The property and casualty (P&C) insurance industry is poised for another year of transformation driven by technological advancements, shifting consumer expectations, and the latest innovations through generative AI, digital capabilities, advanced analytics, and more. Among the many facets of transformation, this new year includes how insurers think about claims management. It’s not just the best claims management software in 2024 that will change the game, it’s how claims management processes and practices are optimized to better support businesses and consumers.
In this blog, Guidewire shares key insights into claims management best practices that will support better products and solutions in the industry for the coming year and beyond.
First Things First: A Claims Management Overview
What makes up modern claims management software?
This specialized claims processing software, often referred to as a claims management system or solution, is a pivotal tool for insurance companies seeking streamlined and efficient claims processing. It is designed to facilitate end-to-end claims handling, encompassing a comprehensive suite of features, including:
-
Workflow management
-
Dashboards for real-time insights
-
Payment processing capabilities
-
The ability to seamlessly navigate the entire claims lifecycle
Claims management software enhances overall claims administration for insurance providers and supports a better customer experience.
What are current claims management challenges for P&C insurers?
P&C insurers face a myriad of challenges in claims management and claims handling, such as:
-
The prevalence of manual processes makes data processing time-consuming, expensive, and prone to errors.
-
The complexity of certain claims compounds challenges, requiring intricate assessments that may strain resources.
-
The expectations of customers have increased, meaning that delays and difficulties in claims handling can more rapidly erode trust, reduce customer satisfaction, and jeopardize retention rates.
To navigate these challenges successfully, P&C insurers need to embrace technological solutions that meet critical needs, follow key requirements in the claims process, and follow best practices.
Check out these recommendations to revolutionize the industry this year with your claims management system.
Ensure Core Features of Claims Management Software Meet Critical P&C Needs
1. Provide comprehensive claims lifecycle support.
A hallmark of the best insurance claims management software lies in its ability to comprehensively support the entire claims lifecycle. From the initial loss reporting through investigation, evaluation, and settlement, the software should offer automation and optimization at each stage. Additionally, it should cater to various lines of business, including homeowners, commercial property, general liability, personal and commercial auto, workers' compensation, and more.
2. Allow for configurability and flexibility.
Quality claims management software empowers insurers by providing configurability and flexibility. Insurers should be able to configure business rules, workflows, and user interfaces according to their specific processes and requirements. Flexibility is crucial for adapting to industry changes, regulatory updates, and evolving business strategies. The software should also facilitate integration with external services to align with emerging technology and market trends.
3. Include advanced analytics and digital capabilities.
Top-tier software incorporates advanced analytics and reporting tools to assist insurers in making informed decisions. The software should support internal processes, as well as digital capabilities for policyholders. This digital integration on both ends enhances the overall claims handling process and customer experience.
Confirm All Key Steps in the Claims Management Process Are Covered
From claim intake to final closure, the best claims management software will support business processes and workflow management capabilities that address the entire claims lifecycle. Here are a few of the most important lifecycle elements highlighted:
4. Deploy digital or wizard-based dynamic claims intake.
-
To support the initial point of contact between the policyholder and insurer at First Notice of Loss (FNOL) or First Report of Injury (FROI).
-
Crucial for gathering essential information about the incident, including date, time, location, and a brief description.
-
To provide multiple reporting channels, such as online portals, phones, or mobile apps.
5. Complete rules-based assignment(s).
-
To assign claims experts with segmentation that is based on pre-defined rules.
6. Develop data-driven claims investigation and evaluation methods.
-
To initiate upon receiving the FNOL to assess the validity and details of the claim.
-
Allows for the gathering of additional information, such as witness statements, police reports, and relevant documentation.
-
For claims adjusters to make data-driven decisions and conduct thorough investigations to determine coverage, assess liability, and estimate the claim's value.
7. Complete reserve and pay processes.
-
These processes are completed through a variety of proven methods from robust financial management to advanced payment capabilities and subrogation tracking.
8. Determine efficient claim settlement and resolution.
-
Involves determining the compensation amount for the covered loss with easily tracked details and appropriate steps taken before closure.
-
May include negotiations and litigation between the insurer, policyholder, or insurer at fault, with the eventual issuance of payment to the relevant parties.
-
Includes dynamic business rules to ensure claim closure is completed appropriately.
Incorporate Strategies to Optimize Claims Handling
Effectively managing the claims lifecycle is only a portion of making claims management strides in 2024. P&C insurers may be wondering how to improve claims handling processes if many of those mentioned are already in place. Here are some additional insights:
9. Simplify document handling.
Implementing intelligent document management systems can reduce the manual burden of sorting and organizing paperwork and disorganized digital files, improving efficiency and accuracy in document retrieval during claims investigations. By leveraging technology to categorize and index documents, insurance claims processing can be accelerated and enhanced for overall operational effectiveness.
10. Digitize claims handling.
The digital transformation of claims handling is essential for staying competitive in the insurance landscape. Embracing digital experience tools allows insurers to transition from traditional claims handling to modern digital processes, minimizing the risk of errors and expediting claim settlements. A comprehensive digitization approach enhances customer experience, reduces manual efforts, and contributes to the agility required in modern claims management.
11. Automate process integration.
Integrating automated processes is key to achieving seamless workflows. By connecting various stages of the claims lifecycle through automation, insurers can reduce turnaround times, enhance accuracy, and ensure a cohesive approach to claims management. Automation integration can encompass everything from claims intake to evaluation and settlement, offering a unified and efficient experience for both insurers and policyholders.
12. Supply digital solutions and/or online resources.
As mentioned, meeting the evolving needs of the P&C industry involves providing digital solutions and resources for customers and insurers. Offering policyholders convenience and service via mobile apps for claims reporting, virtual claims assessments, and self-service portals for real-time updates can significantly improve the customer experience. By embracing digital channels, insurers not only cater to tech-savvy consumers but also foster a more accessible and user-friendly claims management process.
13. Provide training opportunities
Investing in training opportunities for claims professionals is a strategic move to enhance their skills and adaptability. Continuous education on the latest industry trends, technological advancements, and claims handling best practices equips professionals to navigate evolving landscapes. Well-trained staff can more effectively utilize claims management software, maximizing its potential and ensuring a smoother transition into innovative and optimized claims processes.
Bonus: Your Best Practices Checklist for Claims Management Administration
Once you have all of your plans and processes in place, create and mark off a checklist like this to ensure your claims management solutions are at the top of their game this year.
Do you prioritize customer communication and transparency?
-
Provide timely updates on claim progress and clear explanations of decisions to manage policyholder expectations and reduce anxiety.
Are you using data analytics for decision-making?
-
Utilize analytics tools for insights into trends, patterns, and potential fraud to enhance efficiency and accuracy in claims management.
Are you collaborating effectively?
-
Foster collaboration between claims and other departments to prevent fraudulent claims and missed opportunities, improve risk assessment, and enhance organizational efficiency.
Have you incorporated technology integration and automation?
-
Invest in modern software supporting automation, workflows, and integration with other systems to meet policyholder demands for convenient reporting.
Are you compliant with regulatory standards?
-
Update processes regularly to align with evolving regulatory standards, staying informed about legal changes affecting claims management.