– February 23, 2010
Today’s modern claims systems have a wealth of knowledge about every aspect of claims operations. With the right reports it should be easy to get a basic snapshot of how effective your claims are being managed, and how well your business is doing. With all that information where is one to start? What are the key metrics that should be reviewed by claims and business executives to better understand their operations?
While every company will want to look at specific claims metrics around their lines of business, there are three essential report types that executives should be looking at. These include:
Let’s break these down further:
1. Claims Counts
Counts are simple monthly (or weekly, depending on volume) reports showing the current state of claims in the organization. It will include claim volumes as well as financial numbers. With these reports you will have a basic snapshot of the state of your claims operation as a whole.
Examples of clams count reports:
New claims for the month
Total open claims
Closed claims for the month
Reserves on all open matters (Indemnity, expenses, medical etc.)
Total paid on all open and closed matters (Indemnity, expenses, medical etc.)
2. Change Reports
Net changes from one period to another are critical reports in any claims organization. They are essential planning tools that can help understand what areas of the organization are doing well and which areas are problematic. Spikes in a particular area could mean a shift in trends that if caught early enough could assist in making better underwriting choices. These types of numbers can also be used to ensure staffing is appropriate and identify areas for improvement.
Examples of delta reports include:
Claims count changes
Total paid difference
3. Claims Summaries
Claims summaries are a more detailed report of specific losses. They include basic claims information as well as summaries of facts, damages and assessments. Knowing the specifics of a loss can help underwriters and executives truly understand the business they have written. Whether information on a coverage concern, an extreme loss, a pattern of losses, the information is critical to educating others beyond the numbers to actual losses. With this information better strategic decisions can be made regarding future underwriting.
Examples of two summary reports are:
Top 5-10 paid claims for month
Top 5-10 reserve changes for month
Check to see if these reports can be produced and if they can’t, ask why. Claims systems should be able to produce these types of reports. If they can’t then maybe it’s time to take a look at your systems again.
Regular reviews of basic claims metrics will give you a competitive advantage and allow you make informed strategic decisions. You can stay ahead of the curve, be nimble, react to changing conditions, and stand out in the marketplace.