Leveraging AI as a Decision Support Tool in Claims Processing: A Balanced Approach

Posted on August 22, 2024 by Marc Lanzkowsky

In the rapidly evolving landscape of insurance claims operations, Artificial Intelligence (AI) has emerged as a powerful ally. However, its true potential lies not in replacing human judgment, but in enhancing it. As we navigate this technological frontier, it’s crucial to develop a strategic plan for implementing AI as a decision support tool in claims processing, ensuring we maintain the critical balance between efficiency and ethical considerations.

The key to successful AI integration lies in viewing it as a sophisticated assistant rather than an autonomous decision-maker. This approach harnesses AI’s analytical power while preserving the irreplaceable human elements of empathy, complex reasoning, and ethical judgment – particularly vital when dealing with diverse claim types requiring different levels of oversight.

To effectively implement AI as a decision support tool, insurers should consider a multi-faceted plan:

AI-Powered Insights: Utilize AI to analyze vast amounts of data, providing claims adjusters with comprehensive insights, historical comparisons, and potential settlement ranges. For instance, in complex liability cases, AI can quickly analyze historical claim data, legal precedents, and policy details to offer a comprehensive overview and suggest settlement ranges.
Bias Mitigation: Implement AI systems designed to identify and flag potential biases, both in historical data and in real-time decision-making processes. This helps ensure fair and consistent outcomes across similar claims, addressing unconscious biases that human adjusters might have.
Explainable AI: Prioritize AI models that provide clear rationales for their recommendations. This transparency allows human adjusters to understand, validate, and, when necessary, override AI suggestions, fostering trust in the system.
Continuous Learning and Feedback Loops: Establish mechanisms for human decisions to refine AI models over time. This ensures the system evolves alongside changing regulations, market conditions, and industry best practices.
Customizable Thresholds: Develop systems that allow claims departments to set and adjust thresholds for AI autonomy based on their risk appetite and regulatory requirements. This flexibility ensures that human oversight can be dynamically allocated where it’s most needed.
Cross-functional Collaboration: Engage claims adjusters, data scientists, and ethicists in the development and ongoing refinement of AI decision support tools. This multidisciplinary approach helps balance technical capabilities with practical and ethical considerations.
Regular Ethics Reviews: Conduct periodic reviews of AI-assisted decisions to ensure they align with the company’s ethical standards and values. This process should involve both internal stakeholders and external ethics experts.

By thoughtfully integrating these elements, insurers can create a synergistic environment where AI amplifies human expertise rather than attempting to replace it. This approach not only enhances operational efficiency but also maintains the trust of policyholders by demonstrating a commitment to fair, ethical, and empathetic claims resolution.

It’s important to note that the level of AI support may vary across different types of insurance claims. For straightforward cases, like minor auto damage, AI can handle most of the process autonomously. However, for complex scenarios such as liability disputes or severe injuries, human expertise becomes indispensable, with AI serving primarily as a decision support tool.

Implementing AI as a decision support tool also helps mitigate potential bad faith risks. By maintaining human oversight, especially for claim denials, and ensuring transparency in AI decision-making processes, insurers can avoid the perception that claims are being unfairly handled by automated systems.

By viewing AI as a sophisticated decision support tool rather than a replacement for human judgment, insurers can significantly enhance efficiency and consistency in claims processing while maintaining the critical human element. This balanced approach not only improves operational performance but also builds trust with policyholders by demonstrating a commitment to fair, ethical claims resolution in an increasingly AI-driven industry.

3 Types Of Claims Metrics Every Department Should Be Looking At

Posted on February 12, 2016 by Marc Lanzkowsky

There is gold at the end of the rainbow!

Good news! – claims departments are now flooded with great data.

Seems like great news doesn’t it. It is great news, or can be, if you’re using the data to help improve the operations, lower cost or predict the future. However, many firms aren’t using the data they have to provide valuable information for the operation.

With the advent of more modern claim technology there has been a push to input more and more information about claims. Claims professionals are being asked to capture very specific fields of information presumably to be used by others within the organization. In addition, more sophisticated data models are combining claims data with underwriting and financial data that when used correctly can be a treasure trove of information.

With all that information available what is the best way to use the information?

At the very least data should be used to manage the operation, reveal trends, or be predictive.

Metrics to Manage the Operations

At the core, information coming out of the claims system should be used to manage the people handling files. Daily, weekly, monthly quarterly and yearly metrics around performance issues should be used to ensure claims professionals and support staff are performing at their best, responding to claims promptly and managing workloads and staffing levels. Typical metrics to manage the operation would center on matters coming and going out (i.e., open, closed, closing ratios); aging reports (i.e., throughput, time from receipt to setup, open to close); workloads (i.e., caseloads and closing ratios by adjuster); or financial in nature (i.e. reserve changes from one period over another, average reserves, total paid).

Metrics to Reveal Trends

There are trends in your data if you know where to look. Trends in loss frequency and severity, which may be caused by external factors, such as legislative, environmental and economic forces, are all developed from claims data. Trending claims data will help underwriters ensure pricing and terms are appropriate and allow problems to be addressed before they become disasters. There are numerous examples of companies that succeeded because they were able to review claims trends and adjust their business before it was too late. There are conversely many companies that failed because they did not have or use their claims data to spot deteriorating books of business in enough time to address it. Information from claims is the lifeblood of the organization and should be identified and regularly shared to help the organization make better decisions about loss reserves, risks, investments, and resources.

Captives and self-insured can benefit even more on using data to trend losses and lower costs to the bottom line. In an article in Business Insurance about how Captive Insurers Provide Owners With Key Risk Management Tools, the authors discuss how Direct TV used claims data to trend key issues that allowed them to significantly improve results in their Workers’ Comp program:

DirecTV Inc. used claims data from the past several years …to help it manage claims more aggressively for its installation crews…DirecTV used the claims data identified to implement changes to its safety programs, its training programs and its return-to-work strategy…. The claims data also showed opportunities to improve fleet risks. Over a three-year period, the safety changes resulted in a 43% reduction in calls on the Driver Alert phone line. The data also found delays in reporting claims and lengthy lost time due to worker injuries. As a result, the company implemented a formal return-to-work program, which resulted in a significant decrease in lost time, and used additional training on claims reporting to reach the point where 91% of claims now are reported within three days of an incident.

Metrics to Be Predictive

Using data is not just about spotting trends but predicating outcomes. Using predictive analytics is not about deciding claim outcomes without the involvement of skilled claims professional, but rather it is about providing a tool to assist in the process. Predictive analytics can correlate multiple aspects of data and draw conclusions in an instant that claims professionals would not be able to do without hours of analysis. Predictive analytics tools are being successfully implemented to combat fraud and streamline the claims intake process as Gen Re noted in Predictive Modeling – An Overview of Analytics in Claims Management, some other uses of uses of predictive analytics include determining:

Outlier Claims
Reserve and Settlement Values
Defense Strategy
Litigation Expense Management
Subrogation Potential

The benefits, if used correctly, are limitless when robust data sets now common in the claims world are used. More and more companies are using analytics to improve operations. In fact, according to a Towers Watson study in 2012, 63% of Chief Claims Officer’s surveyed stated they were starting to use predictive analytics in in their claim’s operations (see study).

Predictive modeling has been limited in the past because systems were not as robust and the amount of data available to run data models was limited. Times, however, have changed and most carriers should have more than their share of data that could prove invaluable. Of course data integrity must be as clean and accurate as possible for these new models to be effective. Regardless, the possibility for significantly improving claims outcomes is compelling.

How are you using data and analytics?

Claims Predictive Modeling: Using The Numbers To Improve Operations And A Change Worth Exploring

Posted on August 22, 2012 by Marc Lanzkowsky

A recent article in Claims Magazine discusses the “Human Capital Impact of Using Predictive Models.” The article, written by the presented by consultants in the Actuarial, Risk & Analytics practice of Deloitte Consulting, discuss what it means to the claims professionals and suggests methods for implementing a Claims Predictive Model.

What Is Claims Predictive Modeling?

Claims Predictive Modeling (CPM) is one of the big buzz words in the industry. After a few decades of improving claims technology systems and creating vast databases of claims information, CPM is an attempt to use that information more effectively. It is an attempt, as the article infers, to provide better information to the claims handler to let them use their skills to make better decisions, apply resources more effectively and really allow claims departments to do more with less.

As the article notes:

“Leveraged effectively at first notice of injury or loss (FNOI/L) and throughout the lifetime of the claim, advanced analytics can have an impact on various aspects of the claims lifecycle: claims assignment, special investigative unit (SIU) referral, medical case management, litigation, subrogation, escalation and, ultimately, claims settlement and outcome.

No who wouldn’t want to have a positive impact on claims settlements and outcomes?

Change Can Be Good

Claims professionals are a rightfully proud group. We have always taken on the role of analyst and investigator and understand that there are nuisances in claims that a computer can’t possibly see. We live in the world that handling claims is a science and an art that requires a combination of elements and not just data on a spreadsheet. CPM and other tools are inherently perceived as a threat to the professional as another way to diminish our skilled judgment. We point to years of decreasing staff and being asked to do more with less as evidence of the erosion of our profession. Unfortunately, as the industry continues to struggle attracting new qualified staff, there may be some truth to these perceptions that the profession is under attack.

Regardless, we are an industry that needs to embrace and welcome new technology. CPM is not a means to further refine the profession to the point of not needing a true skilled professional. The tool is designed to highlight claims with greater risks and focus the claims handler’s attention to where it is best served. While the statistics vary slightly from company to company it is fairly well understood that 10-20% of claims volume make up 70-80% of a typical companies claim dollars. Ensuring that those claims are most effectively handled quickly is one of the best ways to manage loss and expense costs. And these same data analytics will also help to manage the high volume of matters that make up the remaining matters.

The authors point to several key elements to consider when implementing a CPM program as a way to improve the process with the claims professionals:

Communication
Making CPM Champions
Buy-in from early doubters
Closed claim reviews and comparative models

These issues are excellent suggestions no matter what type of change is being implemented. The bottom line is people need to be engaged when change is being implemented. When people perceive their jobs are being threatened they get defensive so it is important to help make the transition easier by being open. Regardless, times are changing and we as claims professionals need to adopt.

How Do You Think New Modeling Metrics Will Change Claims?

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?

What Would Steve Jobs Do In A Claims Organization?

Posted on March 15, 2012 by Marc Lanzkowsky

Innovation can be learned from the master

Thank you Bill Schoeffler and Catherine Oak of the Oak & Associates Consulting firm for the idea for this article. They wrote a wonderful piece for Insurance Journal called, What Steve Jobs Would Do In Insurance, where they so aptly lay out how Mr. Jobs would change the insurance world. They pick out several ways a Steve Jobs run insurance agency would be different and innovative.

Like many, I am a huge fan of Apple products and have been for a long time. Clearly there has been a revolution in the computer industry as a result of innovation led by Steve Jobs. One thing that is most interesting about Apple is how they not only changed computing, with the iPod and iPad, but also changed the way people listen to music, access the internet and buy and use software applications. The iPod and iPad were perfect examples of thinking outside the box. (And I like thinking outside the box – Improve bottom-line outcomes on claims by thinking outside-the-box!)

As they wrote:

Steve Jobs’ primary focus was to create great products. All else was secondary. The product of an insurance agency is the service it provides to clients. The direction Steve Jobs would take would be to provide a seamless, integrated experience for the client. People have too many things to worry about and not enough time to be able to focus on their insurance needs and problem. They want to be taken care of.

Schoeffler and Oak suggest that a Steve Jobs run agency would:

Seamlessly integrate the customer experience
Capture data about client needs easily to analyze and allow products to be tailored to individual customer
Innovative at it’s core providing products clients didn’t even know they needed
Create teams would work collaboratively at all levels
Hire only the best talent passionate about providing services

Steve Jobs in Claims

So what would Steve Jobs say about our claims industry? Well, having heard about his reputation I think I will leave what he would say out of this post. Regardless, I think Mr. Jobs would see an industry with tremendous opportunities to innovate and improve the way they deliver and manage claims services.

Following the lead of Shoerffler and Oak, I would agree that Jobs would likely create a seamless way to integrate external claims information with internal business related data. Underwriting and policy information would easily flow into claims systems and be available to the customer and claims professional easily. Claims filed through a variety of input sources would simply display information needed for all those touching the claims. The claims department, management teams, outside providers, underwriters, and of course the claimants, would have easy to understand graphical representations of relevant information. Apps would help direct those particular parties to help move the claim to resolution and seamlessly provide analytics to the company in real time. And of course there would be beautifully designed hardware to deliver this integration in the sharpest possible way.

Claims teams would work collaboratively with other parts of the organization to deliver better claims products to customers and real time relevant data to assist in underwriting. Good companies understand the relationship claims has to the health of the organization way before a claim even comes into the office. Steve Jobs would ensure underwriters would understand the claims process and how policies sold end up yielding claims. He would make sure that claims people understand how the claims organization’s activities affect the financial health of the company on pricing and expense ratios.

Steve Jobs was a brilliant marketer. He seemed to know how and when a product was going to change the world reshaping whole industries (when was the last time you actually psychically bought a CD?). Claims departments could benefit from a little marketing as well. Whether to internal or external customers, claims departments can certainly do a better job of getting their “brand” out to their market place.

The reality is that a Steve Jobs led Apple and its success can be obtained in claims departments. It takes a little more focus and the ability to step outside “what’s always been done” to innovate the future.

Tell us how else do you think Steve Jobs could have changed the claims world?

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?

5 Must Haves To Consider When Implementing a New Claims System

Posted on June 21, 2011 by Marc Lanzkowsky

Technology is About the People Both Before and After Implementation

I have just returned from the Americas Claims Event held this year in New Orleans. This was a really great conferences that was well run and provided some great learning opportunities. This year was an interesting mix of speakers and vendors discussing the latest trends. It was a great place to hear some of the challenges facing the industry and how are those challenges being solved.

One of the most interesting speeches I heard was given by Paul Tuhy, Global Head of Claims for XL Insurance. Paul spoke about building effective claims systems and processes and gave some valuable suggestions on how to implement claims projects successfully. Paul began his speech by going through a bit of history surrounding claims technology from the punch card days to the paperless office. It was a great way to set up how to develop a platform that “flows” with the claims staff.

I believe strongly that claims systems should assist claim handlers in making better decisions and not necessarily be expected to make those decisions for them. In the end, the claims technology must serve claims professionals. This is what Paul Tuhy and XL have been trying to achieve with their technology offerings. Developing a new claims system can be fraught with many challenges, regardless, there are some great ways to make that process better (see Putting Puzzle Pieces Together and the Challenge of Creating a New Claims System and The Legacy Claims System Facelift – 5 Issues To Consider When Looking At New Systems).

5 Ways For a Successful Implementation

Paul Tuhy made the following suggestions to manage development:

Use the best and the brightest on the project: A new IT project for claims cannot be a dumping ground to stick poor performers. Paul suggests the process should hurt a little and that means taking some of your best claim handlers off their desks to act as the subject matter experts. These experts must be able to think strategically and have a broad perspective in order to assist in what will be a major change for much of the organization.
Consult the business: Don’t build a claims system in a silo. This is a business system and not just a claims system. Involving the underwriters and actuaries in the process will help to implement an enterprise wide solution to improve the overall business outcome and not just make claims handling easier.
Dedicated executive sponsorship: A project this large and this important needs an executive champion. There must be the ability to help move the project forward and ensure deadlines are met at an executive level or the development may stall. This will require a large time commitment, however, this commitment will be rewarded with a streamlined approach and the ability for decisions to be made effectively.
Project management: The project team must have passion to move the project forward with a tireless dedication. The team must have the same vision as the leadership to maintain the focus through a long implementation.
Scope creep: The system and suggested changes must have value. It is very easy to sit back and add a piece here and another there. Prior to making a change to the project a cost benefit analysis must be done. It is a difficult thing to measure, however, and sometimes system enhancements will begin slow and don’t show their value for several months or years. Measure those changes after the fact and see if the perceived value actually came to be.

As companies continue to invest money in new technology it is important that those investments do not end up creating more problems. Claims technology can be a great way to improve efficiencies and lower costs when done correctly. Too many times projects fail because the up-front time and investments were not made.

How do you help your IT projects succeed?

Looking Back On 2010 And Forward To 2011 In The World Of Claims

Posted on December 31, 2010 by Marc Lanzkowsky

Pop The Cork And Say Goodbye To 2010 And Look For A Brighter Future Ahead

I for one am glad 2010 is coming to a close. It’s been a tough year and just when you thought things wouldn’t get worse they did anyway. Regardless, there is much to be thankful for including joyous family events, health and happiness.

Thanks For A Great First Year

I am so very proud of, and thankful to, the readers of the Claims SPOT for making our inaugural year so successful. Since our inception in January of 2010, we have been read in all 50 states and in over 100 countries. Our over 13,000 visitors to the site have looked at nearly 24,000 pages of 81 posts over they past year. The Claims SPOT received national recognition as the featured blog for Claims Magazine and was voted one of the top insurance blogs by Lexis/Nexis. Thanks again to all who commented on our posts and helped to keep the discussion lively. We very much look forward to providing information that can truly help the world of claims in the coming year.

The year began with continued economic concerns, a poor job market and no recovery in sight. It has come to a close with a booming stock market, improved job numbers and a better outlook for 2011 (for the top ten insurance stories of 2010 check out National Underwriter’s). Looking back on the year in claims and looking ahead to the future of claims is always a fun exercise this time of year so here we go!

Staffing Crunches, Cut Backs And “The” Oil Spill

Global Recession and Staff Reductions. As with many businesses, the insurance industry was not immune to the economic crisis that began in earnest at the end of 2008 and continued so strongly in 2010. Many claims departments cut back on professional and support staff as yet another victim of the recession. The “we need to do more with less” mentality seemed to dominate the landscape leaving claim managers scrambling to keep up with the normal pressures in claims. More work for claims professionals meant relying more heavily on adjusters and attorneys to take on additional work increasing claim expense costs. Trying to improve operations and take on projects to enhance the claims department needed took a back seat to the realities of the day’s needs. All this with a looming claims staffing crisis and decreasing talent pool in the industry (McKinsey study).

Deepwater Horizon. Really not much more needs to be said about this one. The tragedy surrounding the largest oil spill in US history dominated the headlines for much of the year. As we reported in June, the impact on claims will be extensive and even to this day have yet to be fully realized. What struck me as the most concerning was the public outcry that claims were not being paid quickly enough. As big a tragedy as this was, public pressure cannot create an environment for poor claims handling. Fraud and overpayment of claims will only result in increased premiums over time and will do nothing to help the consumers and those in need of compensation. I applaud the statement made by Kenneth Feinberg, head of the government led claims fund, about paying “legitimate” claims. We in the industry must be reminded in CAT loss situations how important it is to pay those fair claims promptly, but to not just pay for the sake of paying (Leader on BP claims blames fraud for slow payouts).

Interestingly, despite no major hurricane hitting landfall this year, 2010 proved to be an active year for CAT losses worldwide (see Worldwide Insured Cat Losses Nearly Double In 2010).

Enough Of The Past, It’s Time To Look Forward

With the hope and belief that things are looking up this coming 2011 (2010 Now On Target To Be A Profitable Year For P&C Insurers), it is time for the claims industry to get back to work on improving their overall operations. Here at the Claims SPOT we are never shy about giving our two cents so here is what we feel are three key issues to be addressed in 2011:

Compliance Audits: Let’s face it – one of the reasons that the economic meltdown occurred was due to a lack of internal controls and compliance. Whether it has already happened, or is being considered, further regulation of the insurance industry is a certainty. As a result it will require further diligence on claims departments to ensure claims are being appropriately managed and reserve and settlements that are put forth are accurate reflections of losses. Having the controls in place will not be enough. While it may sound silly, it will be important to have controls over the controls. What this means is it will not be enough to just perform an audit from time to time. Guidelines as to when and how those audits are done will be necessary to demonstrate to governing bodies that procedures exist and are being followed.

Whether you are a reinsurance company reviewing Cedent’s claims, a claims department looking at best practices, an excess carrier reviewing a primary carrier’s losses or the paper behind a MGA managed program, having a proper audit program in place will be a key element going forward.

Next Generation of Claims Professionals: We hear it again and again that the industry will be in crisis if they do not begin to address talent being attracted to claims. As the industry has matured, specialization has resulted in cost savings and better claim results. The same specialization has also contributed to stagnating the profession. As the older generation of talent begins to leave claims departments, the cross-disciplined experience in claims is disappearing. This will need to be addressed if the talent needed for the next decade will be ready to handle even more complex claims.

Technology and Claims: Used correctly it can save an organization tremendous amounts of time and money, used incorrectly it will cost it more. While there is still a long way to go, and it still amazes me to learn how far behind many major claims organizations are, the use of technology in claims has been improving. Unfortunately many groups fail to grasp what these systems can do. Either they spend too much money to buy a system not designed for their organization, or they fail to adopt their process to the new technology, failure becomes inevitable.

For 2011 adopting new technology that can help claim professionals be claim professionals and not just create more work will be the imperative. Using the mountains of data contained in the modern claims system to help make better decisions, and assist the rest of the organization to benefit from the claims data, will be the wave of the future. Regardless, it will be important to know what you are, know what you need, be selective, and implement correctly to get the benefits that new technology can bring to an organization.

Of course there are more trends from the past and future. Tell us what you think the future will bring!

Quick SPOT: 6 Security Tips To Keep Portable Technology Safe For Claims

Posted on August 27, 2010 by Marc Lanzkowsky

Protect that claims data with common sense tips

If you are like me you keep everything on your laptop and cell phone. Numbers, corporate information, claims data, and even some of the dreaded non-private personal information of others. Claims data is filled with information that if lost or stolen could be detrimental to both the company and the individual. Many companies today issue corporate cell phones and blackberry devices as well as laptop computes in place of desktops. It’s a modern world and we are all expected to be connected. Partial work at home arrangements also mean this information is traveling from location to location which can increase the risk that things may be lost or stolen.

Recently I read in the Sophisticated Litigation Support Blog about 6 Security Steps To Take With Laptops, Smartphones, and Flash Drives. As they noted according to William Quick, a sole practitioner in Clayton, MO who teaches and lectures on technology topics, “Identity theft is a mushrooming problem that Congress and the states have been trying to deal with any way they can.”

6 basic steps to prevent a loss

Sophisticated Litigation support suggested these 6 steps to help lower your risks:

Be careful not to lose the device in the first place. Pay close attention to where your equipment is.
Have a written plan that details your firm’s action if a data breach should happen.
Only keep what you need. Decide what information has to be saved and then back up your data to a secure location on a regular basis.
Lock your computer when you are away.
Encrypt all devices – most statues don’t require you to inform your clients of encrypted data breach.
Invest in back-up-plan software. Some software allows you to protect your data security after the fact.

But what happens if you loose the equipment anyway?

I had a manager that no matter how hard he tried would loose something all the time. In one year I believe he lost 3 cell phones and a laptop. He actually almost lost another when he left it in the seat pocket in front of him. Loosing equipment should be avoided at all costs, but if you do loose it, the Sophisticated Litigation Support Blog notes:

If you lose your equipment and someone obtains this information, you need to alert potentially affected parties of the loss – and that’s a lot easier said than done. It may also land you in some hot legal water (at several hundred bucks an hour, there really is no other water temperature in the legal world), because 46 states have data breach laws. So there could be some liability issues that come up.

Clearly having to explain to customers and claimants how you lost their information would not be a good thing. So discuss these issues with your group and incorporate some of the security tips to avoid a problem later.

Tell us your “I lost my equipment” story

New Claims Technologies To Help Companies Drive Revenue And Differentiate Themselves

Posted on April 12, 2010 by Marc Lanzkowsky

Still Working With Files? Time To Reevaluate Your Technology

New Study By The Gartner Group Shows 10 Technologies With The Greatest Impact For The Property/ Casualty Industry To Drive Revenue

The Gartner Group, Inc., in a new report, has identified 10 technologies that they feel will have the greatest impact for the Property and Casualty industry to help differentiate themselves and drive new revenue.

“There is a long list of technologies that P&C insurers can use to improve their processes — from product development through customer service. Many of these technologies, however, provide only incremental or minor improvements, have limited or no return on investment (ROI), or do not promise to help P&C insurers radically change their business models, reduce operational costs or generate revenue,” said Kimberly Harris-Ferrante, vice president and distinguished analyst at Gartner. “With budgets challenged and with limited funding for discretionary spending, it is imperative that organizations prioritize their investments favoring those that will generate the greatest ROI and drive the most value.”

Many of the technologies suggested by Gartner can have a significant claims impact. Below I comment on 4 that I feel can have the greatest impact on claims:

Modern Policy and Claims Management Systems – Companies with modern systems, that integrate well with the rest of the organization, have enhanced workflow and business process management (BPM) capabilities. Such systems are easily adoptable as business changes occur and give the company a clear competitive advantage. As Gartner points out, “the adoption of these systems by personal and commercial P&C insurers can provide significant value, including reducing the total cost of ownership, when legacy systems are decommissioned.
Business Intelligence and Analytics – Data and analytics are a logical extension following the adoption of updated systems. Customers are demanding more information and can easily be provided what they need with newer analytic tools. Having better information will also lead to better risk decisions and pricing. In addition, as more states require specialized claim reports, these types of analytics are required to ensure compliance with ever changing data requests.
Advanced Fraud Detection Solutions – Gartner put it best on this one by saying “it is key that insurers reduce losses and leakage to retain profitability. Better control of fraud is essential in accomplishing these goals. Advanced tools analyze data (structured and unstructured) to identify fraudulent claims in real time at point of data entry. This will assist P&C insurers in reducing losses that result in driving up operational costs and may result in companies having to increase insurance premiums based on these losses”
Mobile Devices/Technologies – Any way a consumer can submit a claim promptly and easily will be an invaluable tool. The buzz word in business is mobility and it is no different with claims. With most mobile devices now containing cameras, documenting losses early in the process is easier and can assist in preventing fraud. From the adjuster side, stronger, integrated, mobile technology will greatly speed up claims processing significantly reducing costs.

Failing to adopt new technology will put companies at a competitive disadvantage. Every company should look to evaluate their current systems and offerings and create a strategic plan to keep up-to-date with software and solutions. Staying ahead of the curve is a sure way to help drive costs down and stand out from those who don’t.

Prior to going down a new technology road, I would again encourage an assessment of your claims operations. For further comments on how to manage new technology, please see my prior posts of Putting Puzzle Pieces Together and the Challenge of Creating a New Claims System, as well as With old claims systems come old claims processes – You can’t change one without the other!