Agency-To-Carrier Collaboration Key To Drive Claims-Handling Improvements

With increasing regulatory pressure and rising costs, insurance carriers are taking a closer look at the role claims play in their agency distribution system partnership.

Many insurers are looking for ways to drive improvements, such as claims intake through the Web, claims data download, faster turnaround for claims and real-time updates. A variety of best practices translates into strengthened customer satisfaction for agencies managing the frontline client relationship.

But how could agencies benefit from carriers modernizing their claims administration systems?

In terms of technology upgrade priorities, claims have traditionally ranked behind policy underwriting. However, the widespread use of Web and mobile technology during catastrophes and major events has led companies to recognize the importance of claims administration systems.

After all, claims are bottom-line driven and measurable, and claims can yield feedback for true client satisfaction, especially through a company's distribution system to the independent agency workforce.

Forward-thinking carriers are realizing measurable claims efficiencies by focusing on the “four C's” of efficient claims process:

o Collaboration

o Cost savings

o Cutting-edge technology

o Clarity in the claims life cycle

For their part, agencies have their own four C's to tie to a carrier's need for claims improvement. Agencies tend to look at:

o Customer service (satisfaction)

o Cost of doing business

o Company reputation for innovation

o Claims agility

Let's look at how each can complement the other:

o Collaboration (carrier) vs. Customer Service (agency):

Collaboration can at times present difficult challenges for carriers, many of whom have disparate legacy systems that were never designed to communicate with one another. Information technology groups have worked heroically over the years to wring efficiencies from the legacy systems they inherited.

The advancement of Internet-based services and telecommuting, however, has created a work environment that stretches far beyond the brick-and-mortar office to generate a national and or global presence.

No matter where a company may operate, innovative technology solutions have improved the timeliness and efficiency of the claims process.

Collaboration has become tantamount to the notion of “anytime, anywhere” processing. Agency customer service representatives, working with an efficient carrier claims process, can find increased opportunities to create raving fans in their own customer base.

Timely responses for claims incurred create a winning combination of collaboration between agencies and carriers.

o Cost Savings (carrier) vs. Cost of Doing Business (agency):

When deploying new technologies, or modifying existing systems, agencies and carriers must carefully project the savings they anticipate. The return on investment in technology systems (usually measured in terms of savings) should be a key driver for systems selection and implementation.

Over the years, agencies have chosen technology that connects easily to their top carrier partners. Upload and download have been in a “tortoise and the hare race” to see which vendor and carrier can increase the technology touch points through seamless data flow.

However, in relation to claims, there has been a significant lag in terms of the connection between carrier systems and agency management tools. Some innovative agency vendors now offer claims download functionality from carrier systems, which can help improve the bottom line cost savings for agencies.

Both carriers and agencies ask the same question when investing in technology: Is this technology going to help us drive overall costs down?

Using technology during the claims process can potentially save significant dollars, especially for the carrier, which enables growth. A key step to savings is to establish quantitative and qualitative metrics.

Companies should ask themselves a myriad of questions to identify which metrics will work for them, including:

o Are we shortening our claims process?

o Have we controlled claims leakage?

o How can we measure the results of a paperless claim environment?

It is important to make a decision on what will be measured to be able to take a granular look at improving the bottom line.

o Cutting-Edge Technology (carrier) vs. Company Reputation for Innovation (agency):

Making the most of new technology and finding the right solutions to meet the organization's needs is more than purchasing based on the “sizzle” factor in a technology demo.

When agencies partner with carriers and create long-lasting relationships, they know those companies that seek to be innovative with technology to improve their business processes are the companies that will survive and grow into the future.

At the same time, carriers seeking to advance their partnership strategies through an agency distribution system create a culture of differentiation in the marketplace.

Companies that have a strong reputation for ease of doing business, quick time to market and innovative programs create winning solutions for agencies to grow their customer base.

o Clarity in Claims Life Cycle (carrier) vs. Claims Agility (agency):

A carrier's challenge lies in balancing internal process improvement while also satisfying the majority of their independent agency stakeholders, thus driving more business to their company.

Carriers can do this with systems that advance their opportunities for a quicker time-to-market strategy while also connecting to their agency partners' systems, thus improving clarity into the claim, policy and billing processing systems.

Companies need to evaluate their own best practices that have helped them grow as a company and maintain positive agency relationships.

To achieve the most clarity and efficiency in a claims process, carriers should conduct an analysis of their current claims workflow and identify their best business practices before selecting any software vendor to support the claims process.

True clarity will bring better efficiencies at any point in the claims life cycle, such as correspondence, diaries, reserving, payments, reports, metrics, subrogation and return to work, to name a few.

If an organization cannot view its claims process from start to finish–claims intake to claims closure–it may not have the right clarity for a winning and efficient workflow.

The four C's for insurance carriers of an efficient claims life cycle and the four C's for independent agencies as they relate to a carrier's claims process can help improve the business relationship.

Carriers evaluating innovative technologies to help drive bottom-line savings and improve agency partnerships can differentiate themselves in the current soft market by improving the ease of doing business, time to market and overall collaboration through the claims process.

Becky Clegg is product director for iVOS, the claims, policy, billing and bill review enterprise solution from Aon eSolutions, a unit of Chicago-based insurance broker Aon Corp. She can be reached at 925-242-7489 or at Becky.Clegg@aon.com.