For an article we plan to publish in our June edition of Tech Decisions, I contacted several claims professionals to ask them about the state of their claims administration systems. Not surprisingly, the respondents—both large carriers and mid-tier—told different tales about the state of their systems.
I felt the response we received from Mimi Chizever, vice president of claims IT, Nationwide Insurance, was illuminating because it brought some light on the difficulties insurers deal with as they strive to grow—both organically and in the M&A area—while trying to find the best way to operate with their legacy systems.
Chizever responded to our question by saying Nationwide's current claims application portfolio is made up of a number of different applications and technologies, some dating as old as 30 years.
"Our current platform has proven to be very complex to maintain and enhance as we have also tried, over the years, to incrementally move to a state-of-the-art custom build," she said.
Nationwide initiated what the company is calling a Claims Transformation program in 2011 and Chizever reports it will be a four-year journey to transform the way Nationwide supports claims from a technology perspective with a packaged solution.
Not all insurers are the size of Nationwide, nor are there many insurers aggressively looking for acquisition targets the way Nationwide did in acquiring Harleysville Insurance, so their problems are unique.
Nationwide has the means to attack a problem in several ways. Unfortunately, many in the mid-tierdon't have either the flexibility or the technology budget to blend their IT and claims resources with those of a solution provider while still managing the day-to-day business needs of their customers.
The complications of such projects are daunting, but insurers that have undertaken such projects know the savings they can show in improved performance of claims handling and customer service will mean more in the long run than gambling that the legacy claims system will be able to keep plugging along with no effect on the bottom line.
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