In general, these results may be obtained via fundamental improvements in business processing. Those process improvements are attributable to communications improvements enabled by exploiting the Internet as a medium. As a result, claims can be controlled more quickly by involving all of the right people at the right time, actually linking all the parties that comprise the supply chain and making them more collaborative.

Beyond that, e-claims technology can help make particular tasks routine, ensure consistency, encourage adjuster adherence to best practices and preferred programs, encourage suppliers to commit to completion dates, and allow carriers to monitor performance along the chain throughout the process. And because before-and-after measurements on these process improvements are quantifiable, e-claims is one implementation that can yield readily identifiable ROI.

Beyond the obvious volume, efficiency and customer-service improvements achievable by transferring claims-resolution processes to a shared, electronic medium, e-claims systems can achieve such positive outcomes by providing less obvious benefits.

For example, e-claims can eliminate the time and expense of receiving, processing, routing and delivering all the correspondence necessary to managing a claim file (and the fear that any or all of it will end up in a vacationers in-basket or lost in the document scanning process). Correspondingly, the expenses required to increase staffing levels and expand infrastructure as claims volumes grow also is eliminated, along with the administrative cost of maintaining, closing and archiving files.

Many routine tasks can be automated or eliminated. Since most e-claims systems provide sophisticated imaging capabilities, documents can be acquired digitally at the source (the supplier), transmitted, and automatically stored against claims or policies, reducing the need for “touches” and the possibility of human error. As a corollary benefit of electronic access, all those with the need and the appropriate security access can view scanned images at the same time, regardless of where they are.

As a latter-day version of the paper trail, electronic filesand the procedural paths created by e-claims systemsmake it easy to trace any action, decision, conversation or document, at any point within the process, and to derive substantive and accurate management-reporting information.

Significant time and money can be saved by eliminating third-party storage and retrieval costs. Once electronic image files have been created, there is no need for off-site claims file storage and archiving. If the cost of off-site storage and archiving is eliminated, the cost of file-retrievaland the seemingly interminable waits for storage firms to locate and deliver filescan be dramatically reduced as well.

E-claims systems tangibly improve customer service, shortening the time it takes to resolve claims; enabling claims-handlers to respond to inquiries without invoking the dreaded call-back; making it possible for claims-handlers to access any information or image within seconds; and reducing the need for voice mail and faxes.

These systems ultimately improve customer loyalty by making the entire claims-resolution process more convenient and less disruptive to the customer.

E-claims systems make it possible to more closely measure adjusters and vendors against program specifications, financial projections, and/or performance standards. Such specific measurements also enable claims managers to monitor performance and processes in real time, to ensure that all staff, vendors and suppliers are coordinated in resolving claims. This helps them to develop and direct training and guidelines for internal staff and external vendors, to provide quick and efficient supplier referrals, and to ensure the accurate information that makes such measurement and monitoring possible always is available.

Its unlikely that investment earnings on premium dollars ever will re-approach prior peaks. The competitive nature of the business and the regulatory hurdles facing premium increases will continue to challenge underwriting earnings. As a result, opportunities are now greater than ever to place process focus on the loss-resolution side of the business. The industry and the technology have come a long way, and insurers who seek every competitive edge are paying as much or more attention to their bottom lines as to their top lines.

Profit potential can be improved by improving the claims-resolution process. The Internet can be used to improve communications and speed up service processing. And there can be new opportunities to control costs, enhance customer service, reduce loss-adjustment expenses, decrease cycle times, lessen claim severity, increase volume profitably and improve loss ratios.

Colin Smith is vice president of operations at Castek, based in Toronto, Canada. The company develops business software for p-c insurers. For more information, visit www.castek.com.

Reproduced from National Underwriter Edition, March 31, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.