In SEEKING reductions in the costs of claims, insurers are now turning to web-enabled offerings to streamline the claims handling process and deliver improved customer service. Many are now pursuing the route of self-administration, whereby customers and intermediaries can check the status of claims via web interfaces.
“Self-administration can mean a few different things,” says Helen Brown, from solution sales in insurance at IBM. “In personal lines, I don't think it will be useful in terms of notification.
If you have a car accident, it is very unlikely that you will feel like pulling out a laptop or mobile phone and entering information about the accident.”
While the technology on offer can enable self-notification, the suppliers are not majoring on it, she says. The more likely scenario for web-enabled claims management is an initial notification to a call centre, followed by online status checking by the customer.
Following an accident or burglary, for example, the customer will be able to check who the repairer or replacement supplier is and how long it will take to settle the claim, deliver the goods or make the repairs.
“I think the market will see a strong shift to provide the information element from the third party, be it a repairer, physician, surgeon, solicitor or broker. This will lead to insurers delegating more authority to brokers and intermediaries.”
This B2B element of the claims process is “begging for a lot of work and investment”, says Brown – not least because of the shortcomings in existing claims systems.
Any web-based undertaking requires a great deal of systems integration, and insurers typically have dispersed legacy systems across their lines of business. Hand in glove with the push to web-enabled offerings have come end-to-end automation, or straight-through processing projects.
IBM is focusing on this area through a strategic alliance with The Innovation Group (TIG). The two companies will deliver e-business solutions they say can reduce the costs of claims management by up to 20%. Claims management can represent up to 70% of an insurer's total costs.
The two companies will jointly market and sell a range of solutions worldwide through a dedicated sales and support team.
The first of these is TIG's Innovative Claims Management, which enables proactive management of the whole claims environment. It is designed to help insurers achieve significant efficiencies in the cost management area while improving the effectiveness of the claims process.
Under the terms of the agreement, TIG will base its offerings on IBM's application framework for e-business, an open standards-based technology infrastructure that helps developers integrate internet technologies with legacy systems. Elements of the solution include DB2
Universal Database, MQ-Series messaging middleware and Websphere application server family, as well as S/390 enterprise servers and Netfinity servers. TIG is working with Royal & Sunalliance (RSA) to define the solution for use in the firm's UK personal lines business.
Peter Tillotson, head of change at RSA, says: “When you're looking to move the business forward, it's nice to find a solution that offers so much potential benefit both to customers and to RSA.”
A major feature of the system will be the ability of RSA staff to instantly deploy the full range of resources to deal with a claim. David Neave, claims director at RSA, says: “We'll be able to use it to arrange a home visit from a staff member, an appointment at a recommended vehicle repairer, order a replacement TV or video from an approved supplier or organise any of a number of similar services.”
Not only will customers be able to monitor the progress of their claim, but any of the suppliers involved will be able to instantly record when they have provided the required service.
In this way, RSA is able to take a more proactive approach to claims management.
Getting it right
Brown says the key to claims management is to offer claims handlers good decision-making tools up front. By enabling handlers to work through the processes and send claims on to the right people at the right time, claims can be settled at the first touch, she says.
“I think insurance companies now realise that a reasonable investment could have a major impact on the bottom line. Integration will bring them into a new world by linking with other systems. We're not talking about throwing stuff out – older systems are still the foundation.”
With web-enabled systems now so prevalent in the market, 2001 should prove to be a boom year for suppliers.
“In terms of what you can deliver, the market hasn't progressed hugely in a year but, in terms of realising that claims handling is an area for action now, that mindset has changed,” says Brown. “We are starting to see significant budgets for the claims space.”