Using Tools To Build A Claims Utopia Imagine a claims world where adjusters focus on customer service and decision-making while automated solutions handle mundane activities such as internal reporting or coverage verification.

This claim management Utopia would allow the adjuster to use his or her knowledge and skills to effectively manage claims and quickly settle simple losses with little to no paperwork. Automated tools would manage the time-consuming and labor-intensive activities of research, paper movement and follow-up.

It may sound like Utopia to most claims adjusters, but these automated tools are available today from a variety of vendors. Tools to manage an electronic claim file, workflow, litigation expenses, bodily injury general damages, fraud and other factors can be quickly implemented into your claims department and immediately begin shaving points from your loss ratio.

So, how can insurance companies achieve this type of a return on investment? Before any successful software implementation, carriers must first overcome two common phobias: the Not Built Here Phobia and, of course, the Trust of Tools Phobia.

Insurance IT departments have focused for years on policy, billing and claim management operations with a very inward view: Functions are built to directly solve a business requirement. Generally speaking, these IT departments are wary of software not built by them. In contrast, software vendors develop claim tools with a broader perspective and leverage the ideas from a shared set of clients. As tools that can be individually configured, they allow each client to design a system to automate his or her existing business practices, thereby keeping the unique company identity.

Sometimes claims adjusters are afraid to trust tools. But when you look at automated claim tools, they are just thattools. They do not perform any mission-critical claim adjuster functions, such as settling the claim, talking to the claimant or inspecting damaged property. Rather, these tools automate many of the non-mission critical adjuster tasks.

More often, they are monitoring information in the background and offering suggestions to help the adjuster make knowledgeable decisions quickly and decisively. Adjusters gather information to make a decision. Claims tools gather the data from an electronic claim management system and either present it to the adjuster or flag it for someone else to review, saving the adjuster time that would have been spent gathering data.

The first point of automated efficiency for an adjuster is an electronic claim file. Having the claim captured electronically gives the adjuster immediate access to any data on any claim. This enables better decision-making and better customer service.

Traditional claims workflows require a large file room and paper folders. Some companies have applied electronic imaging tools to a paper claim folder in order to improve information access. Imaging solutions help to move towards the benefits gained from an electronic claim management system, but they are limited to capturing letters and photos that have been attached to the claim folder and lack the adjusters notes and any other information that was not imaged.

Imaging tools make part of the manual workflow paperless, but they do not make the workflow more efficient. What adjusters really need is easy and quick access to any and all information in a flexible, electronic environment. Adjusters must respond to questions and make decisions rapidly, so they need all pertinent information immediately. If they can get their hands on more information, it allows them to make better, more accurate decisions.

Customer service improves because a full electronic claim file can be viewed online, and adjusters should be able to locate a claim through multiple search techniques such as the claim number, policy number or any name on the file. Once a claim is managed online, it can enable advanced interfaces and interact seamlessly with surrounding advanced automation tools.

To really automate the claims operation, you need a rules-based workflow engine to run behind the scenes to support the claims management system. Workflow engines can be used to automate many of the tasks of the adjuster based on the same business rules you have in place today. For example, when a car is damaged, an appraiser can be assigned and notified automatically by e-mail by simply building rules into the workflow engine.

Because all claim data is captured electronically, information such as the owners name and address, vehicle data, damage description, etc. can all be passed through the workflow engine to an appraiser via e-mail. Appraiser comments, estimated damage and applicable media such as photos or audio recordings can be electronically submitted back to the adjuster once the appraisal is completed.

The appraisers work can be attached to the claim in an imaging solution for future review by the adjuster, and the adjuster can be notified to settle the claim. Workflow engines also can be used to remind the adjuster every few days that the appraisal has been assigned but not completed.

Workflow engine rules can be built in to drive the adjuster to move salvage more quickly and reduce the ongoing storage fees that accumulate when a vehicle sits in a salvage yard. Engines support a trigger to start the clock when an appraisal comes back, facilitating the sale of the vehicle to a salvage buyer and ordering the title and other documents.

Fraud is another area where automation can have a significant impact. Through seamless integration to the electronic claim management solution, companies can automatically monitor data as it is entered for a single claim and for multiple claims. Fraud detection software lets both inexperienced and experienced adjusters focus on their jobs because the fraud department will be notified of suspicious claims through rules created by your company. Each company has different fraud criteria, so the fraud detection software can be customized to alert the special investigative unit (SIU) using a workflow tool, work management tool or an e-mail message.

Fraud tools can automate the review on a claim-by-claim basis or scrutinize your entire database for fraud rings. Fraud tool rules can differ by claim type, geographic region and line of business, so memorizing all of the rules can be daunting to an adjuster. Long-term fraud is better caught after several claims are settled. Tools can be used to perform fuzzy logic searches on similar data such as social security numbers or similar names. Using a tool that can tie together several claims and provide a visual representation of the data to a fraud specialist can break fraud rings.

Litigation expenses also are on the rise and can easily be controlled through technology and automation. Many tools on the market will help adjusters review and reduce expenses. Some tools even handle the editing at the attorneys office so that any discrepancies are corrected and resubmitted without any involvement by the adjuster. It takes time for someone to review all of the bills, and it costs money to keep paper records on file. With a tool that automatically reviews and edits legal bills and stores the records electronically, insurance companies can save thousands of dollars in inappropriate legal charges and internal handling expenses.

Expert injury evaluation systems can take the knowledge and decision-making of your best adjusters, combine that with your company rules, and give all adjusters a recommendation with the goal of reducing inflated claim payments and being more consistent in your injury payments.

Using advanced claims automation tools helps to level the playing field and enable new adjusters to make better decisions faster and perform more like seasoned adjusters. Now, thats Utopia.

Frank Heaps, III is lead product consultant of Computer Sciences Corporation, based in Blythewood, S.C.

Reproduced from National Underwriter Edition, March 31, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.

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Using Tools To Build A Claims Utopia

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