May 31, 2014 by Joe Colby, Vice President, Claims, Swiss Re
Claims technology has fundamentally changed our work environment. Twenty years ago, I waited for Canada Post or a courier service to deliver claim documents and first claim reports. We were paper intensive with numerous manual processes and claim cheques. We then evolved to using a combination of basic computer systems to capture transactions and a fax machine for claim documents. Now, we use email, web portals, text messaging and sophisticated claims systems with electronic claim files.
Vanishing physical claims files, fax machines and administrative staff coupled with increases in productivity and cycle times (some companies purporting a 20% improvement in claim shelf life) are all tangible derivatives of evolving technology.
Back in the day, claims were written down by clerical staff following a telephone report from a policyholder or broker and given to a claims supervisor who would distribute claims based on the concept of matching skill to complexity of work and/or distribution of workload. Claims organizations have evolved their processes and implemented sophisticated systems that use business rules logic. These allow claims to be directed automatically to the appropriate claims unit or file handler for quick vendor assignment. The result? A claims process that moves forward with increased speed and efficiency.
As technology has evolved and with additional pressure on expense mitigation and customer service excellence, organizations have recognized the importance of having a rounded and instinctive claims management system.
Technology has allowed companies to provide the customer with various self-service claims solutions. Smartphone apps that allow a customer to report a claim, call a tow truck, or secure contact information for preferred vendors to assist on the spot at the time of a claim 24/7. Web portals permit customers access to limited information contained within their claim file, such as repair status updates or whether liability has been determined and a deductible waived. Some of these systems have the ability to push these updates as they occur to the policyholder.
Rental agencies and repair facilities are integrated into the process and technology with the ability to transmit updates real time to an insurer’s claims system. Vendors now document activities in a claim that used to be completed by claims staff. This reduces the frequency of inquiry calls into claims departments and the amount of times claims personnel touch a claim file.
Many companies have changed the way they assess auto and property physical damage claims. How many of us remember a field appraiser or adjuster who wrote up a paper appraisal or property building damage estimate? Now, we have estimating software that is used by both the vendor and appraiser or adjuster with that information built in and with the ability to provide insurers with robust management information.
In some cases an appraisal desktop system is in place with built-in logic and business rules that allow vendors to transmit their estimates and photos electronically to the insurer to secure quick system automated approval for the lion’s share of claims that fit within a predefined profile or monetary threshold. This results in a no touch approach to claims handling as there is no physical intervention on the part of the adjuster or appraiser in the process.
Gone are the days where the appraiser calls car dealerships to secure market value figures for a vehicle that has been totaled in an accident. Market value assessment software and the internet (e.g. Auto Trader) provide this information almost immediately.
Adjusters can now access claims information remotely and in real time. We continue to see how portable devices advance in capability. New apps are released constantly that make smartphones easier to use and more relevant for adjusters. Adjusters have the ability to secure and transmit audio, photo and video claim material along with file notes and other documents electronically from the loss site to a central claims system. Most consumers live in the same mobile world and have access to the same devices and technology.
The Internet has also impacted the way claims are handled for both the adjuster and insured. The scale of sophisticated tools and information available on-line seems almost unlimited. Adjusters have access to a broad range of internet based resources to assist in quantifying claims such as sites that validate pricing on property contents or online news articles to assist in understanding the nature of a loss which improves on productivity.
Policyholders have access to many of the same internet resources so adjusters now deal with a much more educated and tech-savvy client than was the case 20 years ago. Today’s claims professional must be prepared to respond accordingly and ensure that he or she is prepared when working with an insured on a claim.
The evolution of social networking websites provides adjusters with a method to complete activities’ checks when validating or investigating a claim. Social media sites such as Facebook and Twitter can often assist today’s adjuster with gathering information about a claimant including a photo or posts about certain activities the claimant is engaging in that conflict with the reported injuries or disability.
Canadian courts continue to consider the use and admissibility of this information in personal injury claims. An important concern for claims organizations s the development of guidelines for the use of this type of information to ensure material is being used and secured appropriately and in compliance with regulations.
Technology has had a significant impact on vendor management over the last ten years. Many organizations use bill audit software. Instead of adjusters reviewing invoices from lawyers and independent adjusters as part of their daily responsibilities, companies are using bill review software to automate the process. These systems allow claims management to measure the performance of a particular firm and to benchmark multiple firms against each other.
Some of today’s claim systems allow the front line adjuster to order police and fire occurrence reports, credit reports, VIN history reports and various other relevant search documents directly from their electronic claim file with a click of a button without having to fill out forms or pick up the phone to complete the request.
Insurance fraud has become a significant problem for the Canadian property and casualty insurance industry. As such, technology has become increasingly helpful in fraud detection and prevention. Advancements in technology have taken us from using basic red flag paper checklists when I handled claims to automated fraud analytics and scoring systems that identify claims with fraud indicators through the implementation of rules engines applied at first notice of loss.
Another area of technology that has started to emerge more recently is the use of telematics devices with usage-based insurance (UBI) programs. Vehicle telematics devices are inserted into a vehicle’s diagnostic port and used to collect and store vehicle data such as speed, breaking, time of day the vehicle is driven etc. for the purpose of rating and pricing a risk. The potential impact on claims investigations can be significant given the independent data available to assist with accident reconstruction.
Technology is also being used to attract and retain staff. Today’s adjusters who are comfortable with technology have come to expect progressive employers to keep up with advances in systems and software to enhance efficiency.
So with all the changes in technology, are claims handled more efficiently? Can adjusters handle more claims than they did 20 years ago? Have we realized reduced levels of claims indemnity and expense leakage? There have been multiple studies by insurers and consulting firms to objectively validate that advances in technology have improved the quality, consistency and productivity of claim handling.
While it is difficult to predict where technology is headed and how it will impact tomorrow’s adjusters, one thing is certain – adjusters who lack advanced skills in technology or who fail to embrace the technological changes ahead will have difficulty sustaining a lengthy career in the adjusting profession.
Joe Colby is a Vice President of Claims with Swiss Re in Toronto. Joe has extensive experience in all aspects of claims management including indemnity and expense mitigation, individual and corporate-wide claim strategy development and litigation management.