Murphy's Law is may well have been invented for the claims review and processing phase. Here is merely a short list of the many things that can—and often do—go wrong, along with the impact that can have for the property and casualty carrier:

The carrier's business guidelines regarding parts specified for collision repair are not followed by claims staff and repair shop partners for a variety of reasons. With no way to monitor whether the appraiser is making the most cost-effective choice based on available options, the carrier can't defend inconsistencies.
Inaccuracies in medical bills, such as duplicate billing and coding errors, can result in additional work for adjusters and overpayment by the carrier, which in turn may cause policyholders to reach their limits sooner than was otherwise necessary.
Desk reviewers may waste time reviewing every claim instead of the estimated 20 percent that actually require their specific attention, resulting a significant cost impact to those problematic claims, and unnecessary delays to the straightforward and simple claims.
If the re-inspection system is not integrated with other core systems, then the claims staff may spend additional time rekeying the same data. This time wasted could have been used facilitating the actual re-inspection.
In the case of liability assessment, inconsistent evaluation can lead to overpayment, while failure to conduct any assessment is a missed opportunity to save money. Yet statistics show that most carriers assess liability on fewer than 5 percent of claims. In addition, adjusters who are not properly trained in negotiations lack the skills needed to reach a satisfactory solution.
A carrier may not be immediately alerted to potential fraud and may pay on a fraudulent claim or overpay for over-use of medical treatment. The impact is huge, as evidenced by a 2012 FICO survey of U.S. insurers. FICO found that 45 percent of respondents estimated that insurance fraud costs were 5 to 10 percent of their claims volume, while 32 percent said the ratio was as high as 20 percent. The FBI estimates the total cost of insurance fraud (non-health insurance) exceeds $40 billion per year.[1]

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A Day in the Life of a Claim: The Review and Processing Phase

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