Canadian Underwriter

Beyond Process Optimization

January 1, 2008   by May Gibillini

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The insurance industry as a whole has historically used process optimization to improve performance. Generally, this strategy has served it well in its effort to cut costs and improve customer satisfaction.

The typical approach has been to locate a source of high costs or customer dissatisfaction, measure the elements that contribute to the problem and then implement corrective measures such as automating, in whole or part, a formerly manual process. This type of process optimization has helped companies incrementally improve performance across many areas of operation. It has also enabled businesses to endure the demands of a competitive environment.

But for many companies, it turns into an endless cycle of process re-optimization in order to remain competitive. As competitors re-engineer processes and become more efficient, organizations are consistently forced to re-examine and update their approach in order to keep up. What has been the end result of process optimization, when discussed in the context of accident benefit (AB) claims?

Process optimization has not resulted in sufficient innovation in accident benefit (AB) business models in recent years. This has resulted in insurers struggling to squeeze every penny of cost possible out of key business processes in a seemingly endless quest for optimized processes and lower costs.


Legislative changes have created unprecedented challenges for AB claims teams in Alberta, New Brunswick and Ontario. In Ontario, no-fault limits are the highest; forward-thinking regulatory changes since 2003 that have tried to balance cost effectiveness and efficiency remain challenging. Even when claim frequencies were at their lowest, claim costs continued to rise. These costs are now being compounded by the cost of new claim growth. Such growth is driven by two factors: an increase in frequency, and an increase in non-traditional coverages such as attendant care.

The precepts of efficiency and cost-effectiveness are impeded with broader obstacles. AB claims systems are challenged by application form-driven access to benefits, resulting in form proliferation that overwhelms claims teams. Forms for both new claims and aging claims are prioritized by adjudication teams based on regulated response times.

A typical AB claim file today comprises of a multitude of decision points, created by claim forms. These key decision points impact claim timelines, costs and ultimately customer service. For example, claim forms requesting assessment and treatment are key cost drivers. Claim teams, struggling to keep up with the glut of paperwork and associated decision points, have precious little time available to engage in case management activities that are critical to achieving outcome consistency, customer satisfaction and cost control objectives. As a result, insurers are still facing critical obstacles to efficient claims management.


Response Timelines

Timelines continue to present opportunities for AB claim teams. Claim form proliferation has resulted in an increase in mail volume, creating further bottlenecks in managing response times for adjusters. The problem is two-fold. First, missed deadlines cause most forms to be ‘deemed approved’ and have compliance and cost consequences. Second, when claims teams lose the opportunity to validate information contained within the request and verify needs, this often perpetuates the longevity of the claim.

Form Validation

These key decision points carry liability when either the timeline is missed or an opportunity to validate need is lost. Further, time constraints foster “approve-or-deny” practices, affecting the quality of case management and restricting the time available to engage in validation activity.


Claim teams’ reliance on third-party opinions to validate the need for the goods and services adds further cost to the process and eats up precious time allocated to meet the regulatory time requirements. Increased expenditures in this area indicate that shifting the decision-making responsibility is a favoured method of validation. Leveraging third parties creates new challenges surrounding timing of the opinions, interpretation of the clinical findings and applying the opinions to case management overall.

Forms Tracking

Tracking multiple forms per claim is onerous in a paper-based environment. Claim teams need to see history of forms, approval periods, follow-up requirements and changes from form to form.


Visibility into the type and number of forms, the complexity of the associated impairment and goods and service requested on a form-by-form basis is not readily available. This information is contained in paper-based files presenting audit and management challenges. With trends emerging at a rapid rate, visibility into form submissions and performance would assist greatly in managing workflow to effect change and provide claims team with decision support.


Collective industry initiatives such as the central processing agency [HCAI] will bring claim forms to claim teams quicker and in an electronic format, helping to streamline data entry. However, while this is a positive step forward, the critical element of decision-making will not be supported. Organizations have worked to standardize business processes around forms-handling; while HCAI may advance these efforts, a different approach is required. Insurers now need to take the next step and look at the implementation of workflow that is specific to the abundant decision points within claims forms.

Decision support systems that analyze and manage form and case information are required to alleviate the burden on adjusters. These systems provide intelligent, rules-based analysis and workflow-surrounding forms to help remove obstacles to efficient accident benefit claims management. Consider a decision support system that provides straight-through processing on a form-by-form basis to alleviate administrative burdens on simple cases. These systems go beyond automating manual processes to facilitate new and innovative business models in AB claims.

The ultimate goal of any claim team is to deliver on customer service promises, while also providing consistent outcome decisions and managing costs. The addition of a knowledge base that helps teams capture, retain and recall experience provides not only a wealth of information and insight for management across regions and teams, but also gives adjusters invaluable support. Adjusters are able to act on complex decision points quickly and consistently, validating their decisions against historical knowledge.

The aforementioned obstacles can be overcome with decision support systems that include a knowledge base providing technology-enabled relief to decision-making in order to gain speed validating claim forms. Adding workflow to assist the claims team in making approval decisions is a key component of such systems. The time is now to embrace innovation beyond basic process optimization and create new ways for claims teams to manage accident benefit claims.

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