I recently had the opportunity to present on straight-through processing (STP) for claims at the NAMIC Claims Conference in Orlando, FL. In my opening comments, I stated that while STP is effective for certain, simpler claims, it is not a realistic objective for all claims. Rather than talking solely about STP, insurers and the vendors that support them should focus their efforts on claims optimization.
Claims optimization is about making the entire process faster by automating lower-value, manual tasks while providing claims professionals with the right information at the right time to make critical decisions regarding the claim. It entails using analytics and AI to analyze structured and unstructured data at every interaction and task in the claims cycle to determine the next best action. When used correctly, applying AI and intelligent decisioning to the claims process will yield tangible benefits such as lower loss and expense ratios, along with improving the overall adjuster and customer experience.
Leveraging data and improving customer experience are top priorities for carriers regardless of size or lines of business offered. Carriers are interested in digitizing the entire claims process—from first notice of loss (FNOL) to payment. It is becoming more common to leverage third-party data providers to assist with fraud identification and severity scoring, and predicting the ability to minimize loss through subrogation or alternative payers is an emerging area of interest for both carriers and vendors.
The number of quality ecosystem partners available to carriers is at an all-time high. These partners enhance the core claim system’s capability to provide services essential to handling claims. Some services, such as outbound payments and litigation, support all lines of business, while others are line-of-business specific. There are multiple service providers to choose from for all aspects of the claims life cycle, including FNOL, inspections, appraisals/estimatics, bill review, subrogation and recovery, litigation management, and outbound payments.
Technology is great, it but must solve a real business problem to be valuable. In today’s economic environment, experimental innovation budgets have been significantly reduced or eliminated altogether. Therefore, it’s even more critical to understand where the opportunities exist to provide the biggest benefits (speed, operational efficiency, customer experience) and how they align with your overall business strategy.
Prioritizing the capabilities most valuable to your organization and choosing the right partners requires a process for identifying the right investment areas. If you’d like to learn more or discuss this topic, contact me at [email protected]. To dive into how the world of property/casualty insurance solutions is evolving, read our report Aite-Novarica Core Ecosystem Map for P/C Insurers.