The world has a local focus.  Organizations of allshapes and sizes have implemented strategies to support the localexecution of business practices and services. The insuranceindustry followed suit, with many carriersdecentralizing.  Regional offices were empowered to setprocedures and enact decisions that would benefit localpolicyholders. This worked for a while and likely gave a lift tocustomer service at the micro level. Over time however, thenegative impact on operational efficiency and carriers' buyingpower put the debate over centralized vs. decentralizeddecision-making back on the table.

Advances in technology make it possible to have the best of bothworlds: centralized operations that offer a single command andcontrol structure where strategy is defined, process is developed,and efficient decision making is in place, while providing a localtouch in regional claims handling. 

The evolution of connected business networks, configurableplatform technologies and the use of data are combining to createefficient, automated environments that make businesses runsmoother, smarter, and more profitably. For example, today'sleading networks connect insurance carriers with repair facilities,policyholders, parts suppliers, salvage pools, satellite offices,and remote employees.  Technology platforms empowerleast-cost, highest-functionality claims workflowapplications.  Data gathered by that platform from acrosscarrier networks, helps to inform and advance decision-making,while standardizing operations and guiding strategy. 

Critics of centralized operations cite the potential for lowercustomer satisfaction levels due to a lack of personalization. Thisfriction—operational efficiency rubbing against customersatisfaction—is critical to address before any move to acentralized management process is executed. The importance ofdelivering on policyholder expectations is essential to success intoday's consumer-centric marketplace.  

To keep pace in today's world and deliver on consumerexpectations for products and service, centralized operations canbe a claims executive's best strategy. We'll share insights intothe key process steps that are benefitting from a centralizedapproach so you can decide if it's time for your organization togive centralized operations another look.

Consumers Take an Active Role in the ClaimsProcess

Nearly 50 percent of consumers are always connected to, andinteracting with, their mobile and digital devices, according toVivaldi Partners Group.[i] So it's not surprising that many of them expect tobe able to interact with the companies they do business withthrough their preferred device. Insurance carriers are no exceptionand many consumers expect that they will have an active role in theclaims and repair process. This can be great news for carriersprepared to offer mobile solutions that facilitate policyholderengagement. 

For certain repairable claims under $1,500 (approximately 40% ofclaims are below $1,500[ii])carriers might give customers the option tohandle the front end aspects of gathering claim-relatedinformation. Consumers take the required photos, input any requireddata and submit the claim to the carrier. Often, the damage isslight enough and the photographs clear enough that the estimatecan be written by a desk appraiser in minutes. Because it's a staffappraisal, it can be approved automatically and the adjuster on thefile is cleared to settle the claim. The consumer gets a nearimmediate resolution, a leading indicator of customer satisfactionwith auto claims, and you see improved LAE.

Technology is only part of the equation. Whatorganizational adjustments might advance your mobile strategy? Haveyou considered shifting staff appraisers to full or part time deskreview positions to support more straight-through claimsprocessing? The additional benefit is that you get moreproductivity from the current staff. This approach provides thecarrier benefits by reducing LAE and improving employeeengagement.  A centralized organization with a view of thebig picture has a higher likelihood of noticing this trend andmaking the appropriate organizational changes to capitalize onit.

More Intelligent Routing

When a claim is reported, quickly knowing what to do with it cansave carriers time and money. This also sets the tone for apositive experience with the policyholder. Using predictivemodeling based on historical claims – not static questionnaires orrules based triage tools – is best for understanding cost effectiveand efficient claims routing options at a local level. Remember claims are local so you must have statisticallysignificant data at the CBSA (Core Base Statistical Area) level inorder to drive efficiencies.   Approximately one-third of insurance company CIOs[iii] are looking to expand their investments in theseareas. Yet, the best data and information becomes most powerfulwith integrated technologies that make it possible to take actionon that information in real time.   

What about new appraisal channels? Customer shop-of-choicenetworks have gained significant momentum in the last twelvemonths. Your customers want choice and control in deciding wheretheir vehicle is repaired. Can you deliver? What happens if a newappraisal options emerges in the next 18 months? Who is responsiblefor reengineering your process? What is their level of authority atthe carrier-wide level? What governs the rules the architect willfollow to improve your workflow?  A centralizedorganization has a greater capability to make big picture strategicdecisions and implement them across the organization. You may risklosing customers if you are not in a position to implement thesekinds of organization wide changes.

Centralized Management and Local Responsiveness

Technology is available today that allows you to leverageconfigurable workflow to centralize your claims process.  Predictive routing can streamline FNOL with aconsumer mobile app or leverage a shop-of-choice network that canprovide your customers real-time status and support your CSIgoals.   By implementing a centralized operationand leveraging these tools, a carrier can help provide an efficientclaims process in compliance with its business policies and bestpractices. The outcome is all in your favor: lower costs, fasterresponse, and increased customer satisfaction.  The timeis now!

To find out more about how centralization can work for yourbusiness, contact me at [email protected] or visitwww.cccis.com.

DATA – The UNDERPINNING OF CENTRALIZATION

The data generated across your network is a critical componentof a centralized operation.

• It drives baselines—using historical data as apoint of comparison to drive claims processing across theorganization.
• It drives compliance—processing claims thatare appraised and adjusted according to your guidelines.
• It drives strategy – helping managementidentify how trends or new capabilities are impacting results.

Sources:

[i] VivaldiPartners Group, Always-On Consumer Study 2014

[ii] CCCInformation Services Data Warehouse

[iii]Novarica, Mobile in Insurance Beyond Personal Lines: CurrentTrends and Expectations 2013