A key problem in claims management lies in the billions of dollars in overpayment, inefficiency and waste–or what the industry generally refers to as “claims leakage.” Combine this challenge with the unprecedented number of recent catastrophic events, and insurers now have an even greater sense of urgency to speed up and improve claims-handling while optimizing adjuster communications and resources.

The silver lining is that insurers, once hampered by legacy systems that are resistant to integration and modification, are now increasing their information technology investments in claim systems–particularly in tech projects that incorporate the Internet in all phases of the claims life cycle.

As a result, claim departments are undergoing a dramatic transformation from inefficient, disjointed processes to a more streamlined workflow powered by integrated Web solutions. The following are some of the Internet tools that have begun to supercharge claims operations.

o Browser-Based Technology

A modern claims infrastructure must allow the process to extend beyond the four walls of the claims department, connecting players in other departments as well as those external to the organization.

Browser-based systems have allowed insurers to capitalize on remote operations that increase the scope of business, staffing and service opportunities. For instance, browser-based technology affords claims and risk professionals greater freedom and mobility, allowing them to log on from the road or from home.

As an added benefit, browser-based tech is intuitive and user-friendly–insurers can significantly reduce the time needed for adjusters to reach user proficiency. The system and business processes are easy to customize, enabling these functions to remain in the hands of business users (not the IT department), so claims departments can quickly adapt to the ever-changing needs of the insurance market.

o Web Services

The Internet is increasingly being used for application-to-application communication.

Web services (component-like applications that run on the Web) have the capability to describe their functions and services to one another online. They automatically link together without the traditional challenges involved in system integration. The modular and interoperable nature of these applications enables insurers to enhance the functionality of their existing claims systems.

For instance, insurers may integrate a new Web services module to more accurately assess reserves, or to more stringently control health care utilization. The possibilities are numerous, cost-effective and highly customizable to an insurer's unique claims objectives.

o Claim E-mail

These days e-mail has become a main mode of business communication. In the past, adjusters had to toggle between their claims system and an external e-mail program, such as Outlook, to send claim-related e-mail communication. Any important correspondence then had to be copied and pasted back into the claim file for proper documentation.

With the latest Internet technology, e-mail is seamlessly integrated. From the claim file, adjusters can send and receive e-mail to streamline communication, and it is automatically stored at the claims level to improve documentation.

This integrated claim e-mail works much like Outlook, and adjusters have the capability to easily attach items internal to the claims system, such as document images and insurance forms.

o Hyperlink To Claims

Today's online consumers are accustomed to the use of hyperlinks in e-commerce transactions. They book flights online and receive an e-mail with a hyperlink to review their reservation. The hyperlink allows the passenger to select and reserve a seat, and in some cases specify meal preferences. The information is updated in the airline's master database, saving the company time, money and resources–not to mention the fact that speed-to-service enhances customer satisfaction.

Hyperlink technology is also being used to streamline claims workflow. Within the claims industry, this hyperlink concept is called a “guest link”–basically a hyperlink sent via e-mail that allows an external user or “guest” to directly access a specific claim.

The hyperlink is secure, and access rights are defined by the sender (usually an adjuster) as either “view only” or to allow the guest to add information directly to the claim updated in real-time. The guest link provides claims departments with transactional costs savings and has cut back on bottlenecks in exchanging information, such as waiting for returned calls or faxing paper files with outside stakeholders.

o Online Reporting & Oversight

In the past, there was no effective way to collect and analyze claims experience from an enterprise level–each department had a silo-strategy to claims management and loss control. Today, Internet technology tools provide the capability to collect and integrate claims information enterprisewide in real-time, so the information can be measured, analyzed and reported in a variety of ways.

Claims departments customize reports for various stakeholders, and the Internet provides the vehicle with which to schedule and automatically distribute these reports to stakeholders who need to stay abreast of a client's claims experience.

Previously, claims departments had to review paper files to audit their claims process to ensure best practices were consistently performed. Because the process was time-consuming, audits usually involved a retrospective sampling of 10-to-20 percent of claims.

Today, with Internet technology, the auditing process has become more electronic and transparent–insurers can perform online, concurrent reviews of 100 percent of claims, ensuring a higher level of performance.

o Internet-Driven Business Rules & Claims Segmentations

Claims departments have a huge interest in improving claims-handling consistency.

In the past, adjuster decisions on complex claims varied widely, resulting in as much as a 10 percent rate of claims leakage. To remedy this, many insurers have divided operations into various claim segmentations. Each segment aligns claims of a particular complexity with adjusters who have a certain level of experience and expertise–tapping external specialists when necessary.

As a result, a complex segmentation strategy requires a business rules engine that can automate and coordinate tasks via the Internet. Processing steps are defined up front for each claims segment, so when data is collected via online claims reporting, Web-driven business rules are triggered to route the claim to the most appropriate individual and accelerate collaboration among stakeholders both internal and external to the organization.

o Online Customer Service

The claims process represents a major “touch point” between consumer and insurer, and the quality of service provided in this transaction can essentially make or break a long-term relationship.

Today, insurance companies have begun to tout their claims service as a competitive differentiator. As a result, investment in Internet claims technology, which can improve claims-handling and timely communication, is viewed as a huge opportunity to improve customer service.

For instance, many insurer Web sites now allow clients to report and track the status of a claim online and to communicate with adjusters via e-mail. These online capabilities reduce call center costs and help to meet customer demands for convenient and immediate service.

Smart insurers know there's no room for complacency in claims. Just because a company performed well in the past does not ensure future success. The industry must continually be directed toward bettering the claims operation.

Today, Internet innovation is the main means to process transformation. The Internet tools discussed here are making it easier to accommodate the increasing complexity of claim transactions, which involve multiple parties, multiple systems and various regulatory concerns.

The more complex and cumbersome the transaction, the greater the opportunity for the Internet to provide efficiency, cost savings, and the ability to build better and deeper relationships with clients.

Special Reports /

Internet Tools Help Insurers Turbocharge Their Claims Workflow

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