(Mantoloking, N.J. in the aftermath of Hurricane Sandy. Photo credit: Master Sgt. Mark C. Olsen, USAF.)
Years ago, Hillary Clinton very famously tried to convince us that “it takes a village” to raise a child. Politics aside, raising children is not the only thing that can benefit from the input, participation and partnership of others. Across industries modern standards and baselines are being driven up continuously by intelligent, engaged and informed consumers who believe service should be stellar, corporations should have a conscience, and responsiveness should equal retention. Unfortunately, insurance companies demonstrating exemplary claim management methods during the normal course of business can be easily derailed when catastrophe strikes. Insurers able to modernize CAT management via new technologies and partnerships will improve customer retention, reduce cycle times and reduce loss costs. A key factor in achieving these improvements will be streamlining interactions with third-party providers and scaling more effectively, using integrated analytics to support claim management.
Reduce Cycle Times and Loss Costs
Statistics from the Insurance Information Institute indicate that the majority of an insurer’s collected premium dollars go back out the door in the claim process, easily making claims one of the top three cost centers for insurance companies. it stands to reason that decreasing the length of time it takes to bring a claim to resolution would cut costs and correspondingly improve customer satisfaction. However, insurers struggle to get insights into which parts of the claim management process are taking the most time, allowing the most leakage, and costing the most money.
Integrated analytics provides needed insights into the claims process and can help facilitate faster cycle times by helping insurers know when to dispatch business partners—such as third-party adjusters—to the properties of insureds with claims in order to mitigate damage after the storm or get actual damages addressed more quickly. Making insureds whole again on an ASAP basis has a direct correlation to important key performance indicators such as customer retention. Obviously the more quickly a claim is satisfied, the lower will be the cost to the insurer.
Streamline Third-Party Provider Interactions
Baseline CAT management today includes monitoring indicators for potential CAT events and proactively reaching out in advance with preparatory advice on how to mitigate damage. Additional information insurers could proactively provide might include making policyholders aware of relationships the company has established with business partners for services and supplies that may be needed depending on the nature of the CAT event. For example, in the instance of a hurricane, a Home Depot or Lowe’s partnership could support discounts to policyholders on supplies for boarding up or protecting properties in the path of the impending storm.
Streamlining the process of communicating with such partners by negotiating partnerships in advance and enabling electronic communication (e.g., emails and texts on mobile devices), means greater ease-of-doing-business for every participant in the claim lifecycle. In fact, when partners have direct access to an insurer’s web apps in a secure way, business functions can be completed faster on the insurer’s systems or by calling the insurer’s web services in real-time via the insurer’s and the policyholder’s preferred channels.
Scale More Effectively
Scalability is most often referenced in conversations about computing power, but in fact, it is a significant factor in every conversation that takes place about evaluating and effectively deploying claim resources. During a catastrophe or natural disaster, analytic dashboards can easily show insurers which policyholders have been affected and which have not been attended to yet in terms of things like adjuster assignment, relocation services, or claim resolution. With this information, insurers can assist in getting someone out to the damaged property, thereby limiting lag time. Integrated analytics are invaluable when it comes to the mobilization of an insurer’s staff and partners, enabling the entire team to work smarter in getting those in closest proximity to the affected policyholders.
Integrated analytics may well be the most powerful claims tool in an insurer’s toolbox. Not only can analytics help identify ways to reduce cycle times and loss costs, but also introduce opportunities to streamline interactions with third-party providers as well. With the proper technology and communication channels, insurers are vastly better able to scale during times of catastrophe, meaning policyholders can experience the same high standards of customer service and will almost naturally feel good about the relationship with a selected insurer. And, in addition to achieving better retention rates, insurers can feel confident about mitigating total loss costs, thereby reducing the potential affect on loss ratio, combined ratio and overall profitability.