Property/casualty insurance carriers first need to examine their core claims systems if they want to receive a bigger return on any claims technology investments, but Don Light, senior analyst for Celent Communications, cautions it cant stop there. In his report, Property/Casualty Claims Technology Strategies, Light explores trends in this area and says carriers need more than a solid core. They also should be looking at what he calls the inner and outer rings around the core that can make a technology project pay off handsomely.

The inner ring, he says, consists of three toolsbusiness process management (BPM), enterprise process management (EPM), and business rules engines. Some of the most powerful tools for impacting a lot of steps in the claims process and taking some real bites out of severity and loss adjustment expense (LAE) come from those three tools in the inner ring, says Light.

Whether these tools are available on core claims systems depends on the system the carrier currently has in place and whether the carrier wants to go to the trouble of replacing the core if it lacks those tools. Integration tools, such as Web services, have made it easier for carriers to purchase these EPM or BPM tools as stand-alone solutions or components to the core system, according to Light. Our suggestion would be to start with EPM, he says. Get rid of the paper first. Its a quick return financially and makes your policyholders and your agents happier.