- Where Insurance & Technology Meet

Address Loss Containment and Security at the Same Time with a Change in Perspective

Insurers frequently struggle to come up with cost-effective and timely solutions for challenges that they know they need to address. In many cases, an outside or third party can help provide the needed help with little to no capital or operational expenses required from the insurer.

All that is really required is a shift in perspective, not a massive shift in internal processes or infrastructures. Big things can be achieved with small steps — if they are strategic.

Issues requiring a change in perspective

There are two related issues impacting insurers today that, we believe, can be addressed with a change in perspective:

Issue 1: Loss Containment. In a recent Towers Watson survey, 89% of Chief Claim Officers ranked loss containment either first or second in operational claim goals, even exceeding superior customer service which came in at 71%. When asked what their barrier was to achieving the loss containment 77% said that passive claims handling was the major issue.

Issue 2: Security. In EY’s Global Information Security survey, 92% of organizations said they are facing rising threats to information security, but 42% said their budgets would either stay the same or decrease in 2015. More than half (54%) of those surveyed also indicated that it is either highly unlikely or unlikely that their organization would be able to detect a sophisticated cyber attack. “Clearly, this situation is not sustainable in the medium to long term,” Gaétan Houle, national IT security practice leader at EY Canada noted in a statement on the survey results. “Organizations need to find a way to increase their resilience to cyber-attacks with the same amount of financial and personnel resources,” Houle added.

Here’s where the change in perspective comes in. We feel that insurance companies can address both loss containment and security by reducing their focus on internal solutions, and strategically partnering with vendors which:

  • Have the capability of turning passive adjusters into proactive adjusters using modern technology, and
  • Actively adhere to data and networking security standards.

We are not referring to the typical security or IT vendors, but actual operational claims vendors that all insurers are already using to adjudicate claims.

How can we hit both issues and contain costs?

It is actually far more straightforward than one might at first imagine. Vendors can provide tools that enable adjusters to become proactive while keeping them restricted to fully secure information channels.

These new technological tools come equipped with built in business rules, customized workflow, and document management capabilities that constantly monitor all pending claims and prompt the adjuster before tasks are due. This allows the adjuster to drive the claim rather than re-actively waiting for prompts from policy holders, vendors, brokers, etc..

If an adjuster has a pending list of 100 or more claims, it is highly unlikely they will be able to do anything other than handle them in a passive manner. However, if a computerized system constantly evaluates all open claims for key business rule based milestones, the same passive adjuster can quickly become a new proactive adjuster just by following the system prompts.

The exact same principle holds true for security. Each time an insurance company exchanges data with outside sources there is the potential for security issues.

However, if the adjusters are strictly dealing with, or even better, integrated with vendors who conduct all business within the confines of a fully secure, encrypted system, security risks to the insurers are greatly minimized without requiring any additional budgetary outlay.

In summary …

Benchmark IME feels that this shift in thinking or “perspective” – working with strategic vendors to achieve what would otherwise be difficult to achieve in an isolated internal environment – can provide tangible improvements with minimal costs.

And, based on the two issues presented above, it appears that is exactly what insurers are looking for right now.

Editor’s note:  Sean Cassidy is Vice President, Sales and Marketing for Benchmark Independent Medical Examinations Inc. Benchmark provides professional staff and state-of-the-art customized software to provide a seamless, straightforward, and effective IME experience.

Benchmark IME is hosting a conference on January 14, 2015 in Mississauga focussing on the catastrophic determination process in Ontario and the use of a wide range of scores as opposed to a single total whole person impairment score.