Session Title: Strategies for Creating and Implementing a Claim Audit Process

Track: Management

When the Cincinnati Insurance Company implemented a new claim management system three years ago and effectively moved from a paper-based claim system to an electronic one, the company also took the additional step of establishing a headquarters claims audit unit. At the 2007 ACE America's Claim Event, Ken Kerby will discuss the strategies his company used to create and implement this unit, and he will explain why it can be a valuable asset to other companies.

Unsurprisingly, Kerby recommends getting management to sign on for the creation of a claim audit unit before doing anything else. For that to occur, he said that management has to see a value for it, or else the project faces little chance of succeeding.

“We look at an audit unit's role as being the eyes and the ears for management,” said Kerby, who is the superintendent of the claims audit unit for the Cincinnati Insurance Company. “Every company and claim department has a strategic plan they put together that outlines goals and objectives. But who's monitoring that? The people on the front line who are doing their daily claim work — are they looking for anything that could impact the strategic plans for a claim department? My guess would be no. They probably are more focused on a case they have going to trial, not the different risks from a strategic plan standpoint.”

After gaining management approval, Kerby next focused on the quality of data being collected, something Cincinnati Insurance had an easier time accomplishing with its new claim management system. Without this consistency of data, an audit unit's effectiveness can be marginalized on two fronts.

“When you have an automated system like this, and you have all of your field adjusters putting information in, you want to make sure you're getting the best information possible into the system because then you can use data mining to make decisions,” said Kerby. “The other main function of data integrity is maintaining an accurate representation of our claim controls that we have that are related to Sarbanes-Oxley requirements. Any financial controls that the headquarters claims department owns, we keep a running tab on those to make sure people who are thinking about changing the process ensure that it doesn't impact our controls.”

This is just an amuse bouche of what's to come in Las Vegas, but what Kerby really wants attendees to walk away with is this: If your company does not have a unit like this in place, think about what is being missed. Think about the processes that might be broken and the leakage that is occurring because no one has taken the time to look at the big picture.

“If you have your goals and objectives that you set but you don't have somebody auditing, how do you know if you're measuring up?” said Kerby.

A Case Study in Wireless Technology

Presenter: Joe Marcum, Director of Field Services, Indiana Farm Bureau

Session Title: Leveraging Wireless Technology to Improve Claim Processing

Track: Technology

The once steady march towards a digital and wireless work environment is starting to look more like a 40-yard dash, with companies implementing new technologies every day in order to gain an advantage and increase efficiencies. Is your company setting the pace, or is it lagging behind, trying to catch its breath? Joe Marcum, director of field services for Indiana Farm Bureau, will give a second wind to those from the latter group with his session called, “Leveraging Wireless Technology to Improve Claim Processing,” a case study he will present at this year's ACE conference on June 25-27, 2007.

Marcum's wireless configuration for his staff appraisers has attracted a lot of attention over the past several years. His current system uses a Panasonic laptop in conjunction with the hand-held screen device called the MDWD, which communicates wirelessly with the laptop using an RF signal. The tandem devices work in two ways.

“The first concept was that appraisers could leave the laptop in vehicle,” said Marcum. “My guys are writing estimates in the field all day long. They're out in the weather, they're in body shops, and they're in tow lots. For my guys to carry a laptop or a notepad and balance that on an arm all day long is pretty tiring. With our configuration, appraisers can make their entries using the much-lighter hand-held screen, and it's talking live to the laptop, which is in the car.”

The wireless solution also opened up other opportunities for Indiana Farm Bureau. Marcum was able to eliminate his direct repair program since his appraisers now write the estimates instead of the claimant taking the car to a mechanic.

“The body shops are happy to write the estimate, but you have to take the vehicle to them,” said Marcum. “My guys are mobile, so we go to the customer and we'll write the estimate and they can take it to any body shop they want.”

Learn more about the process Marcum went through at this year's ACE conference, including how he teamed up with Panasonic to get custom equipment tailored to suit the Bureau's specialized needs, and how the configuration has further productivity since being implemented.

“We are truly wireless now,” said Marcum. “I think we're a good model in terms of making it work.”