High performance claims handling will rely on turning routinely overlooked data into actionable information and knowledge.
Boston, MA (July 21, 2014) – A new report published by Aite Group, Data: The Foundation of High Performance Claims Handling, highlights the increasing role that cognitive computing will have as its ability to process knowledge catches up with the insurance industry’s ability to process data in the race towards high performance claims handling.
Aite Group’s research is based in part on a 2013 study of new entrants to the U.S. P&C insurance claims-handling market and looks at how new technologies have the potential to change key processes from which most policyholders derive their views of any carrier.
Claims-handling proficiency – keeping the promise to compensate policyholders for covered losses quickly and efficiently – can’t continue to come from tweaks to existing processes, says Aite Group, but from increasing the performance of those processes by making better use of what they operate on – data. This data is found in underwriting, policy, and claims systems as well as external data sources. Aite Group research finds that approximately 15% of loss costs and loss adjustment expense (LAE) could be saved with the proper use of technology. The potential savings from the better use of technology are significant: using the 15% figure, for a carrier with US$750 million in premium, the innovation opportunity could be over US$110 million.
In addition, one aspect of leveraging data to a fuller extent is in the amount of time savings that high performance claims handling could provide to supervisory management. Having data and information that better informs both automatic and manual claims decision-making via continual analysis will have claims managers working on the files that matter the most, according to Aite Group.
“Carriers that pursue high performance claims will reduce claims leakage, improve workflows, and help policyholder retention as well as the retention of claims professionals,” says Jamie Bisker, senior analyst in Insurance at Aite Group. “Engaging claims professionals with new technology and not confronting them with it will help assure faster utilization and the positive results that come with it.”
About Aite Group
Aite Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, wealth management, capital markets, and insurance, Aite Group’s analysts deliver comprehensive, actionable advice to key market participants in financial services. Headquartered in Boston, Aite Group works with its clients as a partner, advisor, and catalyst, challenging their basic assumptions and ensuring they remain at the forefront of industry trends.
Source: Aite Group