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The Legacy Claims System Facelift – 5 Issues To Consider When Looking At New Systems

It’s a difficult choice, but is keeping an older legacy claims system really the right thing to do?

Karyln Carnahan, a principal in Novarica’s insurance practice, has spoken eloquently about the challenges claims organizations face when keeping older legacy claims systems in place (see Insurers Need to Put a New Face on Claims).  Such older systems can be expensive to maintain, often operate as “islands” uncoupled from other systems, and lack key functional capabilities now required in a faster-moving world.

As Karlyn points out, the level of service that customers now demand of claims organizations can conflict with the limitations of older claims systems. From the perspective of front-line users, older systems can be, succinctly stated, slow and clunky.

With so many options what is one to do?

While historically the replacement of a claims system could seem like a 18-month root canal, new technologies and new approaches have made it possible to significantly reduce implementation times.   While this can make a decision to change systems more appealing, the evaluation of new claims systems still presents a myriad of options. Pages and pages of feature-sets offer tremendous advancement, but can seem confusing and even overwhelming.

So with all these options available, what are some key items to consider as you look at the marketplace?

5 Items to look for in a new Claims System

  1. Speed, Flexibility and Reliability. Really three-things-in-one, these attributes will allow your organization to compete more effectively, to be as efficient as possible, and to meet the service demands being placed upon you by a more sophisticated customer base.
  2. “Plug and Play.” The use of service oriented architecture, web services and data warehouses, enables organizations to incorporate a wide variety of third-party applications into a seamless, more powerful, user interface. Most importantly, it positions the organization with greater flexibility to make changes down the road, without having to change the heart of the system.
  3. Superior Information Delivery. Perhaps nothing is more important to the end-user than meaningful information delivered quickly. Think about multi-tiered, interactive graphical dashboards that deliver relevant information fast. Think about automatic report distribution via subscription services so that users don’t “run” reports, but receive them automatically when they want them.
  4. Strategic Features. Look for features that drive or change the underlying behaviors that improve claims handling overall. One innovative feature I recently saw in a system is a“living” Plan of Action document, using a combination of claim and client-defined fields. Keeping the end-user always thinking about their Plan of Action in this way leads to shorter life-cycles and faster resolution. Think about efficiency-oriented features like bulk payment modules that don’t require the end-user to open each individual claims file. Think about a Centralized Address Book that leverages the knowledge of all your claims professionals in one place, without duplication across the organization. In other words, think about features that are strategic, and deliver real value.
  5. Configurability. Your business is not the business down the street, and your claims system shouldn’t have to act like the system down the street. The ability to configure robust business rules, and to have client-defined fields, is critically important. Whereas this would have required massive programming in systems of old, this is not true today. Built-in configurability is paramount to not having to change your operations and procedures to support the limitations of a claims system. Imagine that!

These are five considerations that can help a claims organization to better position itself for the future.

What have been your experiences? What would you add to this list?

Posted in Claims Technology, SPOT on Ops.

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One Response

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  1. Taylor Smith says

    Michael Carey, former VP of Technology at New Jersey Manufacturers Insurance (NJM) posted this comment on Linked-In and with his permission we are posting the comment here as well because it is so relevant to the discussion. Thank you Michael.

    “Where to start…there are a myriad of issues to take into consideration, but the first place is to make sure business and IT are ready to partner, collaborate, and compromise. And I’m not only talking about the selection process, but most importantly the implementation process.”

    —- Michael Carey, former VP, Technology, New Jersey Manufacturers Insurance (NJM)

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