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The Insurance Commodity Battle

By managing expert services, an insurer can realize cost savings and enhanced operational efficiencies while expediting the claimant's return to normalcy.

By John Mullen | Updated on March 21, 2011

In an intensely competitive insurance market, property and casualty (P&C) insurers must be keenly focused on improving operational effectiveness to drive profitable growth.  In such efforts, claim processing will remain a critical area of focus.  It’s no wonder, then, that global insurance technology spending on claims processing is predicted to grow at a rate of 5.2 percent in the period 2010-2013, according to Datamonitor, a market research firm.

Yet many of the firms investing in claims will be disappointed to find out that their pursuit of results in core claims can yield suboptimal results.  To be clear, core claims processing and operational efficiency are the critical foundation for success.  However, generating sustainable value from market leading capabilities requires a focus on the claim expert services that sit on top of core claim processes and have a direct impact on adhering to the accurate indemnity payout at the individual claim and aggregate enterprise level.  Processing will always be important, however, areas of expert services — cash handling, vendor management, salvage and subrogation, litigation, fraud management, risk control, reinsurance, predictive analytics – are the components of claims operations that have the highest impact on total claim outcome and therefore provide an opportunity for optimization.

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