Claims management is more complex and involved than ever before. The claims management process within an insurer has historically been broken down into three components: people, processes, and technology. But because modern claims can be so complex, even the strongest mix of those three components can be pushed to their limits by the rapidly changing world of claims management.
As global systems change, claims are changing with them. Reports collected in recent years highlight a growing trend in claims' rising frequency and severity. This underscores the increasing importance of digitizing and automating as much of your claims process.
Trends Impacting Claims Management
Claims Management Systems have increased in adoption since the pandemic began in 2020.
First and foremost, claim volume across US insurers alone is increasing and insurers experienced a $26.9 billion underwriting loss in 2022, more than six times the loss in 2021. Claims costs, impacting both claims payouts and internal expenses, are also skyrocketing: lines of business such as workers' compensation are climbing in payout amounts and inflation is forcing a higher cost of financial recuperation across losses.
Furthermore, customer expectations are changing and becoming more demanding. Customers are looking for ease of use, speed, and self-service in their claims management process and prefer insurers who provide them. A shortage of skilled claims professionals has also created a different client workforce, with many claims adjusters having a fraction of the years of experience compared to prior insurance professionals.
Claims Process Transformation: The Cloud, Digital Initiative, and an OmniChannel Experience
Data and analytics currently live in multiple places across an enterprise, but insurers are realizing that combining their data in meaningful ways is creating better outcomes for themselves, the claimant, and improving policyholder retention. Leveraging cloud data properly leads to improved claims and triage adjudication, while also allowing insurers to better forecast claims and loss reserves. With a holistic view of data sources, insurers can manage litigation expenses, detect fraud, and even improve customer experience.
The primary drivers for transformation on the cloud surround insurers wanting better claims ecosystems, storage capacity in a cloud, access to data lakes, and the ability for Artificial Intelligence (AI) and Machine Learning (ML) to offer up insights a human might miss. New technologies such as AI and ML need to be used to capture more detailed information about a loss claim, such as photos, images, videos, and IOT data. AI and ML can perform visual inspections, automate damage appraisal, estimate loss, and detect fraudulent activities–saving an organization time and money.
The Rise of Intelligent Automation
Automation can remove unnecessary human intervention, increase operational efficiency, and reduce processing costs. While automation can help with labor-intensive aspects of the claim process, such as claim assignment, human interactions should still be cleverly deployed in the claims process. Automate intelligently: humans are still needed to guide their insured through the claims process, so determining what should be automated and what should remain human is imperative in the claims management process.
Communication with the different actors in the claims process is a critical component of effective claims management, so be sure you’re only automating aspects that are worth automating, and not removing the human element that creates a good customer experience.
Benefits of a Modern Claims Management System
New technologies dramatically improve the claims management experience. From letting the system identify claims that can be assessed and settled in minutes, to creating personalized, omnichannel communications, to improved outcome analysis, claims triage and adjudication, and even enhanced product pricing and design– a claims management system creates a digitally enabled, operationally efficient experience that empowers better decision making and delivers exceptional customer value.
What to Look For in a Claims Management System
When you’re shopping for a Claims Management System, look for a solution that is designed for configurability, processing ease, accessibility, and automation. You need a system that can tightly integrate data, systems, and people while remaining compliant with any regulations relevant to your industry–and be able to provide state-of-the-art reporting on demand. Your system should also enhance bottom-line performance and reduce inefficiencies, while accommodating multi-line claims automation across all channels of claims, such as disability, liability, auto, property, or workers' compensation.
Furthermore, your solution should have predictive analytics to address risk before it hits. Predictive analytics can assess how much money needs to be in reserves, the likelihood of litigation or subrogation in a claim, forecasting duration of claims, and high-severity claim flagging.
Risk is constantly changing, but a flexible claims management system can help you overcome uncertainty. If you’re looking to find the perfect balance of people, process, and technology to improve your claims management system, chat with an expert to see how Ventiv’s Claims Management system is right for your organization.
