Joe Pendle says that by using technology to process and manage claims, insurance companies can meet regulatory standards and train staff
Since the introduction of FSA regulation, there has been some debate over exactly what the new regulations mean and what they require insurance companies to do to comply.
This is not that surprising when you consider how much the new regulations are aiming to govern. Companies are required to report on fraud under the new regulations, but as yet there is no specified method or scope to do this. Also, claims handlers in insurance organisations know they will be affected, but are largely unsure about exactly how.
The important thing for claims handling is for companies to ensure they have strong best practices in place, and that their claims handlers are well trained and proficient.
This in itself will provide the relevant audit trails to ensure compliance with the new FSA regulations. However, a proactive approach may soon become part of the regulations.
Advanced fraud-detection technology can help insurance companies show exactly what reactive and proactive steps they are taking in their fight against insurance fraud. This proactive approach can also help to dramatically reduce suspicious claims while expediting handling of meritorious claims.
A key area where some form of best practice is needed is in assessing medical reports on personal injuries.
It is important that there is a high level of objectivity in the assessment of the injuries, not just to ensure customer satisfaction but also to satisfy the FSA that the insurers' claims staff are adequately trained.
While it appears that treating customers fairly does not apply specifically to third-party claims handling, insurers can stay on top by ensuring that third-party claimants are given equitable treatment. Technology is available to help ensure this objectivity.
Cross-referencing details against built-in medical encyclopaedias and claims history databases helps to ensure that settlements are made as accurately and consistently as possible to ensure fairness for all claimants.
Technology helps to ensure consistency in the claims handling process by enabling insurers to follow an objective process in cross-referencing prior claims that involved similar injuries under similar circumstances.
Such an objective process not only helps ensure fair treatment of third parties, but also helps a company ensure that it consistently delivers best practice performance.
And cross-referencing prior claims can also be helpful in providing evidence for the FSA that staff training meets a high standard and that their claims handling process is consistent and fair.
In this way, insurance organisations can improve overall business effectiveness and ensure improved anti-fraud awareness in accordance with the FSA regulations.
The benefits of an effective best practice approach can also be identified in terms of cost and speed of resolution of claims.
Nick Burnap, Chaucer Insurance's technical claims director, comments on his organisation's experience.
"A comprehensive claims management solution has enabled Chaucer to establish a comprehensive best practice strategy for claims settlement, which has been key for the management of our personal injury claims.
"It brings enhanced accuracy and consistency to claims processing, which empowers our claims handlers with greater information to negotiate settlements effectively.
"The system has become an instrumental factor in our business strategy to reduce overall claims costs."
Visibility of claims processes can be used to fully train claims handlers in adopting best practices. Claims handlers can be trained on the whole claims-handling process, including understanding the injuries that they will be required to deal with. This in turn will enable them to handle each case with greater confidence.
An effective technology solution can be used to institute a programme of continued professional development, so as to track how individual employees have increased their skill levels and regularly assess business needs.
Once again, this proof of competence is a key area of focus under the new FSA regulations - so apart from delivering real benefits to your business, implementing training in this way will also help with compliance. IT
' Joe Pendle is the director of client services for Insurance Services Office