Platforms settle into a 'House of Commons': common-platform claim reporting, like other emerging technologies, including telematics and voice stress analysis, is an option that lets carriers harness modern technology to efficiently apply best practices across all their claims

Property/casualty insurance claim-reporting processes have changed dramatically over the last decade. No longer an afterthought, modern claim-reporting procedures are the result of finely tuned operations that streamline claim settlements and help ensure a pleasant policyholder experience. This focus on efficiency and service is hardly a surprise given recent surveys that reveal ease-of-reporting and speed-of-payment as two of the top-three factors in determining customer satisfaction with the claim experience.

Early on, carriers paid little attention to the claim-reporting process since claims would keep flowing in the door regardless of what reporting protocols were in place. Insureds, without specific instructions from their carriers, did whatever was easiest, which meant reporting claims to their selling agent. The agents would then forward the claims to the carrier, originally via mail and more recently via fax, resulting in a long lag between the first report and the time an adjuster began adjudication. These unnecessary delays often frustrated the policyholder and hampered the insurer's efforts to reduce costs.

The advent of direct-loss reporting forever changed that landscape.

With the popularity and expansion of direct-writing carriers in the 1990s, direct-loss reporting became the claim-reporting method of choice.

Suddenly, policyholders were no longer bound to report claims through agents and they quickly switched to direct contact with carriers, typically via a 24-hour-a-day toll-free claim-reporting number. Given that other financial institutions offered around-the-clock service as a common business practice, insurers were highly motivated to match this new level of customer service.

Independent agent-based carriers immediately recognized direct-loss reporting as a more efficient way to receive claims and distribute them to adjusters. In addition to the improved processing and shorter settlement cycles, direct contact with policyholders enabled insurers to further service customers by channeling them to preferred providers for auto body repair, rental cars, physicians and home restoration.

While direct-loss reporting offered a plethora of benefits, only those larger carriers with a high volume of claims could economically justify the in-house, around-the-clock contact center required to adequately support this type of claim reporting. In fact, many midsize and smaller carriers found 24-hour-a-day in-house services too expensive. The erratic pattern of incoming claims on nights and weekends made efficient staffing during these periods virtually impossible, with either service suffering or costs quickly getting out of hand.

To get around that, some carriers turned to overnight answering services (often, with no insurance expertise). Since these third-party contact centers lacked both insurance expertise and access to carriers' in-house systems, this shortsighted solution was inefficient. Adjusters, for example, often needed to make a follow-up call to gather the detailed claim data that wasn't collected in the first report.

THE SEARCH FOR CUSTOMIZATION

Direct-loss reporting was certainly a step in the right direction for insurance carriers looking to improve their claim-reporting procedure. But its first iteration left room for improvement regarding the customization of the experience and the consistency of the results.

Claim reporters want a claim reporting process tailored to their needs. Policyholders, risk managers and independent agents have a varied knowledge base and drastically different levels of insurance expertise. In the direct loss reporting world, any one of these users could initiate the claim process, with each one expecting the experience to accommodate their preferences such as speaking live with a claim representative, reporting a claim online or submitting a claim using a fax machine.

Carriers, on the other hand, need a claim reporting process that yields consistent results regardless of the reporting channel, time of day, or person submitting the claim. Insurers want one set of business rules in place so that their best practices apply across all claims. The challenge came in creating a claim-reporting environment that was both flexible in the eyes of the user, yet consistent from the viewpoint of the insurer.

The industry responded to the challenge by establishing an advanced claim-reporting process now known as "common-platform claim reporting."

For the innovative insurers that have supported this approach, it resulted in a customized user experience--based on the claim reporter and the method (such as fax, phone or the Internet) he or she uses to report the claim--and has yielded consistent first reports by collecting all relevant information and invoking all the appropriate services, such as the auto body shop referral, during the reporting process. And, once again, technology became a weapon to enable the latest step in this evolution.

THE COMMON PLATFORM

Technology-enabled, common platform claim-reporting solutions allow an insurance carrier to funnel all claims through a customized series of intuitive interfaces that are designed for differing users, but rely on a unified set of rules to incorporate the carrier's business logic. For example, the common-platform system may invoke a business rule that automatically directs all neck injury claims to the Cleveland office regardless of how the claim is reported.

The best common-platform claim reporting tools leverage the versatility of Web-based software to create a process that is agnostic to the "how," "who," "when" or "where."

* How the claim is reported

Whether a risk manager is inputting the claim online, whether an agent is submitting material via fax, or whether a contact center representative is collecting loss data over the phone; the same business logic applies.

* Who reports the claim

Although the same underlying rules apply for every claim submitted, the interface is customized to match the knowledge of the individual reporting the claim.

* When the claim is reported

Whether 1:00 a.m. or 1:00 p.m., claimants experience the exact same claim-reporting procedures and workflows.

* Where the claim is reported

With a Web-based platform, claims can enter a carrier's claim system via an in-house contact center, an outsourced contact center, a client's office or a policyholders living room.

In order to successfully implement common-platform claim reporting, insurers need to ensure that their claim intake system can apply complex business rules across various reporting channels.

Unfortunately, attempting to modify or extend the front end of a claim management system that was designed without loss reporting capabilities is like asking your plumber to fix your car's muffler. Although he or she might be very good, he or she likely doesn't have the skill or the training to extend their services to include auto repair.

Getting the most out of each first-report requires a highly flexible, logic-based system that can accommodate the skills and needs of the variety of users who may be reporting the claim such as trained customer services representatives, the novice claimant reporting his first collision claim via the telephone; or the expert risk manager who submits ten claims a week via the Internet.

By optimizing the claim submission process, common-platform claim reporting helps ensure that losses are reported quickly, that all required data is captured, and that preferred provider networks are utilized fully. Claimants are also delighted with the easy, customer-friendly experience.

Now that claims procedures have evolved further, claims professionals have more alternatives to enhance customer service and reduce costs. Common-platform claim reporting, like other emerging technologies, including telematics and voice stress analysis, is an option that lets carriers harness modern technology to efficiently apply best practices across all their claims.

Assessing Claim-Reporting Capabilities

* Are there excessive time lapses between the occurrence of a loss and the time an adjuster begins work on the file?

* Does an adjuster need to follow up after the initial loss report to collect a significant portion of the loss data?

* Do insureds typically use vendors other than the preferred providers such as a physician network or collision repair shops made available by the insurer?

* Is it difficult to create robust, real-time management reports on losses submitted?

* Does the loss intake procedure rely heavily on manual tasks as opposed to advanced automation capabilities such as digital telephone recordings?

* Do customers ever complain about their claim reporting experience?

If you answered yes to two or more of these questions, your claims organization can benefit from the advantages of a common-platform claim reporting process.

--Will Fulton

WILL FULTON is president of First Notice Systems Inc.

COPYRIGHT 2004 Axon Group
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