When I started in the business, audits and reinspections werethe only way of gauging the effectiveness of staff or direct repairappraisals. My boss at the time likened it to trying to drive a cardown the road by looking in the rear view mirror. A lot has changedin the gathering and use of electronic data. We can manage andalter appraisals before they have been paid through electronicaudit or before an appraisal is committed, but we still need tomanage the performance on an aggregated scale through meaningfulkey performance indicators (KPIs) or metrics. While this smacks ofdriving through the rear view mirror; we can also benchmarkperformance of an entire team and establish the value in realdollars of improving performance.
|The question is what KPIs give us the best holistic picture ofperformance? To answer this we need to look at the reasons why wemeasure various metrics and ensure the most accurate appraisal thatrestores or replaces the vehicle. This, along with accurateunderwriting, ensures that the company will continue to remainprofitable. Part of that profitability is to create a positivecustomer experience so the insured will renew and the third-partyclaimant is satisfied with the process.
|To achieve this, let’s look at five important areas in claimsperformance management:
- Productivity/efficiency — How many appraisals and supplementswere done?
- Severity — Is severity in line with losses for similar vehiclesin a similar jurisdiction?
- Accuracy — How many supplements were written and were thecorrect procedures followed the first time?
- Cycle time — Did the appraiser or shop efficiently move thevehicle through the process?
- Customer experience — Claims is the moment of truth for apolicyholder, was the customer satisfied with our process and therepair?
By developing a scorecard using this balanced approach, we canevaluate the impact on financials and customer retention for autoclaims based on the effectiveness of handling the physical damage.So, how does your scorecard stack up? Are you too focused in onearea at the expense of another?
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