Claim administration is growing increasingly reliant on claim systems, which provide tools to enable the adjuster to schedule work efficiently, record claim management activities and decisions, and retain information that is available on a real-time basis. In addition, these systems allow adjusters to manage the financial aspects of a claim that are critical to the insurer, third-party administrator (TPA), or corporation. To successfully develop, implement, and enhance such systems requires a cohesive partnership between the claim organization and the IT department. These two groups must combine their efforts and share a vision as to how the claim system will be used in order to create an effective end product and meet the needs of all parties involved.
As with all large projects, there is a possibility that the product of a joint Claims/IT effort will result in an outcome that does not meet the intended needs. Although a less-than-desirable outcome can occur for a variety of reasons, most often, it stems from a communication breakdown somewhere within the project. The primary focus of this article will be establishing and maintaining strong communications between the claim and IT departments. Some of the topics we'll address are defining the need; defining terms for mutual understanding; agreeing on the desired outcome; developing the project work plan; maintaining ongoing communications; testing the developed solution; and successfully implementing the system changes.
Defining Needs
One of the most important steps is to clearly define the desired outcome. Many companies have provided their claim adjusters with effective claim administration systems already, but for some reason, they are not achieving optimal results. In some cases, for example, claim adjusters may identify additional functionality that was not contemplated in the earlier roll-outs. Another possibility is that the adjusters may not yet have learned to use all of the features of the existing system. Also, the adjusters who use the system on a daily basis should be vetting the process, not just senior management who may be focused on corporate needs. The range of skills should also be considered. Invariably, there will be users who are PC-proficient as well as those who may struggle with technology on a day-to-day basis.
The claim department must convey what it wants without trying to impose a solution. It is equally important for IT to understand the purpose of the needed enhancement. If either party enters the project with presumptions and does not adequately discuss the need, then the project may be doomed. Both departments should converse about the desired enhancements in order to clearly define the pertinent processes. The combined team may find that a solution arising out of a candid discussion of possible alternatives may be superior to what was initially conceived. Also, IT may be aware of other claim system needs that can be combined with the agenda. This would ostensibly result in added synergies at a lower cost than the cost of the combined total of the individual projects.
Both claim and IT professionals may decide that it is in the best interest of the company to complete the project in small bites. Some projects have been shelved, delayed for long periods, or taken years to complete because of a tendency to pile on more desired features, thereby making the project unnecessarily complex. Furthermore, this tendency results in an inability to celebrate interim successes along the way or provide encouragement to claims, IT, and the company as a whole.
It should be noted that, throughout this project, many customers may benefit from the enhancements. IT should recognize that the claim organization is its "customer." Moreover, all must consider that the project enhancement should emphasize benefits to the ultimate customer, meaning the policyholder for which claims are being managed.
Mutual Understandings
It is vital that both departments are using the same terms to the fullest extent possible. Each group's tendency to use its own terminology or acronyms — which may cause confusion to the other — can represent a real danger. Developing a glossary of terms should be explored in some of the initial discussions. This glossary may be created formally or informally. Nonetheless, it should be a point of reference during the project. For example, if the project includes working on the claim reserving process, then there should be a transparent understanding of how to define "reserves." There are variations in reserving terminology, even within the claim industry.
Once the need has been clarified and the terms have been defined, it is critical to agree on the desired outcome. This agreement should include the claim processes that lead to or follow the changes that are occurring. Doing so will ensure that the work flow is efficient. The discussion of the outcome should focus not only on the enhancements for the adjuster, but should also evaluate the impact on other groups, including — but not limited to — management and supervision, finance, and the ultimate customer.
Devising a Work Plan
What comes next is one of the most difficult steps of the process: developing a project plan. The work plan should be sufficiently descriptive to allow all parties to follow the process. It should stipulate regularly scheduled meetings to discuss the progress and any barriers to completion that may arise along the way. Brief but focused weekly meetings to identify progress and potential problems will keep all parties informed while minimizing unexpected delays and encouraging discussion about alternative solutions, if required.
It is important to take this opportunity to determine the scope of the project. If this is not done — especially on a project that will require a lengthy period of time to implement — then there will be a tendency to tack on additional items, resulting in what we'll refer to as "scope creep." This scope creep may not only result in extra costs but also in project delays or outcomes that were not contemplated within the initial project description.
Ongoing Communications
Thus far, we've emphasized the importance of clear, concise communication. The initial excitement about planned enhancements may fade over time, however, because of other projects or competing responsibilities. This may lead to the inclination to reduce the amount of time and attention devoted to a particular claim/IT initiative.
Monitoring and discussing ongoing projects on a regular basis will be essential. Waiting for time to open up to review progress may mean that long periods of time pass between discussions. This can result in work being done that fails to address the stated project need or has deviated to some extent. Claim and IT departments should establish the discipline to schedule and attend periodic updates, being certain that they fully understand where they stand and adapt to changing conditions, should those occur. Otherwise, the resulting outcome will differ from the desired.
When IT has completed work toward what it believes is the solution, the process should be tested to ensure that it performs as intended and that the solution does not cause a breakdown in another process. Testing should include input by claim personnel who are not only using the process as intended but are also trying to "break the process." It is only through these tests that the company can determine whether the revised processes include the necessary controls required. The claim department should include users who demonstrate strong system skills as well as those with a more basic understanding. That way, the revised processes can be vetted before being rolled out to the full claim organization, and problems that must be corrected prior to final testing can be identified.
Once everyone is satisfied that IT is delivering the agreed-upon enhancements, it's time to train the personnel that will be using the system. Many companies push out system enhancements without sufficient documentation and training, resulting in a feature or a process that is either not used or is underutilized. The claim department plays a key role in providing documentation and training in tandem with IT, which fully explains the new features and how to use them. Communicating effectively and working cohesively in this regard and in all aspects pf the development and execution of the system will enable the company to attain the results it needs to operate more efficiently.
Gary C. Jennings is the U.S. P&C director of technology and process management for Crawford & Company. He holds CPCU, ARM, ALCM, AIC, ARe, and SCLA designations. He may be reached at 404-300-1045, gary_jennings@us.crawco.com, www.crawfordandcompany.com.
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