a half day seminar hosted by Insurance-Canada.ca in Toronto Thursday Feb. 14, 2002
Summary by Doug Grant, host, Insurance-Canada.ca
Claims is receiving significant boardroom interest, as both
a bottom and top-line impacting core competency. Effective use of technology and the
Internet are viewed as being an essential, but only one of several, components. On the
Insurance-Canada.ca site is a description
of the seminar and more detail about
the speakers and their topics.
Doug Grant, Principal at Insurance-Canada.ca welcomed the audience and kicked off the session
with two points.
The Internet is becoming a more integral part of our
society, in both our personal lives (banking, e-mail, research, and even purchasing) and
in business. At the same time computing technology is increasingly pervasive, driven by
both the traditional back-office applications which continue to improve, and by the
Internet where the consumer and competition push us all into moving more quickly.
The Claims process is still very manual. Few organizations
have a comprehensive back-office claims system and even fewer are using communications
tools, as represented by the Internet, extensively with their claims services partners and
providers. As a result most every process still involves manual, and too often
paper-based, process steps.
Patrick Vice, long time insurance Consultant and Director of Marketing at UniExchange Corp.
provided an overview of some issues in 2002 for Claims.
(larger summary available)
The economics of insurance today is the number one issue
with which everyone is grappling. This creates the expected conundrum: little money is
available for investment, but without investment it is difficult to become more competitive.
Technology has been used to some extent in Claims for a long while:
Traditionally confined to the back office and in recent
years for specialized applications like estimating, technology has improved some operating
and reporting functions.
By linking to policy detail and providing universal but
internal access to data, customer service based on internal improvements has been getting
better, with some implementations of call centres.
Led by glass shops and auto repair shops, niche but
important applications have been linked across organizations, between insurers and their
service partners. One-to-one linkages, which are often standalone in both shop and
insurer, can drive improvements but the scope is limited to that application.
The promise of Internet communications will come to fruition
through some type of portal or hub implementations which will dramatically improve the
usability of Internet Communications for both sets of parties.
Christine Haeberlin, Vice President Sales, The
Innovation Group showed how Customer Relationship Management and Claims Management are
indeed complementary business functions.
There are many challenges within the Claims environment.
The huge diversity in Claims, and perhaps the relative lack of investment in this area
over many years now places many in the position of having to spend more attention dealing
with the claim than servicing the customer. There are many reasons for this, and they vary
organization by organization.
Video clips of a claim scenario were interspersed with
slides and commentary, to effectively show us how a claim could be handled. Don Tapscott,
of Digital Foresight, predicts that the Internet as we know it is transforming already
into a Hypernet. Like many others he believes that e-business will bring huge cost
reductions, which are just around the corner. The relationships of the participants will
become paramount in creation of “business webs” generating product and service
differentiation and sustainable operational efficiencies.
There are many components to all of this. The maintenance
of a real-time or near real-time database of policy and client information which can be
made accessible to all who have a need to know, and effective cross-organizational
processes will be key factors in a competitive edge.
Scott Knight, Account Executive from Correlation Technologies described the need for
Collaborative Claims Hubs. (larger summary available)
In any supply/distribution chain environment with many to
many relationships, the promise of communications and transactional efficiencies is
dependent upon a middle servicing hub, especially in the early stages when many of the
participants are smaller or less sophisticated in their internal systems. Such a hub
accommodates differing levels of access and integration, and provides a single user
interface, thereby making the whole thing usable. With claims information (data, status
etc.) and frequent processes defined in the hub, much of the operational inefficiencies of
traditional voice and paper communications can be reduced.
Independent research, supported by practical applications
demonstrate returns in the range of 30-35% when businesses incorporate collaborative hubs
around their service/supply chain. Accident Benefit value models demonstrate a return of
$14 for every claim $1 spent.
Collaborative technologies provide the platform for all
participants in the insurance community to exchange information, be it vendor, adjuster,
manager, broker. The formation of either a public or private hub using collaborative
technologies enables vendor programs across all coverage lines to maximize returns.
(Comment by host – There have been many examples of hubs
in the past with different types of functionality – in the Canadian P&C Industry
ICEnet for broker-company EDI was replaced by CSIOnet, and work continues today towards an
Internet hub called the CSIO Insurance Portal for the same community. In banking we have
Interac for ATM sharing, and the long established Sabre system has served the travel
industry for many years.)
Doug Grieve, National Accounts Manager e-djuster
In a relatively short period of time e-djuster has been
able to establish a solid reputation as a niche claims services provider. The core service
is scheduling and quantifying contents losses. This is dependent upon a quality database
of items with pricing and replacement equivalents. The gathering of prices, scheduling and
presentation of the results become a differentiator if done well, and this is one area
where e-djuster has focussed.
Technology however is only a part of the puzzle. The
on-site presence, speed of service, customer service and empathy, focus on recovery, and
presentation of a schedule which is easily understood and used by claimant and adjuster
are all components of the business plan. Thus good management and execution of the plan,
use of good skills and processes and a focus on customer and claimant have helped
e-djuster to establish themselves and create a competitive differentiator.
Technology is only a tool, but a valuable one when used wisely.
Delando Hawthorne, National Business Solutions Manager, Mitchell International
The e-business promise is being realized in other
industries, and insurers understand the potential. Although long-established providers to
the industry have an asset base in intellectual capital, tools, systems, data and
information, that value is continually threatened by new ways of doing business.
Now that e-business is a major priority for many carriers,
insurers are looking to proven, financially stable companies to partner with in order to
grab the significant competitive benefits the Internet has to offer. Rather than
purchasing tools, which work on a linear scale, insurers are looking for process enablers
that will help them leverage the exponential powers of eBusiness.
Delando described how Mitchell has reacted to the arrival
of the Internet and its tools to keep step with its customers as they seek leverage from
these changes. Traditional tools for communicating have been updated and new approaches
implemented in order to address the opportunity. Today, Mitchell offers an Internet portal
into its suite of services and products and has offered a more granular set of offerings
so customers can pick and choose the functions they wish to deploy while looking for
incremental improvements to processes in different areas.
Rob Gow, VP, Castek; Keith Dalgleish, VP E-Commerce, HB Group; and Joe Vaccaro, Operations Manager,
A-One Auto Collision (larger summary available)
Proof’s in the Pudding: Proving and Measuring the Benefits
Until now little has been made available about the value of
a Claims Hub or Portal in a production environment where the process has been measured
intensively. InsuroCity, a service offered by Castek, was piloted last summer by HB Group.
In order to make the pilot meaningful, a good critical mass was used in the pilot – auto
physical damage for Ontario.
Keith described the planning, including the criteria and
objectives, which were established before the pilot commenced. As HB Group has a
relatively sophisticated Claims call centre already, they had many measurement
opportunities, which they continually measure. They also predetermined that the
implementation had to provide value – efficiencies, customer satisfaction, reduction in indemnity, etc.
Staff were trained pretty much on the job; vendor
participants came on site to receive a presentation and about an hour and a half of
training. Other than that, Joe indicated that the system was easy to use.
As expected from the nature of the Internet, most of the
savings were in communications as adjusters, body shops and rental firms shared
information. Call times with reporting claimants were reduced, even on the initial call.
Numbers of calls were reduced – often dramatically.
Keith described in response to questions the ongoing
requirements to work with all the participants to improve the process. It is easy to
implement a new tool and keep the old approaches, but the value will never be optimized
unless behaviours is changed too. Little things like getting more vehicles to preferred
shops, and getting everyone to enter the various target and performance a dates which are
required in order to better service the customer and manage expectations.
HB Group’s conclusion was a positive one as they decided to
convert from pilot to production at the end of the pilot period. Along with a continuing
focus on behaviour, they look to implement more classes of claims services providers.
Claims is an area of focus for insurance companies and
providers. Technology is one of the areas that is receiving attention. Whether small or
large, company or provider, a winning strategy will include technology, but many other
factors are as important.
A discussion among the audience members brought forward the
realization that the lack of an industry-sponsored hub will mean a variety and mix of
private and public hubs in this environment. In this scenario, it would appear that
effective coverage and good usability will only come if the hubs can themselves be
interconnected – much like the global EDI providers have been doing for many years.