Insurance claims operations management is beginning to break from traditional methods and seek technology to help in running their complex, people-intensive operations, a study has found.
“Claims departments have been historically reluctant to adopt technology solutions, perceiving technology as incapable of duplicating the decisioning process of an experienced claims adjuster,” said TowerGroup, a Needham, Mass.-based research and consulting firm.
The new research found that most claims organizations are still struggling to strike a balance between technology adoption and maintaining an intimate connection with their customers, agents and brokers, said TowerGroup.
The researcher added that the claims process is also being impacted by the loss of expertise due to the retirement of claims adjusters from the baby boomer generation.
“The loss of these adjusters will increasingly threaten the claims capabilities of many carriers over the next 10 years–making the drive to more effectively leverage technology all the more urgent,” noted TowerGroup.
TowerGroup said it believes the greatest benefit of technology to P&C claims operations will be automated information support for decisioning, rather than the full automation of processes.
“The right technology, including incorporation of predictive analytics, will allow claims adjusters to achieve a new and superior level in the claims service experience, the research firm noted.
Karen Pauli, a senior analyst in the TowerGroup Insurance practice, authored the report, titled “Technology Direction in U.S. P&C Insurance Claims Operations: Transforming a People Business.”
According to TowerGroup, the research found that leaders in the claims business are moving toward a new set of imperatives that will provide the granular management needed in today's complex business environment. The following areas were identified as key to the evolution of claims operations:
Claimant management
Vendor performance management
Fraud detection and reduction
Subrogation management
Litigation management
Reserves management
Catastrophe response
Compliance
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