(This article was originally featured in Property Casualty 360)
Technologies, Tools and Data Combine to Deliver Centralized Control, Localized Response to APD Claims
The world has a local focus. Organizations of all shapes and sizes have implemented strategies to support the local execution of business practices and services. The insurance industry followed suit, with many carriers decentralizing. Regional offices were empowered to set procedures and enact decisions that would benefit local policyholders. This worked for a while and likely gave a lift to customer service at the micro level. Over time however, the negative impact on operational efficiency and carriers’ buying power put the debate over centralized vs. decentralized decision-making back on the table.
Advances in technology make it possible to have the best of both worlds: centralized operations that offer a single command and control structure where strategy is defined, process is developed, and efficient decision making is in place, while providing a local touch in regional claims handling.
The evolution of connected business networks, configurable platform technologies and the use of data are combining to create efficient, automated environments that make businesses run smoother, smarter, and more profitably. For example, today’s leading networks connect insurance carriers with repair facilities, policyholders, parts suppliers, salvage pools, satellite offices, and remote employees. Technology platforms empower least-cost, highest-functionality claims workflow applications. Data gathered by that platform from across carrier networks, helps to inform and advance decision-making, while standardizing operations and guiding strategy.
To keep pace in today’s world and deliver on consumer expectations for products and service, centralized operations can be a claims executive’s best strategy. We’ll share insights into the key process steps that are benefitting from a centralized approach so you can decide if it’s time for your organization to give centralized operations another look.
Consumers Take an Active Role in the Claims Process
Nearly 50 percent of consumers are always connected to, and interacting with, their mobile and digital devices, according to Vivaldi Partners Group.¹ So it’s not surprising that many of them expect to be able to interact with the companies they do business with through their preferred device. Insurance carriers are no exception and many consumers expect that they will have an active role in the claims and repair process. This can be great news for carriers prepared to offer mobile solutions that facilitate policyholder engagement.
For certain repairable claims under $1,500 (approximately 40% of claims are below $1,500²)carriers might give customers the option to handle the front end aspects of gathering claim-related information. Consumers take the required photos, input any required data and submit the claim to the carrier. Often, the damage is slight enough and the photographs clear enough that the estimate can be written by a desk appraiser in minutes. Because it’s a staff appraisal, it can be approved automatically and the adjuster on the file is cleared to settle the claim. The consumer gets a near immediate resolution, a leading indicator of customer satisfaction with auto claims, and you see improved LAE.
Technology is only part of the equation. What organizational adjustments might advance your mobile strategy? Have you considered shifting staff appraisers to full or part time desk review positions to support more straight-through claims processing? The additional benefit is that you get more productivity from the current staff. This approach provides the carrier benefits by reducing LAE and improving employee engagement. A centralized organization with a view of the big picture has a higher likelihood of noticing this trend and making the appropriate organizational changes to capitalize on it.
More Intelligent Routing
When a claim is reported, quickly knowing what to do with it can save carriers time and money. This also sets the tone for a positive experience with the policyholder. Using predictive modeling based on historical claims – not static questionnaires or rules based triage tools – is best for understanding cost effective and efficient claims routing options at a local level. Remember claims are local so you must have statistically significant data at the CBSA (Core Base Statistical Area) level in order to drive efficiencies. Approximately one- third of insurance company CIOs³ are looking to expand their investments in these areas. Yet, the best data and information becomes most powerful with integrated technologies that make it possible to take action on that information in real time.
What about new appraisal channels? Customer shop-of-choice networks have gained significant momentum in the last twelve months. Your customers want choice and control in deciding where their vehicle is repaired. Can you deliver? What happens if a new appraisal options emerges in the next 18 months? Who is responsible for reengineering your process? What is their level of authority at the carrier-wide level? What governs the rules the architect will follow to improve your workflow? A centralized organization has a greater capability to make big picture strategic decisions and implement them across the organization. You may risk losing customers if you are not in a position to implement these kinds of organization wide changes.
Centralized Management and Local Responsiveness
Technology is available today that allows you to leverage configurable workflow to centralize your claims process. Predictive routing can streamline FNOL with a consumer mobile app or leverage a shop-of-choice network that can provide your customers real-time status and support your CSI goals. By implementing a centralized operation and leveraging these tools, a carrier can help provide an efficient claims process in compliance with its business policies and best practices. The outcome is all in your favor: lower costs, faster response, and increased customer satisfaction. The time is now!
DATA – The UNDERPINNING OF CENTRALIZATION
The data generated across your network is a critical component of a centralized operation.
- It drives baselines—using historical data as a point of comparison to drive claims processing across the organization.
- It drives compliance—processing claims that are appraised and adjusted according to your guidelines.
- It drives strategy – helping management identify how trends or new capabilities are impacting results.
¹Vivaldi Partners Group, Always-On Consumer Study 2014
²CCC Information Services Data Warehouse
³Novarica, Mobile in Insurance Beyond Personal Lines: Current Trends and Expectations 2013