The following is a continuation from a previous article in which we introduced the mechanics of a claims audit, as well as the benefits that can be derived from the results of an audit. The most obvious positive benefits arising out of claims auditing are the identification of:

• Strong claims handling activities and strategies that should be retained and built upon.
• Areas where claims handling are not as efficient or effective as they should be and that should be strengthened to reach a “leading industry practices” standard.

This identification process allows the insurer, third party administrator (TPA), independent adjuster (IA) or other entity to take steps to improve the overall claims program. The outcome of the improved claims programs should be reaching claim resolutions promptly, providing the policyholders with a level of service that meets or exceeds their expectations, and controlling claims costs and expenses to the extent possible.

Property Claims Are Different

The primary focus here is on auditing property claims, which require significantly different claims handling than the workers' compensation claims that we covered last month. Effective property claims management requires more of a claims processing effort, as opposed to claims management that we emphasized in handling workers' compensation claims.