Thinking About 2025: Driving Innovation in Insurance Claims Technology

Posted on December 12, 2024 by Marc Lanzkowsky

The U.S. insurance industry continues to exhibit its remarkable resilience, as underscored by its impressive financial turnaround in recent years. However, sustaining this momentum and preparing for future challenges demand more than just traditional strategies. As highlighted by the exceptional leaders featured in Insurance Business America’s Hot 100 2025, the road ahead involves fostering technological innovation in claims processing and ensuring the right expertise is on board to drive these initiatives.

The Call for Claims Technology Innovation

The modern insurance landscape necessitates a profound shift in how claims are managed. From the First Notice of Loss (FNOL) process to complex litigation management, the integration of advanced claims technology has proven to enhance efficiency, reduce costs, and improve customer satisfaction.

For example, AI-driven tools like predictive analytics and natural language processing are now being used to:

Identify high-risk claims early: This enables insurers to allocate resources effectively, mitigating costs and risks associated with prolonged claims.
Enhance fraud detection: Machine learning models can analyze patterns in data to detect anomalies that may indicate fraudulent activity.
Automate routine processes: By automating document reviews and data entry, insurers can free up human resources for more strategic tasks.

These advancements align with the pressing need for seamless systems integration. As noted in the industry, the “tech tango”—the harmony of old and new systems—enables companies to maximize the benefits of their investments without disrupting ongoing operations.

Hiring the Right Consultants for Success

Innovation in claims technology is a complex journey that involves navigating challenges such as system integration, stakeholder buy-in, and operational disruptions. This is where the role of specialized consultants becomes invaluable. It is critically important to recognize the gaps and seek complementary expertise to bridge them effectively.

Hiring the right consultants can ensure:

Objective assessments: Independent experts provide unbiased evaluations of existing systems and processes.
Tailored strategies: Consultants bring a wealth of experience across different industries, enabling the customization of solutions that align with an organization’s unique needs.
Streamlined implementation: With dedicated project management expertise, consultants help mitigate scope creep and ensure timely execution of technological initiatives.

Furthermore, consultants facilitate cultural change within organizations by aligning technology goals with broader business strategies. They act as catalysts for innovation, ensuring that both technological tools and the people using them are set up for success.

Balancing Technology with Human Expertise

The future of claims innovation lies in striking the perfect balance between automation and human oversight. As seen with solutions like AI-driven FNOL process, technology can handle simple claims efficiently, but complex cases still require human judgment and empathy.

Investing in robust training programs ensures that staff can harness the full potential of new technologies. It’s equally critical to maintain transparency in AI-driven decisions, fostering trust among both employees and customers.

Charting the Path Forward

As the U.S. insurance market is poised to reach $4.50 trillion by 2029, the stakes for staying competitive are higher than ever. Embracing claims technology innovation and enlisting the right experts to guide this transformation are no longer optional—they are essential strategies for thriving in a rapidly evolving industry.

The journey to modernization requires bold leadership, strategic investments, and a commitment to enhancing both technological capabilities and human expertise. By addressing these areas, insurers can transform claims management from a cost center into a driver of customer satisfaction and operational excellence.

What steps is your organization taking to innovate in claims technology? Share your insights and experiences in the comments below!

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

Posted on January 14, 2014 by Marc Lanzkowsky

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?

4 Areas Of Concern From The Latest Insurance Executive Conference

Posted on December 12, 2012 by Marc Lanzkowsky

Gaze into your crystal ball and predict the issues of the past year to be addressed in the coming one!

It’s that time of year. The top 10 lists, the reflections, the can I possibly attend another holiday party and survive through to New Years? Well I will not give you a top ten list but I will list out 4 key issues that seemed to highlight the sentiments of the speakers at the 23rd annual Executive Conference recently held in New York.

The title of the conference was “Driving Growth in the Life and Property-Casualty Insurance Markets.” The annual event brought together several key executives in both the Life, Health and Property & Casualty Insurance arena. This year the audience heard from the likes of Starr Insurance, Endurance Specialty, Aspen Insurance, Lincoln Financial, ING, and Zurich Global Life among others.

Nothing too shocking with these 4 issues to address

While the topics of discussion varied from panel to panel, a set of themes emerged from the various discussions. When looking back over the last year, and forward into the future, it seems that there were consistently 4 areas that these business leaders seemed to be concerned about. Each issue impacted each company differently, however, the the themes permeated throughout the program.

Technology and the use of data. A somewhat mixed statement about technology seemed to emanate from the various speakers. On the one hand it was acknowledged that the industry lags behind in adopting and using technology. Many companies still are working off antiquated systems that could use an overhaul. On the other hand it was noted thatthe industry is filled with valuable data that needs to be analyzed and used to improve outcomes. Companies that can use their data more effectively will have a critical differentiator in the future. Predictive analytics and modeling will be the key to increasing underwriting profit needed in these times of continued low interest rates.
Climate change and catastrophes. With the conference so close to the events and location of Sandy, the talk of underwriting and managing CAT losses was on the mind of many. There is a clear belief that climate change has affected weather patterns and will continue to create larger storms for the foreseeable future. The importance of getting the appropriate rate for risks, being better prepared from a continuity perspective, and looking to opportunities to underwrite new risk and innovative risks were just some of the topics discussed. Some of the issues around CAT management also related to governmental intervention that effectively re-wrtie contracts making it more challenging to underwrite.
Increased regulations. Solvency II, the fiscal cliff, the impacts of Dodd-Frank legislation, Systemic Risk (systemically important financial institution (SIFI) designation), the Federal Insurance Office’s (FIO), unclaimed property, tax compliance with SSAP 101 and FATCA are just some of the many potential compliance issues that could increase costs and expose companies to additional fines for non-compliance. While the general feeling was increased regulation was not going to change the industry for the better, the need to deal with changing regulations was going to have a real impact.
Social media as in customer relations as well distribution. Social media is here to stay and many have begun to address how to use this medium in both dealing with customer complaints or improving customer relations. There was a clear acknowledgement that social media can be the genesis of grass roots negative campaigns unless managed correctly. A few panel members spoke of how they have created new ways to communicate with customers and create more positive images around their products and services.

Looking ahead to 2013

I think the themes expressed by the insurance leadership at the conference need to be dealt with in the foreseeable future. Addressing technology and using data analytics will be the key to building productive, profitable and efficient organizations. That is all well and good, but the industry must also work to improve its image. For some reason the message gets lost that during castrophe’s the industry rapidly pays out billions of dollars in a relatively short period of time without any complaints. Adopting social media and engaging customers will help.

The future seems bright to me and I am looking forward to another year.

What do you think are the key industry issues from 2012 and what needs to be focused on for 2013?

Everybody Wants to Make Improvements In Claims But No One Actually Makes It Happen

Posted on June 15, 2012 by Marc Lanzkowsky

It’s Like Selling World Peace. Everyone Is For It But No One Wants To Pay For It

There is so much that needs to be done in the world of claims. Operations need fixing, technology needs improving and a futures need to be defined. For some reason however, we are all really good at talking about it and not so good about doing anything about it. The industry needs to take action.

We need leaders who will drive the initiatives needed to improve and modernize the claims industry. We are mired in an “it’s always been done that way” mentality and not doing anything about it. I know the day-to-day is an ever growing series of issues. It is because we are forever being asked to do more with less that action is needed. Strategic planning is a necessary evil and a plan must be put into place to improve the whole or we will be destined to “always do it that way.”

Claims departments need to think creatively and “out-of-the-box” if we are going to attract new talent to the industry. This also means acting and not just talking about acting.

Take Action With These 3 Ideas

So how do you act? check out these three suggestions for getting out from the wanting to improve to actually taking action:

Bring in a consultant for a fresh set of eyes… there is more there than you realize and having someone removed from the day-to-day operation will be like cleaning dirty windows. The clarity will allow you to see both good and bad and will give you the first steps to make improvement.
Buy one small application to help fix some aspect of the department. There are plenty of innovative technologies out there to help with everything from adjuster compliance (Xeneros) to claims auditing (the Audit Portal). Try one, they won’t cost too much but they will save you so much in time and expense.
Talk to your claims professionals. Spend a day with a few of the people on the floor and listen to them. Unfortunately many continue to do tasks they know to add little value because they too fall into the “it’s always been that way” frame of mind. I promise you they know more and if given the chance will provide some fairly decent suggestions to improve the operation. And guess what – this one won’t cost you anything.

How are you going to take action today?

2 Preventative Steps To Help Avoid Claims Crisis Before They Become Emergencies

Posted on June 11, 2012 by Marc Lanzkowsky

Want To Save Some Real Money? Don’t Have An Emergency Room Mentality In Claims

Seth Godin in his wonderful blog recently wrote about Emergency room doctors in organizations. These are the people that are really good at, and are rewarded, for stopping bleeding. Seth is questioning where is all the strategic thinking to prevent those emergencies in the first place? In claims we tend to hire and support that emergency room doctor mindset. As Seth states about these doctors, ”

It’s a mindset, not just a job.

You can pitch them as hard as you like about having them work to persuade their patients to give up smoking (after all, it saves lives in the long run), but I think you’ll find that they’re a lot more interested in stopping the bleeding.

Claims departments seem to be more interested in stopping bleeding than preventing it in the first place. We hire those specialists and reward those that can deal with the crisis as quickly as possible. Unfortunately we in claims don’t spend enough time trying to prevent the causes of the crises. Again, as Seth writes:

We need emergency room doctors, no doubt. I just wonder if we have too many of them in your organization. If all we do is reward fast first aid in what people do at work, is it any wonder we don’t have enough attention to the strategy and choices that would eliminate the need for all that running around in the first place?

So what can be done? How does one change the mindset? Well I will tell you so keep reading…

Prevention Is Not That Difficult If You Try

Prevention does require a base of knowledge and to “know how prevalent the emergency room culture is” within your organization. There are two simple ways to have your organization stay ahead of those emergencies and that is conducting an operational assessment and to develop an active internal review program.

1. Operational assessment: Take stock at where your organization is. When mired in the emergency room mentality it is easy to loose perspective. The operation seems to be getting along so what could possibly be improved. Or my favorite statement of “we’ve always done it that way and there is no time to change.” Is that really how you want your department to function?

Organizations change. Technology changes. Businesses are evolving. If you don’t assess your operation from time to time and look for possible areas to improve you are destined to continue the emergency room approach. At the very least, take a look at those repetitive tasks such as bill payment and taking in new losses to see if there there are opportunities to improve. Explore the technology offerings in the industry and see what if anything is available to enhance the ability of claims professionals to do what they are supposed to do – analyze files, set reserves, move cases to resolution and doing it all over again.

2. Internal Review Program: An active audit program to review for best practices is one of the best tools available to learn about your organization and ensure claims departments don’t get mired in the that emergency room approach to management. A regular program sets out the expectations for a review and creates comparative benchmarks to measure for future reviews. This of course is enhanced when the process is clearly defined and the review is consistently executed. Conducting regular reviews is a sure way to ensure emergencies don’t happen.

You Are Not Alone – Help Is Available

At Lanzko we work with clients to perform these operational assessments. I strongly believe that having someone that is detached from your organization is the best way to identify issues that may be ripe for improvement.Sometimes employees are too close to a problem inside an organization to identify it. Bringing Lanzko in can also help move change along. Let’s face it. No one likes change, especially Corporate America. But sometimes change is needed, and we can help “get the ball rolling.”

From an audit and internal review perspective, Lanzko’s The Audit Portal is a tool designed to help manage those internal reviews, create consistency and create benchmarks to become a more strategic organization. With a tool in place, Audit data is not just lost to a spreadsheet or attached as an appendix to a report. There is great information being lost in the traditional audit. We change that and provide meaningful, actionable information to improve operations.

Insanity: Claim’s Departments Can’t Expect Different Results Without Changing Their Organizations

Posted on May 9, 2012 by Marc Lanzkowsky

Why do we keep traveling in circles?

Maybe I care too much about our industry or am just frustrated by the lack of attention to quality claims handling, but this is annoying. Why should claims make up half of the most frequent market conduct issues for the Property & Casualty industry as listed by Wolters Kluwer for the 5^th straight year? As part of their review they track and analyze the results from state market conduct examinations. As with their prior studies, claims issues continue to dominate the list of state concerns.

In the 2010 incarnation, claims departments are being exposed to market conduct fines for:

Failure to properly acknowledge, investigate, pay or deny claims within specified time frames
Failure to provide required disclosures in the claims process
Improper documentation of claim files
Failure to process total loss claims properly
Failure to pay the appropriate claim amount
Failure to respond to the department of insurance and/or produce records requested during the exam process

I went back over the last 5 years of this study and the same issues keep coming up. Figure 1 charts all the issues and how many times they showed up on the study. These findings can be prevented with some focus on identifying issues and working to correct the problems.

Figure 1 * Five Year Market Conduct Claims Issues

For the individual result, see years 2006, 2007, 2008 and 2009

It’s time to raise the game!

Why are the same things coming up as issues year after year? We are now in an era of useful technology that should give companies an advanced look into their operations. Through oversight and a quality review program, claims departments are truly in the best position to prevent many of the issues raised on the top ten list. So whys has nothing changed?

I am sure every company is different and there are a lot of reason, but I feel there has been less and less attention to internal claim reviews and audits. When times are tight operations are thinned and doing an internal claim review is considered a luxury. Claim departments need to get back to preventing issues before they occur as the consequences for not doing it will result in increased claim costs.

So how does a claims department put themselves back on track? Here are a few suggestions:

Create standards: I know people are reluctant to create claim manuals for a variety of reasons, but there have to be some best practices in place that can be measured. Best practice documents can be drafted appropriately to minimize the risks of them being take out of context in a law suit. (Also if you are concerned, see our prior post of 7 Consideration When Drafting Claims Guidelines). Setting the standards and having staff work to those standards is a good starting place to ensure consistent results.

Audit for compliance: You can’t just sit there and expect everything will be fine you must review the work and ensure compliance. Audits are sometimes looked at with disdain, but when managed correctly they are a wonderful tool for training and improving the operation. Don’t just audit the old way, but instead collect data with a tool like The Audit Portal and understand where the breakdowns are (see Claim Reviews Empower Better Decisions By Putting Critical Information In Hand). From there you can truly assess how to correct the problem.

Fix and track problems: Getting all the information collected nice and neatly is a good start but now you have to improve on what was learned. Gather the information and look for trends and attack the problems. Is there a systemic problem or was it isolated? Can it be fixed with training or is there a technology solution that needs to be addressed? Analyze the issue and then develop a game plan for correcting the problem. Then – re-audit.

As a claims community we can do better. Let’s start a quality campaign to get claims issues off this list! Send this along to others in the industry and let’s start a trend.

Why Don’t Claims Organizations Track Claims Through The Process The Way UPS Tracks A Package?

Posted on December 28, 2011 by Marc Lanzkowsky

Shipping Logistics Made Easy

One of the most amazing things to me about the holidays these days is online order tracking for the various shipping companies. What a truly amazing piece of technology. Recently I bought a present for my son who was accepted into college early decision. I ordered a school sweatshirt and was able to follow it at every step as seen here:

I think we are all used to this kind of precision in the shipping industry.It certainly is in the interests of UPS to know exactly where packages are in the process. Being able to route resources and manage the logistics of a large shipping company require this level of detail. The fact is UPS now advertises that they are in the “logistics” business. At some point someone in the company came up with the idea that the consumer would also benefit from having the same information. The consumer can participate in the process and even re-route the package to a new address while their package is moving through the system. UPS understood the value to customers in managing their own shipping logistics and changed the way both shippers and receivers look at moving packages around.

Claims Logistics Can Be Easy Too

How many in the claims industry have this kind of detail about their claims in process? And if the claims customer could also track information and participate, how much money could be saved? If UPS can tell me that a 3 lbs. package has just been moved from one truck to another, why can’t claims departments use similar information about claims to understand and streamline their businesses?

How valuable would it be to truly understand from different aspects of a claim where it is in the process? Could resources be realigned to deal with small blips in claim volume or severity increases? Would the information help underwriters understand an emerging trend that may cause a need to shift pricing? How efficient could a claims organization be if it could see increases in vendor spends in one part of the country versus another?

How about if an insured could have certain access to the claim in process? Would they be able to assist in their defense more comprehensively? Could they help change the direction of the claim being able to see the path that is being undertaken?

Claims Tracking

Thinking of the claim as a package in transit may be one way to explore new ways to manage files. A claim package comes into the office. It is logged into the system and assigned certain attributes. It is then sent to a staging area where its attributes (shipping information) are analyzed and then it is placed onto the correct truck (claim department/handler) for delivery. Along the way it may have to be redirected for more analysis (various shipping locations) where additional decisions about resources such as experts or further investigation can be made (transfer stations or warehouses). From there it’s final course can be set and a settlement can be reached (delivery).

I can see taking all the information that is gathered along the way and have it used to understand, not just the single claim, but the entire book of claims. With this information a claims department could shift resources to be more efficient. Analysis could be done at each step to help improve efficiency and lower costs. Looking at claims through the eyes of other successful industries is a good way to attack old problems.

How do you think claims could benefit if they could be tracked like a UPS package?

100 Posts And Counting

Posted on September 6, 2011 by Marc Lanzkowsky

A New Milestone For The Claims SPOT

Last month I posted our 100th article for The Claims SPOT. When I started this blog I never believed I would be able to get to 100 posts and have to say it has not always been easy to keep writing. Fortunately there are enough topics in the claims world that makes finding new things to write about easier than I thought.

It has been a very successful first century of articles. We have had the honor of being listed as one of the top 50 insurance blogs by Lexis/Nexis and our recent partnership with Claims Advisor magazine will open our readers to even more interesting content. I am hoping to provide continued improvements that will be focused on helping claims professionals improve the way they do things.

Some Interesting Statistics

Looking back over the past 100 posts it may be interesting to know that we have had over 6,200 unique visitors looking at over 14,000 pages in 113 countries and all 50 states. Over 136 of our readers have taken the time to comment on a post and we are certainly grateful for the support and feedback.

In looking back over all that has been produced, there have been some interesting topics and articles that have been addressed. Like many in the industry, I believe a successful operation is dependent of compliance with well established best practices, so it came as no surprise that Best Practices was the most widely read subject area.

Like anything, some articles seemed to strike a bigger chord with readers including the top 5 most read articles from the past 100:

I am committed to continuing the journey I began in January 2010 and look forward to the next 100 articles.

What were your favorites and what more would you like to read about?

Shakespeare & Claims: Looking Inward

Posted on June 6, 2011 by Marc Lanzkowsky

Looking In From The Outside

Ariana Huffington recently wrote about taking responsibility for ones own action in her article On Dominique Strauss-Kahn, Shakespeare, and the Enemy in the Mirror. As she reflected on some of the recent news of the week and reminded us that

in the game of life, as Cassius said in Julius Caesar, “The fault, dear Brutus, is not in our stars — but in ourselves…” This was a frequent theme of Shakespeare’s, who put it another way in All’s Well That Ends Well, when Helena says: “Our remedies oft in ourselves do lie, which we ascribe to Heaven.”

So what the heck doe this have to do with claims? More than might appear at first glance.

Insurance companies and claims departments are quick to blame all sorts of issues when problems arise. The loss was unexpected, we didn’t know the information was available, or my favorite, it was the other guy’s fault. As Ms. Huffington went on to write

In the end, if we spent even a small percentage of the time we devote to obsessing about those we consider our rivals, competitors, and enemies on examining where our own fault lines are, it’s hard to believe we wouldn’t be more successful

For companies to be successful they must look inward and then act on what they learn.

Don’t Let History Repeat Itself

Recently I was part of a claim review that found significant issues in not only how claims were being managed, but in how policies were being issued. I provided my report and commentary about what was found. Regardless, the client chose to move forward to renew the account. It reminded me again of the time when we in claims had recommended the company get out of a particular class of business only to be told “it’s OK we doubled the premium.” Then reality sank in two years later when the loss ratios went over 220%.

Now I am not against writing business. I agree with the principal I learned from the CEO of one of my former companies that it’s not about not writing business it’s about writing the right business at the right prices and terms. Regardless, reviews done in both those cases provided valuable information that could help to improve the operation.

Claims auditing is a way to look inward and learn the faults within our ourselves. A good claims review can identify weaknesses and provide a road map to improve an operation. Regular reviews can help prevent surprise and insure the department continues to improve. Of course, the information needs to be used to improve decision making and not ignored. As has been said “those who ignore history are bound (or doomed) to repeat it.”

Learn From What You Already Know And Review Your Claims Regularly

Commentary: Claims Departments Are Facing A Crisis And Have To Learn To Encourage Innovation

Posted on January 12, 2011 by Marc Lanzkowsky

So Much Work And No Help In Sight

I hear it time and time again from colleagues all over the industry. With cutbacks many are being asked to do more with less.

This trend began several years ago as more technology was implemented into insurance companies. Gone were the support staff; why were they needed when the claims professional could do it all on their own lap-top. Gone were supporting groups like subrogation departments and litigation management assistance; why were they needed when new systems could manage it all.

More efficiency meant more time to do more work. Certainly this will translate to better results…I mean it’s supposed to right? But has it really?

I’m Not Going To Take It Anymore

The claims industry is at a crossroads and needs to change. I know you have heard this one before, but when speaking with people in the business I was reminded me of the famous scene from the movie Network where the anchorman screams out “I’m mad as hell and I’m not going to take it any more”. Check out the clip below to be reminded.

In a recent discussion that I posted on LinkedIn, I asked the question, How do you keep the claims department from become stale? (see prior posting Is your claims department becoming a bus company?). For some reason after seven months of posting I received a flurry of comments on how the industry is facing a crisis of staffing and turnover. Quoting one post on LinkedIn from John M. Beringer:

“A sad fact is the majority of adjusters rarely last for five years. That is not due to a lack of skill or commitment; it has to do with how their pending is counted, the layered management reporting; unrealistic expectations of claims management and management by edict rather than training and critical reasoning.”

While there were many wonderful responses to my question, the general feeling was that case loads have crept too high and there is a lack of emphasis on training and development. We as claims people have a knack for complaining about caseloads, however, this one is truly one that needs to be addressed. With more technology came more expectations for claims professionals to take on more administrative tasks. Departments contracted, and claim counts rose. In my opinion this resulted in an increase in indemnity and expenses (I wish I had the data to support this, but can only i have seen it the file reviews i have conducted over the past year).

In order to excel in this marketplace, claims departments will need to innovate and attract, and maintain, new talent. Unfortunately, we are not an industry that accepts change easily, and for the most part innovation, is slow and not encouraged.

Change Requires Innovation To Be Encouraged

I have quoted Serth Godin before and will continue to do so especially with pearls of wisdom like this:

“That’s not the way we do things around here

Please don’t underestimate how powerful this sentence is. When you say this to a colleague, a new hire, a student or a freelancer, you’ve established a powerful norm, one that they will be hesitant to challenge. This might be exactly what you were hoping for, but if your goal is to encourage innovation, you blew it.”

In my consulting practice (Lanzko Consulting) I am often confronted with clients that say something like “That’s not the way we do thing around here” or, more likely, “that’s how we have always done it.” Change in claims cannot happen unless the organization looks at, and breaks, the old habit of accepting the status quo. Challenging the norm has to become the new norm. Industry executives have known for years about the declining talent pool and that need for changes, yet they have taken few steps to modernize the technology, as well as the process.

Technology is a great tool, but it will never substitute the skills of a talented claims professional. Technology must be implemented into the process to assist, not hinder, claims professionals. We need to move back to a time when claims professionals can be claims professionals. We need to make the job as interesting as it can be, and not purely about automation. Without this, the profession will struggle to attract talented people to its ranks and will certainly cost companies far more in the future.

The Claims SPOT

Identifying opportunities is easier when you know how to SPOT the issues

Category Archives: Commentary