Last Updated on May 16, 2023
Insurance claims. In order to serve your customers well, your organization must find the right mix of personnel and technology. While striking the balance is never easy, defining KPIs can help.
Success in Claims
I worked in several claims positions in Texas for eight years before transitioning into a career in management consulting.
Claims were the formative experience in my career, and from experience, I can tell you—it’s a very challenging job to get right. The industry is incredibly fast-paced, requires the highest level of customer service in traumatic situations, and demands significant legal acumen and prudent decision-making skills as losses climb in complexity.
In my opinion, there are two foundational practices to successfully handle claims as an individual adjuster:
- A rigorous yet flexible approach — Daily workflows and tasks must be strictly disciplined in order to keep inventory levels in check, yet remain service-oriented and adaptable to meet the individual needs of policyholders and claimants.
- Attention to detail — Small errors or omissions that go unnoticed when initially handling a claim can result in significant penalties and financial exposure for insurers down the line. The most successful adjusters are those who pay the utmost attention to investigative details upfront and throughout the claims handling process.
With the overwhelming need for claims personnel to be laser-focused on investigative details and customer service, one additional key component will drive a firm’s prospect for success: a clear set of organizational KPIs.
KPIs act as the lighthouse for teams navigating the chaotic daily currents of claims. An organization that unites in pursuit of impactful KPIs can certainly produce excellent outcomes, but one that also effectively leverages digital innovations to support this strategic focus on KPIs is simply unstoppable.
An organization that unites in pursuit of impactful KPIs can certainly produce excellent outcomes, but one that also effectively leverages digital innovations to support this strategic focus on KPIs is simply unstoppable.
Digital Transformation & Claims
I was still working in the insurance industry when my company replaced our antiquated legacy claims system with a new digital platform. The potential it unleashed for improved performance was awesome. It was like learning to drive a high-powered sports car after having chugged along in an old beat-up truck for years.
The updated platform provided immediate visibility into key performance data, enabling managers to monitor results using real-time reports. The ability to track metrics across levels and lines of business provides the means to identify issues and trends, coach, and course correct around the clock providing immediate traction to improve organizational performance in a very short time. For the new technology to truly fulfill its potential, however, it was critical that leadership first lay the groundwork for success by clearly articulating straightforward and measurable KPIs, and then rallying teams around their pursuit.
The wave of core platform replacements over the past decade has enabled firms to remain competitive, automate essential processes, and create efficiencies, but the innovations and disruptions happening now are reimagining some of the fundamental assumptions that have anchored the industry for decades.
- AI seems to be a hot topic in every industry right now, and insurance is no exception. In claims specifically, we’re seeing an increase in AI text communications for light-touch items. Say you need to submit a claim for minor property damage. An AI system, like the one used at Lemonade, can fully process a claim from intake to payment in under 3 seconds. Despite this technology, there are still plenty of complex claims that require a human touch. Investing in solutions that seamlessly integrate your human and AI claims processing systems is something all insurers should implement to stay relevant.
- Leveraging robotic process automation (RPA) for fraud detection and automatic triage subrogation opportunities is another industry evolution to note. Using technology to assist in these meticulous processes can provide continued value to firms and boost the bottom line.
- With more data than ever before, we also need more data storage than ever before. Enter: cloud solutions. Migrating to cloud computing is one of the best ways to ensure that your agents–both human and AI–can access all of the information they need to effectively interface with customers.
These are just three examples of digital trends in the industry, but the broader reality is that the rapid pace of innovations and emerging digital trends are putting tremendous pressure on traditional firms to continue to transform and adapt technologically as never before. At the same time, consumers are also putting pressure on insurance firms to deliver quality in claims customer service. To achieve both of these goals, process automation has to be done well and thoughtfully incorporated into the broader customer journey ecosystem.
Commitment to KPIs
In the midst of the ongoing digital revolution, there is fortunately an unwavering constant around which you should center your digital claims strategy— the pursuit of your KPIs.
To get the most out of your claims IT investments and to guarantee a bottom-line return, you must be able to draw a straight line from technology programs and initiatives to the KPIs that drive organizational success. Metrics such as severity levels, cycle time, early injury settlements, and same-day contact percentage, are a few tangible examples.
Defining clear KPIs, communicating them to your people effectively, and prioritizing project work and operational improvement initiatives rigorously against KPI criteria can ensure that precious IT bandwidth and innovations are strategically aligned with business results. This alignment will drive the fullest value directly back to the customer, organization, and marketplace.