Claims Challenge: It’s Time for a Change – Are You In?

By Marc Lanzkowsky – January 14, 2014

There are enough of us out there so let’s come up with some new ideas!

I have been in the claims industry in one way or another for the past 23 years. When I started as an insurance defense attorney only the secretary’s had computers and I was fighting with colleagues to hand over the case law book I needed to finish my research. Business applications were limited as were computer networks. Mobile phones were expensive and lap-tops were slow and bulky.

That was the world’s reality not long ago but since then technology has helped to innovate the fabric of our lives and transform our businesses. We have almost limitless information in the palm of our hand that 20 years ago would have required a library to access.

I for one revel every few years at how much we actually now take for granted was not even around ten years ago (both Facebook and LinkedIn are only 10 years old). Despite the innovation to the world around us, the claims industry has transformed very little in decades. There has been improvement in technology that helped to speed up claims processing and provided ways to prevent fraud and streamline the process. There has been more data to assess to help provide insight on what has come and what may come. And there has been more speicalization and focus on training and development. However with all of these changes, there has been little change to the core way claims are evaluated and paid. Claims have a process that they must go through that goes from intake – to investigation – to evaluation – to resolution – with a variety of detailed steps in between. This has been the case since the first claim was ever filed.

Claims as an assembly line

The claims process has evolved over time in a similar manner that manufacturing innovated at the turn of 20th Century. Claims have become like an assembly line. Claims follow a specific path and  specialization for aspects of the process has helped to streamline the flow and increase productivity for claims resolution (i.e. property damage adjsuters seperate from bodily injury adjusters). This has been a good thing for the industry and has enabled claimants to receive fair compensation where appropriate much faster than in decades past.

Look at many of the natural disasters of today versus those of only a few decades ago. While there are always the obligatory problems and issues, if one looks that claims processed for Sandy one would find “it took an average of almost nine days to get inspectors to a site after first receiving a claim, almost four days after that inspection to provide an estimate and almost six days from that estimate to issue payments.” (NY Companies Report In as Sandy Insurance Claim Numbers Climb, Online Auto Insurance News, 1/7/13) That is an impressive effort that could only happen with the factory like efficiency that now exists.

Certainly there is a place for factory like productivity and nothing is likely to change too dramatically for claims in  the future.  At the end of the day, that workflow of the claims value chain will endure. Regardless, what takes place within that workflow can and should certainly be innovated.

The challenge

So here is my challenge.  We belong to a community of claims professionals which extends across this World Wide Web touching thousands of current and past experts in the field. Through avenues such as The Claims Spot, LinkedIn Groups and other resources we can connect and discuss what works and ways to change and innovate. So let’s bring the power of this community to bear on various problems that may face the industry to debate new ideas to improve what we are already getting better at.

Let me start: The collaborative claim file

Here is an idea I would like to see discussed and debated:

We now have the ability to gather and digitize tremendous amounts of information rapidly and efficiently making it available instantly anywhere you happen to be. Every claim brings with it new challenges yet it is rare that the facts and circumstance of a claim have not been seen in the past. Currently it is usually the responsibility of one individual to follow the claim assembly line and determine an outcome.

With the ability to share information what if it was the responsibility of a team of people to review and assess claims as information is coming in? What if multiple claims professionals could collectively work on a matter to bring shared knowledge and experience to a claim file to help ensure a proper investigation is undertaken and a consensus is reached as to an appropriate valuation and outcome? It would be like creating mini virtual claims committees on every file. Everyone could bring their experience and assist in moving the case to a quick and fair resolution. This would be a truly innovative way of looking at the claims value chain.

What do you think? How would this collective community of claims professionals adress truly innovate the industry?