A new study from Celent, a research and consulting firm that focuses on information technology, lists key technology elements for insurance companies to implement to improve their systems to analyze claim technology requisites. It also presents several case studies of companies who implemented changes and how it affected their business.
According to one section in the 52-page study, which as a whole focuses on effective technology usage in the entire insurance industry, there are four key claim technology elements that can improve organizational structures and staffing levels of insurance companies.
The first is the establishment of an electronic case file. According to Celent, all claim information should be received electronically, or scanned into a system if need be. This allows for better claimant experiences and more accurate reserving, as well as easing compliance issues. Secondly, Celent said a rules-based workflow and skills-based routing system for claims should be implemented. This allows for claims to be modified and adjusted more easily. Thirdly, the company recommends automating fraud and subrogation referrals and medical bill reviews. Lastly, Celent said adjuster should concentrate on becoming wireless, which will allow field adjusters to transmit site reports, estimates, photos, and other information in real-time, and even issue payment in the field for uncontested claims.
The report also contains many case studies of companies who have implemented all or part of these suggestions. Two of the studies are reprinted below.
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FCCI Insurance Group/Digital Claim Files
FCCI Insurance Group (FCCI) is a regional commercial lines property/casualty insurer based in Sarasota, Fla., doing business in 13 states in the Southeast and Midwest. In 2005 FCCI had net premiums written of $550 million, about half of which was workers' compensation.
In 2002, FCCI began a two-year phased deployment of ImageRight's document management solution. Today, when a paper document arrives at FCCI, it is scanned, indexed, and stored in a SQL Server database. An FCCI workflow administrator identifies the document type (e.g. medical bill or subpoena), and using the ImageRight workflow engine, routes it into a designated workflow. The entire claim file is digital — in addition to scanned documents, it can contain digital faxes, e-mails, photos, voice, and videos.
Fully digital claim files provide many benefits to FCCI. The size of the support staff has been reduced; digital documents are now accessible to the people who need them in 24 hours or less; two people (such as an adjuster and an attorney) can look at the same document at the same time; work can be allocated among claim offices more easily, and FCCI's disaster recovery and business continuity plans are stronger.
Indiana Farm Bureau/Wireless Claim Adjusters
Indiana Farm Bureau provides laptops with 3G wireless Internet access to its field appraisers. Appraisers use mobile handheld devices that sync with the laptops to gather information, and they can send information from their laptops to the home office in real time without returning to their field offices to plug in.
By eliminating drive-time to the office and giving appraisers the ability to check assignments in the field, this technology makes them more efficient, and rapidly getting information back to claim adjusters lets them not only provide better service to the claimant, but also lets them gauge severity faster and forward that information to reinsurers more quickly. After a major hailstorm in April 2006, appraisers were able to handle two cars per hour spread over a wide geographic area.
With the increased efficiency of its own appraisers, Indiana Farm Bureau also has been able to terminate its direct repair program (in which body shops write estimates and appraisers review them) in 80 of the 92 counties that it serves, which lets it keep closer control of losses.
For a copy of Celent's full report, go to www.celent.com.
Interested in more technology tools/software news and in-depth articles? Head over to Claims' technology tools/software channel for more information.
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