This is claims technology month in Tech Decisions and there promises to be several articles published on what has been one of the under-financed portion of the insurance process. We recently posted an article from Michael Voelker on how claims departments are finally getting their piece of the claims pie.
In the article, SMA partner Karen Furtado is quoted: “There is going to be continuously increasing spending on claims. Some of that spending comes from enterprise suite deals where claims technology is part of the bundle, but companies are also making independent investments in new claims solutions.”
Older claims systems—much like policy systems—are not flexible enough to deal with the changes taking place within the claims departments of leading insurance carriers. The claims department is the No. 1 customer service connection for its policyholders and it is where the promise of insurance is ultimately fulfilled. Nothing angers a policyholder more than to find out that a carrier is hedging on its promises.
Certainly, insurers have the right to thoroughly examine claims. Fraud cases rob all of us. The inattention of policyholders—particularly in situations where the homeowner fails to take the necessary steps to correct measures, such as with the spread of mold—can't be the sole province of insurers, either.
Fortunately, those investing in modern claims systems are pleased with what they get to work with. Analytics have helped insurers determine whether fraud exists and how carriers should examine claims files. It wasn't too long ago when some insurers looked at fraud as “the cost of doing business.” Today, investment in analytics is the cost of doing business for claims.
But those are the bad claims. It is easy to understand how insurers can develop a lack of trust among some of their policyholders, but there are too many legitimate claims that are filed to lump everything in the smelly pile.
“We do business in fire stations, police stations, and school lunchrooms. One person's claim experience gets told and re-told to every other potential customer there, and we can't afford to have a negative claims experience because it can impact sales,” says Jim Kauffman, senior vice president, California Casualty. “I can't beat the drum enough about how important customer service in claims is.”
When the competition in personal lines insurance is as keen as it is today, that is a wise reminder for all insurers. And if their claims solution doesn't offer that level of service to policyholders, it might be a good time to invest in something new.
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