Panel discussion: Catherine Stagg-Macey, Celent
Catherine Stagg-Macey, senior analyst at Celent’s London insurance practice gives an overview of the challenges that companies are facing with technology and how it can be used to help improve claims performance.
"Now is the time more than ever for collaboration with your IT department," she says. Watch the video and find out why.
For more information about Catherine Stagg-Macey’s comments please visit: Celent blog
View from the panel
Technology enabled claims is an important area for consideration for any claims manager even in these troubled times. New claims technology gives insurance companies the opportunity to revisit both their organizational structures and their staffing levels, in order to put them in better alignment with organizational priorities and skill requirements.
The deployment of a new core claims system provides an opportunity to change the form of claims information and data, how it is accessed, and the processes that depend on it. One of the most common changes is that all (or nearly all) information becomes digital as paper claim files are eliminated. Workflow is easier to manage and moves more quickly. The experience of claimants and of their agents improves. Reserving accuracy increases. And compliance improves as required forms and correspondence are automatically created and sent by the claims system.
In Celent's interactions with insurers, the use of technology in claims can result in improved performance in several ways: efficiency increases, claims leakage declines, and reserves are set more accurately and more quickly. Internal audits of closed claims files show much better quality, and claimant satisfaction climbs.
Celent estimates that an insurer that thoughtfully and consistently applies technology can achieve a substantial improvement in claims performance. Specifically a 4% to 6% reduction in pure losses, and a 10% to 12% reduction in loss adjustment expense is feasible. This represents a 4 to 5 point improvement in the combined ratio.
Looking at the industry as a whole, there is a very uneven use of modern claims technology. Future developments will reflect this split. Some insurers will have to play catch-up. Others will deepen their understanding and broaden their use of the functionality their claims systems provide. Both types of insurers will find their own variation on the theme of using fewer resources to restore claimants to their prior state quickly and fairly. Celent's research shows investment in technology this year will continue, with longer decisions cycles and more focus on the business case. Now is the time for careful, targeting investment in claims technology in your organization.
Catherine Stagg-Macey is a senior analyst at Celent's London Insurance Practice.