Capturing the Value of Claims Decision Optimization

Each year, U.S. Property-Casualty insurers pay over $200 billion in losses and spend nearly $40 billion managing claims. Broadly accepted industry estimates suggest that current payments and adjustment expenses on these claims include $11-$14 billion of overpayment, or leakage. Most carriers have implemented claims management systems to improve claims processing and reduce leakage through improved processing efficiencies. However, many carriers are missing a golden opportunity to reduce leakage by improving the decision making process of their adjusters. Claims adjuster decisions on “moderately complex claims” (i.e. shared liability, soft tissue injuries, litigation) can vary widely, are often inconsistent, and offer limited transparency, all of which can result in a carrier still incurring a loss and leakage rate of 10 percent or higher. Typically, sophisticated analytical techniques are widely used by both property and casualty insurance carriers. While these techniques have been deployed successfully for actuarial and underwriting purposes, it is in claims management where expert-based decision and analytical applications can bring about revolutionary innovation, bottom-line savings, reduced litigation expenses, and marketplace advantage.

Decision Consistency Drives Effectiveness

Many carrier executives are working to meet the following operational goals:

• Aggressively grow premiums without proportionately growing the adjuster base
• Reduce claims processing costs
• Improve customer service
• Improve adjuster productivity
• Maintain or improve corporate compliance
• Monitor results-based improvement on team and organizational performance

Executives realize they cannot reach these goals without injecting discipline and consistency in claims handing processes. Carriers require consistent, transparent, data-assisted adjuster decisions to determine comparative negligence, identify the potential for fraud, estimate injury damages, identify subrogation opportunities, and consistently negotiate outcomes based on facts. Many carrier executives have noted that this consistency in decision-making processes leads to claim handling efficiencies, and supports significant improvement in corporate goals and performance.

The Right Practices and Resolutions Right Now

ClaimIQ helps carriers by reducing losses paid by improving the quality and consistency of key adjuster decisions, and by reducing claim processing costs by streamlining and automating loss adjustment activities. ClaimIQ's solution delivers predictive analysis and real-time recommendations based on the carrier's internal best practices. It injects discipline and consistency in the adjuster decision making process, and dramatically improves the way a claims organization makes decisions on liability, injury, fraud and subrogation. Through an easy-to-use, web-based interface, these automated practices are delivered across the claims organization to the desktops of both junior and senior adjusters alike, helping claims organizations:

• Improve productivity
• Control risk with transparent auditable processes
• Implement accurate investigation, negotiation, and liability assessment
• Reduce loss and leakage by as much as 50% for liability, injury, subrogation and fraud claims.

ClaimIQ Delivers Results

The ClaimIQ suite includes five modular, integrated web-based applications that are often implemented in as little as 60-90 days:

• LiabilityIQ — Comparative negligence assessment offers consistent analysis of negligent tort law, breaches, and proximate cause.
• VerityIQ — Fraud identification and management provides predictive analysis to consistently and accurately identify suspect claims.
• InjuryIQ — Bodily injury management delivers best practices to investigate and negotiate bodily injury damages.
• SubroIQ — Predictive analysis, tools, and information allows adjusters and recovery specialists to identify successful subrogation opportunities.
• InsightIQ — Deep claims analytics enable carriers to analyze adjustment activity and claim outcomes.

The suite has proven to be scalable and robust, supporting over one million claims processed in carrier implementations. The suite may be hosted at the carrier site or at ClaimIQ's secure operations center, eliminating the need for a carrier to incur a large IT investment. In addition, ClaimIQ applications can integrate with existing claims management and legacy applications through XML application components written in Java (J2EE standard).

ClaimIQ customers have experienced the following results:

• 12-18 percent reduction in full liability claims (100 percent claimant liability)
• 5-13 percent improvement in estimation of insured's share of liability
• 13-15 percent improvement in bodily injury evaluations
• 23 percent reduction in the time it takes to process a liability claim
• 27 percent reduction in the time it takes to process an injury claim.

For more information, call 1.866.claimiq, email info@claimiq.com, or visit www.claimiq.com.