- Where Insurance & Technology Meet

Claims 1.0 to 2.0: A Shift in the Marketplace, Mindset, and Requirements

Recent research on property and casualty claims by Strategy Meets Action paints an interesting picture of insurer plans for the next three years. The transformation that will take place over this time period will move insurers from what SMA calls Claims 1.0 to a more evolved state – Claims 2.0. This transformation will encompass a shift in the marketplace, a shift in mindset, and a real shift in requirements. While change in the claims area is not new, today insurers are showing an increased sense of urgency about improving the effectiveness of the claims handling processes and enabling their organizations to deliver needed capabilities in the areas of efficiency, service, and information.


  • Workflow and Rules – make it possible to automate the handoffs within the claims process. Most insurers are now achieving some degree of straight thru processing (STP) for the more transactional claims, allowing time for adjusters to focus on those specific claims that require their knowledge and judgment. According to SMA survey respondents, managing the workflow to improve claims efficiency is the number one business driver for IT investment. Investment in workflow and rules provides significantly improved customer service with very quick turnaround for the most simplistic claims. Proven superior customer service during the claims process can win business.
  • Electronic Claims Files – provide the capabilities to access information virtually. Today, in our world where efficiency is everything, access to claims files in a virtual space is a necessity. Electronic paperless environments working in conjunction with automated workflow capabilities get the right information to the right people at the right time.
  • Advanced Correspondence and Payment – bring speed and accuracy to the forefront. What was once a maze of documents and forms management is now being streamlined with electronic and paperless processing.


  • Interfaces with Users and Customers – are being customized to meet customer wants and needs as well as facilitate productivity inside the organization. As the population of Gen X and Gen Y insurance customers and users expands, the bar for what constitutes a positive customer experience and a productive work environment is being raised. Changing customer expectations place new demands on two fronts – the interface itself and the data used during the exchange. Customers are asking for current, accurate information about claims status and settlement that is available when, where, and how they want it. Transparency is a key requirement for today’s claims operations. Inside the insurance organization, intuitive systems that have a modern user interface are replacing many of the green screen environments that have been sitting on desks for years. Insurers are able to attract more highly qualified personnel, and processors are able to deliver better service in less time with higher levels of customer satisfaction.
  • FNOL – reporting is being automated to help the customer and the company. There is a win-win to implementing electronic self-service and real time reporting. Not only is the efficiency of the reporting process improved, there is a greater opportunity for early fraud detection. The ability to detect fraud from the onset of a claim can substantially reduce the claims payout, preventing loss payments for fraudulent claims that, in the past, were typically not recognized until it was too late.


  • 3rd Party Connectivity – eliminates duplicate steps. The goal of single entry with real time upload/download is being realized in the area of claims. Claims download is one of the fastest growing transactions in the download process.
  • Modern Claims Management Applications – meet the needs of a modern world. Modern claims management systems that provide capabilities to handle both traditional transactional claims as well case managed situations are being deployed to automate processes and connect with external data providers. By using predictive analytics and business intelligence, information is having a meaningful impact on both the effectiveness and efficiency of the claims process.
  • Claims Recovery – improves the bottom line. By using predictive analytics, data tools, and shared services, insurers are able to more proactively pursue subrogation. The ability to identify subrogation opportunities early in the claim handling process and the power to aggregate similar claims related to other insurers have the potential to make big dollar differences. Advanced tools for auto and property damage estimation are assisting insurers in the identification of salvage potential.

Urgency Surrounding Claims Modernization

With the soft market still at the forefront of challenges for insurers, retention remains a critical focus for insurance companies. Every encounter an insured has with a company presents an opportunity. How each individual touch point is handled can make or break the relationship and impact others. Each interaction opens the door to shine with superior customer service or closes the door with the loss of a customer. Companies that are top contenders in the marketplace today are providing more automated, rules driven, collaborative, and transparent claims environments. The reality is that Claims 2.0 is a mandate in the current competitive marketplace.

About the Author

Karen Furtado, a Partner at SMA, is a recognized industry expert in the claims systems space. With exceptional knowledge of core systems, Karen is the go-to person for all things related to how advancing technologies impact the insurance industry. Karen can be reached at [email protected].