It’s tough out there, but this is still the right time to invest in technology to make your claims systems more efficient. Here’s how some companies are doing just that

Insurers have realised they must invest in their claims departments. As the recession deepens and fraud spirals, new IT tools are more useful than ever. According to software company Gartner, UK general insurers will spend 20% more on claims technology in 2009 than they did last year.

Gartner, which surveyed 40 life and general insurers across Europe in the second quarter of 2008, found the UK industry faced a highly competitive market, tough regulator, threat of the direct model and high cost of labour. All this means UK insurers need to find new ways to save money – such as claims management technology.

In Europe, projects to improve claims processes have lagged behind North America, says Kimberley Harris-Ferrante, analyst and vice-president at Gartner.

“Since customer service delivery was rated the top business problem among general insurers, they must now take a more aggressive approach and invest in re-engineering, legacy system management and technology augmentation to support mobile, adjuster and supply chain needs,” she says. If insurers don’t do this, higher claims handling costs will hit profits, says Harris-Ferrante. They also risk losing customers because of poor customer service.

The UK insurers that responded to Gartner’s survey have already started to invest in new systems, it found. Here, Insurance Times finds out where the money is being spent ...

1 Ringing the changes

  • Call-centre technology to improve customer contact.
  • 10% of UK respondents are doing it

2 Adding new capabilities for claims

  • Bringing in an entirely new claims management system.
  • 10% of UK respondents are doing it

3 Measures of success

  • Claims analytic tools measure claims performance to better understand trends, costs and so on.
  • 40% of UK respondents are doing it

4 Money, money, money

  • A major claims administration system that focuses on financial aspects of the process, such as payment and reporting.
  • 20% of UK respondents are doing it

5 Know your customers

  • New customer relationship management tools to help you find out more about your clients and improve their satisfaction levels.
  • 30% of UK respondents are doing it

6 Outsourcing

  • Paying a separate company to handle the claims operation.
  • 40% of UK respondents are doing it

7 On the lookout

  • A fraud detection tool will analyse claims data to detect fraud patterns and flag suspicious incoming claims.
  • 30% of UK respondents are doing it

8 Get connected

  • Add links so everyone in the supply chain can access the process information, make notes and review others’ comments.
  • 40% of UK respondents are doing it

9 Have a makeover

  • Insurers maintain their existing system but add web services and install different operating platforms.
  • 60% of UK respondents are doing it

10 An all-new system

  • Buy or build a new application to support claims processing.
  • 60% of UK respondents are doing it