- Where Insurance & Technology Meet

DIY Claims: Tools and Analytics Support Innovation

From home improvements to financial transactions, ‘Do-It-Yourself’ has become a trend for consumers.  A recent article by a noted industry consultant suggests the DIY philosophy might well be carried forward to claims handling, with benefits to all concerned.  Like other DIY projects, the right tools, and skills, are keys to success.

Christopher Tidball, who authored “Re:Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary”, wrote recently in Property Casualty 360: “Just as we shop, fly and communicate virtually, so too can we adjudicate claims. While not every claim will meet the model, many claims will; which in turn enables insurers to redeploy staff to more complex situations.”

Tidball gives the example of an automobile insurance claim where the insured contacts the insurer who applys criteria, and then determines that the  claims can be handled by the insured without adjuster intervention.  The insured takes the car to a repair shop which works directly with the insurer to effect the repairs and service the customer.

The process benefits all. The insured doesn’t have to wait for an adjuster, and feels empowered.  The insurer doesn’t have to incur additional expense, and can focus efforts on more complex claims.  The insurer also sees increased loyalty from the empowered customer.  According to Tidball, “Carriers currently using this process are seeing dramatic improvements in across the board metrics.”

So what is the stumbling block to wide implementation?  Put simply, carriers need the right technology to manage the communications with the insured and the repair shops (and detect/prevent abuses and fraud).  More significantly, the carrier needs modern back office technology to support the communications in real time and  to help determine which claims are amenable to the self service model.  That requires both processing and analytic tools.

We continue to see movement to modern core technologies, including claims administration systems.  However analytics seems to be less mature, both from an implementation and corporate positioning perspective.  While not focusing on insurance specifically, a recent report from Deloitte, entitled ‘Real Anlaytics’ articulates the issue well:

While getting the right answers is critical, many organizations don’t normally know the right questions to ask to get there. Powerful new tools and supporting infrastructure have removed most technical constraints, but analytics initiatives continue to suffer from the lack of a clear vision and commitment to embed analytics-based approaches into how work is performed. Real analytics can add knowledge, fact-based predictions and business prescriptions – but only if applied to the right problems and only if the resulting insight is pushed into action.

There’s an old saying that goes:  ‘When the only tool you have is a hammer, lots of things look like nails.’ Unfortunately, performing surgery with a hammer doesn’t do much to improve claims ratios.