Each year, claims leakage costs insurance carriers as much as $30 billion, according to EPAM Systems, Inc., which noted leakage can account for 5%-10% of all claims paid.
The International Risk Management Institute, Inc. explains claims leakage as the difference between what a claim should cost and what the carrier actually paid to settle the claim. Inefficient claims processes, errant payments, poor decision-making and fraud can all lead to claims leakage.
By investing in technology, carriers can reduce claims leakage and fraud by as much as $117 billion, according to a 2022 report by Everest Group Inc. Everest's projections include P&C and life and annuity sectors.
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Steve Hallo
Steve Hallo is managing editor of PropertyCasualty360.com. He can be reached at [email protected]
