The claim function is a key factor in the overall competitiveness of insurance carriers. Claims represent a significant portion of an insurer's balance sheet, consuming nearly 80 percent of the premium in the form of claim payments or processing costs. And claim service is where the insurer is put to the highest test of satisfying or disappointing its customers. Why then is the claim process at so many insurance companies broken? More importantly, how can it be transformed?

Carriers must improve the customer connection, reinvent the role of the claim professional, and implement a data-driven claim life cycle that can leverage information technology to bring maximum predictability, transparency, and profitability to the claim process. Three challenges face insurance companies on the path to high performance in claims:

The Customer Service Gap. Customer service expectations have risen dramatically in recent years. Accenture research indicates that insurers have a long way to go in meeting or exceeding these expectations, largely because companies outside of their industry — like Apple, FedEx, and others — are effectively raising the bar on customer service to generate loyalty. This increases overall expectations among customers for all businesses, and especially for services that are considered expensive, like insurance.