benefit of an imaging system, according toFurtado, a fact that amazes Furtado.

"[SMA] presented at [America's Claims Event] a couple of yearsago and there were a number of adjusters in the room. When we askedthem if workflow and imaging can help them—which in essence means acomplete change of business practice—they hated it," she says."They wanted the paper folder."

Where Furtado sees the shift beginning to take place forcarriers is when they discussion touches on areas such as retentionand growth. Furtado maintains those two areas are focal points fordelivering customer service and claims, more than ever, is viewedas a customer service area.

"With customer service comes a lot of automation," she says."You need to have some type of portal to provide agents andinsureds claims info. Those areas have not been transparent in thepast, which is why automation is beginning to take root andpositioning for the future is going beyond the claims transactionitself to combine the agent and third-party networks into theprocess."

For claims departments, Furtado believes mobile systems willhave to spark new investments in technology.

"Mobilehas such a high adoption rate," she says. "There remainssome skepticism among adjusters over whether an iPad is sturdyenough to be in the field, but [the adjustors] understand mobiledevices can make their job so much easier and efficient. There isless work on everyone's part if they can use a mobile device in thefield."

Furtado believes the adoption rate amonginsurers around mobility for claims is coming at a "lightning pace"when compared to other technologies.

"There are some insurers struggling with it—their sitesdon'twork as well when rendered on mobile devices—and they are puttingmoney into the front-end part of the process," she says. "If acarrier is going to have a first-notice-of-loss app you better makeit easy for someone to use."

The SMA survey showed claims leadersdon't believe they havetheir companies supply them with the technology resources they needand Furtado believes the reason for this is simple: "Claims isn'ttied to revenue," she says.

For many carriers, IT spending focuses on rates, rules, andforms, according to Furtado.

"IT peopledon't spend the majority of their time focused onclaims and that's why some claims people feel theydon't get theattention," she says.

Furtado believes that could be changing, though.

"Looking at the market, I read about a lot of claims projects,"she says. "Being able to provide more information when and where itis needed is, to me, the key to claims. Updating systems and higheradoption of workflow and imaging is making the process easier."

While insurers, particularly mid-tier and smaller, are playingcatch-up when it comes to upgrading claims systems, Furtadobelieves the importance of analytics to claims will spark morespending.

"Tier one is in the lead pack because they have been keyadopters of things such as predictive analytics, which is tied withthe maturity of the organization," she says.

Early adopters of analytics were focused on areas such as marketsegmentation and rates, according to Furtado, but that ischanging.

"Over the last couple of years more insurers are usingpredictive analytics to assist both in claims assignment and inunderstanding the risk at a more intuitive level," she says."Claims with certain attributes can escalate quickly, so carriersmanage those with different caseworkers. It's getting the rightpiece of work to the right person."

In figure 1, SMA looks at the key business drivers that claimsexecutives see with the top three being workflow, improving thecustomer experience, and getting access to detailed data to makeinformed decisions.

In figure 2, SMA looks at the barriers for claims processimprovement and finds  the number one barrier for claimsleaders is an IT platform that is not compatible or easy tomodify.

In figure 13, SMA found nearly one in four carriers currentlyhave claims systems that do not offer imaging or documentmanagement and nearly 40 percent have systems that don't offerworkflow.

In figure 14, SMA reports that claims leaders have to relyheavily on IT resources for all changes in their systems.

In figure 7, SMA shows that investment plans for claims inpersonal and commercial lines in 2011 were either flat or decreasedin more than half of the carriers surveyed while plans forincreases in IT investment over the next two years is expected torise by double digits.