3. Failure to communicate a delay in the settlement of a claim in writing.

All three of these compliance issues require insurers to communicate with claimants, often in writing. Without accurate address, phone number, and e-mail information, these communications are almost impossible to complete, leaving the insurer vulnerable to compliance violations.

Bad contact data in this situation impedes communication and is often recognized through high volumes of returned mail within the claim department. Each piece of returned mail is more than just paper in an envelope -- it signifies a lost communication and a potential compliance violation.

It's All About Addresses

The claim process is full of addresses. Think about the number of parties involved in a claim: claimant, witnesses, attorney, doctors, law enforcement, and other insurance companies. Each party has unique contact information that must be accurate to ensure timely delivery of sensitive claim documentation.

Up to 35-40 different forms can be mailed in the course of a claim, creating an extensive paper trail. Each piece that is sent to an inaccurate address will be delayed or returned, resulting in additional staff work and claim delays. While many consider address accuracy only a small component or problem, insurers still operate with regulated compliance timeframes. With industry timelines in mind, no company can afford documentation delays or other communication returns. Address accuracy is, therefore, critical to insurance processing.

The process has an inherent problem, though. The people who capture the data are not those who use it. While it is not the claim department's responsibility to establish a customer record for the first time, the department is expected to communicate with customers through the use of that data. Claim departments have a vested interest in making sure customer information is accurate.

Insurance companies need to go back to basics and clean up the way they are capturing data in order to mitigate the probability of future compliance violations. Claimant data capture will always relate back to the ability to communicate and interact with a claimant. By using a proactive data verification approach throughout customer-facing business units, insurers will avoid compliance headaches and benefit from increased operational efficiency and cost-savings.

Start at the Source

Accurate data capture starts at the source of the customer relationship. By engaging the customer -- either through a web portal submission or personal interaction -- insurers can proactively verify contact details and prompt the customer for additional information where necessary.

If addresses are not verified during the initial engagement, the claim processer is left to interpret the data independently. Incomplete address elements -- like apartment numbers, street directionals, and street types -- or inaccurate information -- like typographic errors or transposed ZIP codes -- will likely remain within the system and disrupt claim processes and claimant communications.

Agent Interactions: Consider the agent or broker associated with the account. Insurers should provide these individuals with the tools to ensure accurate information, and then hold them accountable for it. The trick is to implement an interactive solution that flags incorrect data while suggesting potential corrections. By deploying such a system and enforcing its usage, insurers can be confident that the data collected by agents is accurate.

Customer Self-Service: If the agent is not involved in customer data collection, address verification can still ensure accuracy at the source of entry. Consider the new conveniences of the Web and technology like iPhone apps. While these self-service applications appeal to customers, insurers recognize them more as a hindrance when it comes to data quality.

Claimant data entered on the web or a mobile device is surprisingly inaccurate and can be the worst quality data entered into a database. Insurers often have mailings printed out automatically from a system; unchecked addresses can easily get into the claim process and delay mail without anyone realizing it. An interactive address tool can easily be put on the front of a web portal to check the address against a third party, standardize it, and then prompt the user for specific missing information while the customer is still engaged and interacting with the application.

Whether your system runs on agent-entered information, customer portal entries, or both, front-end address verification will ensure accurate data capture at the source of the customer relationship.

Customer Service Updates

While the initial data is collected during the customer on-boarding process, the claim and customer service departments must still participate in data updates. These can be sent in through the agent or come directly from the policyholder. However, the bottom line is that individuals are constantly changing their contact information, making it difficult for insurance companies to keep up.

The claim processor is responsible for capturing new data once the claim process has been initiated. By focusing on improving the contact data that is captured within the claim department, insurers can alleviate the compliance and operational risks that are caused by bad data captured in other parts of the organization.

The same goes for the customer service agent. Often, customers are in a hurry and want to get off the phone as quickly as possible. By having a verification solution, agents can cut down on the amount of keystrokes it takes to enter an address. With an interactive solution they are able to see the streets in a particular ZIP code and narrow down the information with each keystroke, preventing them from having to ask the customer to spell out a full street name or be inhibited by a language barrier.

Boosting Accuracy with USPS Data

Selecting a data quality tool is easy, but enabling it to do the job is more difficult. The ideal address tool will work seamlessly with your customer database and will ensure accurate and timely contact data capture.

There is only one way to get an address right: confirm it against the local postal authority's database. Repeating an address back to the customer may catch some mistakes; however, it is unlikely to cover all bad-data capture scenarios. Some don't know their own address.

As the population grows, new buildings and houses are created, resulting in the need for more addresses. More addresses lead to new ZIP codes and zoning changes within the USPS. While those living at a re-zoned address are notified of the change, many choose to ignore their new ZIP codes in favor of the old because they still get their mail. If an address has an incorrect ZIP code or is missing the +4, it is not just a cosmetic or formatting issue. It will take longer for mail to be delivered.

A robust address verification tool that leverages postal data can help. The ideal verification tool will clean and enrich address data as it is captured, and standardize the information based on government postal standards to ensure future mail delivery.

Keep Them Coming Back

Accurate address information is important to compliance, but it also has a critical element in customer service. When a policyholder files a claim, he is counting on his insurance company to resolve the claim in a timely fashion. The execution of the claim process can either ensure a policyholder's continued business or it can cause serious damage to the relationship, ultimately leading to a policy termination.

State and local districts regulate the timeframes that insurers have to respond in writing to a policyholder, but it is in a carrier's best interest to respond as quickly as possible to a claimant, not just to meet regulatory timelines. By delivering documents to a claimant quickly and meeting or exceeding expectations, the carrier can overcome any doubts the policyholder may have had in choosing a carrier. Remember, customers are not paying for insurance just to pay for insurance; they are paying with faith that they will receive great customer service and claim resolution when something goes wrong.

A simple, back-to-basics approach for claims can help with compliance issues and customer service. Implementing an address verification tool is the only way to ensure that accurate addresses are being used throughout the claim process. These tools provide a large return on investment in a short amount of time.

An address may be the most basic piece of contact information captured, but it has a large and often underrated effect on insurance carriers. Why bother to get such a basic piece of data wrong when the technology is out there to ensure it is right every time?