Productivity Declines as Carriers Struggle to Keep Pace with Rapidly Changing Systems
Portland, Maine — October 6, 2006
ClaimVantage, an innovator in claims management and payment software solutions, announced the results of a comprehensive study of group and individual disability carriers claims technology. The study was sponsored by ClaimVantage and conducted by JHA, a disability reinsurance, consulting and research firm, in an effort to better understand industry challenges and how technology can assist in successfully managing claims operations. Of the respondents, nearly half 46 percent indicated lower productivity levels and dissatisfaction with their current claims management technology. ClaimVantage presented key findings at the DI & LTC Insurers Forum on Sept. 7 at the Hyatt Regency Grand Cypress hotel in Orlando, Fla. The conference was sponsored by LIMRA International, LOMA and Milliman.
Overall, the results of the study indicate that companies across the industry face similar challenges managing their claims processes largely due to rapid advancements in technology. Some of the major issues identified involve claims payment solutions, customized or over-engineered systems and image-enabled systems. Seventy percent of the respondents have semi-automated payment capabilities, while the remaining are fully automated on legacy systems with up to 20 years of in-house development built-in. Nearly 80 percent of the respondents indicated that their systems are difficult to maintain because they are highly customized vendor systems or over-engineered legacy systems. Paperless environments are rated high on carriers wish lists, with only 41 percent using image-enabled systems. Of those, only 50 percent are individual disability carriers.
This report indicates that 81 percent of the respondents are constantly enhancing their systems to support new functionality, said Leo Corcoran, chief executive officer at ClaimVantage. Carriers and third-party administrators need a system that delivers the tools to scale to customer and market changes quickly with minimal training and resources this is the key to maintaining a competitive advantage.
JHA interviewed 27 claims contacts, representing 23 different disability carriers and third party administrators. The research covered topics including the functionality of current claims management systems, whether a legacy or vendor system is in place and which product lines are managed on those systems. System training and quality controls were also assessed.
JHA, a subsidiary of General Re Life Corporation (a Berkshire Hathaway company) is a leading disability reinsurance, consulting and research firm located in Portland, Maine.