It’s nice to hear property & casualty insurers are getting serious about putting more money in their claims operations. In a recent survey of p&c carriers, Accenture reported that insurers have discovered too many problems with their current systems that keep them from operating effectively in the most important customer-service area of their operation.
When filing a claim, every policyholder want exactly the same thing—to get what the insurer has promised through their insurance contract and as quickly as possible. The last part has been the holdup for many carriers that use older and/or inefficient systems. Systems don’t have to be old to be inefficient as many carriers, sadly, have discovered.
In an interview with Michael Costonis, a managing director in Accenture Property and Casualty Insurance Services, he reported the average p&c company (if there is such a thing) is “operating with basic and inflexible technology.”
Claims has been the neglected department for too long in insurance despite the strategic value it maintains in retaining customers and attracting others who have been burned by carriers that offer lower rates, but poorer service when it came time for the insured to collect.
Ineffective systems lack the necessary tools that a modern-day claims department need for that carrier to actually believe handling claims is a core competency. Chiefly lacking is the ability to perform some type of data analytics, which we are learning daily is the tool of not just the future but of here and now in the insurance industry.
“Eighty percent of insurance companies are relying on [Excel spreadsheets] as their predominant source for analytics,” says Costonis. “That clearly shows companies are not taking advantage of what is out there.”
These numbers and this discussion shouldn’t surprise anyone—particularly those in charge of claims departments. As Costonis points out, when the economy went south and personnel decisions had to be made, claims was one of the chief victims.
It’s unlikely that any claims department is back to pre-2008 levels. That’s not the way business operates today. But for claims adjusters and others to “do more with less,” the doctrine of the 21st century, companies at least have to provide those who are left behind with the tools needed to maintain effectiveness, which, when you come to think of it, is a pretty low bar for anyone to aim for.