Maintaining compliance with state and federal legislation can bechallenging, given the volume of potential violations. But despitethis challenge, managing claimant communications to avoid fines orother sanctions is important. This written documentation providesan extensive paper trail necessary to comply with regulations.While compliance processes most often fall to the operationallevel, the job of ensuring core data quality should not only be thefocus of claim departments, but also in customer service and agentportals.

In a recent Wolters Kluwer Financial Services' industry researchstudy, five of the top 10 most common market conduct compliancecriticisms for property and casualty insurance are in the claimdepartment. Of these, three relate to contacting or notifyingcustomers:

1. Failure to acknowledge, pay, or deny claims within specifiedtime frames;

2. Failure to provide required and appropriate disclosures, suchas selection/rejection or coverage notices in the underwritingprocess, or notices like statute of limitations, reasons ordenials, and bill of rights in the claim process; and

3. Failure to communicate a delay in the settlement of a claimin writing.

All three of these compliance issues require insurers tocommunicate with claimants, often in writing. Without accurateaddress, phone number, and e-mail information, these communicationsare almost impossible to complete, leaving the insurer vulnerableto compliance violations.

Bad contact data in this situation impedes communication and isoften recognized through high volumes of returned mail within theclaim department. Each piece of returned mail is more than justpaper in an envelope -- it signifies a lost communication and apotential compliance violation.

It's All About Addresses

The claim process is full of addresses. Think about the numberof parties involved in a claim: claimant, witnesses, attorney,doctors, law enforcement, and other insurance companies. Each partyhas unique contact information that must be accurate to ensuretimely delivery of sensitive claim documentation.

Up to 35-40 different forms can be mailed in the course of aclaim, creating an extensive paper trail. Each piece that is sentto an inaccurate address will be delayed or returned, resulting inadditional staff work and claim delays. While many consider addressaccuracy only a small component or problem, insurers still operatewith regulated compliance timeframes. With industry timelines inmind, no company can afford documentation delays or othercommunication returns. Address accuracy is, therefore, critical toinsurance processing.

The process has an inherent problem, though. The people whocapture the data are not those who use it. While it is not theclaim department's responsibility to establish a customer recordfor the first time, the department is expected to communicate withcustomers through the use of that data. Claim departments have avested interest in making sure customer information isaccurate.

Insurance companies need to go back to basics and clean up theway they are capturing data in order to mitigate the probability offuture compliance violations. Claimant data capture will alwaysrelate back to the ability to communicate and interact with aclaimant. By using a proactive data verification approachthroughout customer-facing business units, insurers will avoidcompliance headaches and benefit from increased operationalefficiency and cost-savings.

Start at the Source

Accurate data capture starts at the source of the customerrelationship. By engaging the customer -- either through a webportal submission or personal interaction -- insurers canproactively verify contact details and prompt the customer foradditional information where necessary.

If addresses are not verified during the initial engagement, theclaim processer is left to interpret the data independently.Incomplete address elements -- like apartment numbers, streetdirectionals, and street types -- or inaccurate information -- liketypographic errors or transposed ZIP codes -- will likely remainwithin the system and disrupt claim processes and claimantcommunications.

Agent Interactions: Consider the agent orbroker associated with the account. Insurers should provide theseindividuals with the tools to ensure accurate information, and thenhold them accountable for it. The trick is to implement aninteractive solution that flags incorrect data while suggestingpotential corrections. By deploying such a system and enforcing itsusage, insurers can be confident that the data collected by agentsis accurate.

Customer Self-Service: If the agent is notinvolved in customer data collection, address verification canstill ensure accuracy at the source of entry. Consider the newconveniences of the Web and technology like iPhone apps. Whilethese self-service applications appeal to customers, insurersrecognize them more as a hindrance when it comes to dataquality.

Claimant data entered on the web or a mobile device issurprisingly inaccurate and can be the worst quality data enteredinto a database. Insurers often have mailings printed outautomatically from a system; unchecked addresses can easily getinto the claim process and delay mail without anyone realizing it.An interactive address tool can easily be put on the front of a webportal to check the address against a third party, standardize it,and then prompt the user for specific missing information while thecustomer is still engaged and interacting with the application.

Whether your system runs on agent-entered information, customerportal entries, or both, front-end address verification will ensureaccurate data capture at the source of the customerrelationship.

Customer Service Updates

While the initial data is collected during the customeron-boarding process, the claim and customer service departmentsmust still participate in data updates. These can be sent inthrough the agent or come directly from the policyholder. However,the bottom line is that individuals are constantly changing theircontact information, making it difficult for insurance companies tokeep up.

The claim processor is responsible for capturing new data oncethe claim process has been initiated. By focusing on improving thecontact data that is captured within the claim department, insurerscan alleviate the compliance and operational risks that are causedby bad data captured in other parts of the organization.

The same goes for the customer service agent. Often, customersare in a hurry and want to get off the phone as quickly aspossible. By having a verification solution, agents can cut down onthe amount of keystrokes it takes to enter an address. With aninteractive solution they are able to see the streets in aparticular ZIP code and narrow down the information with eachkeystroke, preventing them from having to ask the customer to spellout a full street name or be inhibited by a language barrier.

Boosting Accuracy with USPS Data

Selecting a data quality tool is easy, but enabling it to do thejob is more difficult. The ideal address tool will work seamlesslywith your customer database and will ensure accurate and timelycontact data capture.

There is only one way to get an address right: confirm itagainst the local postal authority's database. Repeating an addressback to the customer may catch some mistakes; however, it isunlikely to cover all bad-data capture scenarios. Some don't knowtheir own address.

As the population grows, new buildings and houses are created,resulting in the need for more addresses. More addresses lead tonew ZIP codes and zoning changes within the USPS. While thoseliving at a re-zoned address are notified of the change, manychoose to ignore their new ZIP codes in favor of the old becausethey still get their mail. If an address has an incorrect ZIP codeor is missing the +4, it is not just a cosmetic or formattingissue. It will take longer for mail to be delivered.

A robust address verification tool that leverages postal datacan help. The ideal verification tool will clean and enrich addressdata as it is captured, and standardize the information based ongovernment postal standards to ensure future mail delivery.

Keep Them Coming Back

Accurate address information is important to compliance, but italso has a critical element in customer service. When apolicyholder files a claim, he is counting on his insurance companyto resolve the claim in a timely fashion. The execution of theclaim process can either ensure a policyholder's continued businessor it can cause serious damage to the relationship, ultimatelyleading to a policy termination.

State and local districts regulate the timeframes that insurershave to respond in writing to a policyholder, but it is in acarrier's best interest to respond as quickly as possible to aclaimant, not just to meet regulatory timelines. By deliveringdocuments to a claimant quickly and meeting or exceedingexpectations, the carrier can overcome any doubts the policyholdermay have had in choosing a carrier. Remember, customers are notpaying for insurance just to pay for insurance; they are payingwith faith that they will receive great customer service and claimresolution when something goes wrong.

A simple, back-to-basics approach for claims can help withcompliance issues and customer service. Implementing an addressverification tool is the only way to ensure that accurate addressesare being used throughout the claim process. These tools provide alarge return on investment in a short amount of time.

An address may be the most basic piece of contact informationcaptured, but it has a large and often underrated effect oninsurance carriers. Why bother to get such a basic piece of datawrong when the technology is out there to ensure it is right everytime?