According to a recent study carried out by Novarica, insurers aren’t providing IT departments with enough resources to respond to changing technology trends. Insurance technology is progressing faster than most insurers can keep up. New technological initiatives are continually introduced, and yes it can be hard to decipher what is worth investing in when the changes are coming hard and fast. But one thing is sure, if insurance carriers don’t keep up with changing technology, they will be left behind.
IT departments spend more than half of their resources running and maintaining their existing claims system, leaving little availability to introduce new offerings or to modernize core claims system. Depending on how your system is setup, there are many different things to consider, so ask yourself the following questions:
1. Are you using legacy software or a cloud-based solution?
Consider the benefits of the claim management system you currently use. If you’re using a 10-year old legacy system, it probably needs an update. Migrating to a new system might feel like a risky move, but not taking advantage of new technology can lead to a competitive disadvantage.
Whether you consider a whole system overhaul, or just add new offerings to complement your current system and enhance the claims process, is up to you. Cloud-based technology has many benefits, which we have highlighted before, and can be used to install satellite IT systems for new services such as mobile access to complement your existing system.
2. Are you using paper files or a centralized database?
I think a lot of you will agree with me, but I’m not a fan of paper files – they’re disorganized and can be easily misplaced. Claims information is highly personal and confidential, and storing this data in paper files is risky. What happens if critical information gets lost? There will be no additional record, and who knows where the data may end up.
It can also be difficult to share paper files, particularly in a large claims department. A centralized database can offer real-time claims data to be shared among various points of contact in your claims department.
3. Are you using claims automation?
Claim automation can undoubtedly improve the efficiency of claims processing, particularly the “low hanging fruit”. These low-risk claims are usually ‘clean cut’ and can be processed quickly and efficiently. Improving claim processing times can reduce resources, reduce costs, and improve customer satisfaction, which would be helpful to any business!
4. Have you Considered using Predictive Analytics?
Using claim automation is efficient and requires fewer resources to get claims processed quickly. But what about the high-risk claims that might fall through the cracks? Fraud scoring enables you to flag those that are likely to be high-risk based on indicators you choose.
For example, a claimant submits a claim on a Friday or submits documentation six months after the date of the claim.
5. What do your customers expect?
One final important question to ask yourself is what do your customers expect from you, their insurance provider? The answer will vary depending on the type of insurance you provide, so we’ll use an example to drive this home. A claimant with a disability policy might like to the ability to view their claim payments on a mobile device. Rather than having to call the insurer, the claimant can use their own mobile device to log-in to the mobile application and view the payment details in their own time.
From your business perspective, the above offers many benefits, including:
- More efficient claims processing,
- Fewer resources required to process claims manually,
- A centralized claim management system containing all relative claims information, and
- Improved fraud detection, to reduce the risk of paying out on fraudulent claims.
So how will you treat your IT department in 2017? Offer a larger budget to improve your core claims system, or continue using your current system and processes for another year?
If you are undecided about building a claim management system in-house or buying a vendor built system, this guide provides a list of key factors you should consider.