Claims are an insurance companys biggest expenditure, with claims disbursements and loss-adjustment expenses combining for up to 80 percent of an insurers total revenue. Until the economy returns to a sounder and more stable level, enhancing combined ratios (also known as composite or statutory ratio) will more likely be achieved through claims processing cost reductions and efficiencies than an increase in underwriting profits.
Escalate Improved Adjuster Toolsets
Improving the effectiveness of the field adjuster with mobile technology is the fastest method that insurers are using to escalate the process. As the availability and capabilities of mobile devices rocket forward, costs associated with the devices has plummeted. Mobile devices can deliver coverage history, prior claims data, incident histories and contact information instantaneously.
The ability to access insurance policies and to augment notes directly into the core system immediately documents progress and eliminates potential duplication.
A properly equipped adjuster receives direct-to-field communication beginning with a new claim notification by an email alert. A call can immediately be made to set an appointment or an adjuster can engage GPS navigation be dispatched directly to the accident scene to take photographs and statements. As the data is collected it is served directly back to the home office claims system.
One of several estimating tools is then accessed, providing location mapping, scene diagramming using precise laser measurements along with automated damage or square footage calculators, depreciation allowance estimators and the formation of loss statements.
Fast-Track FNOL Self-Reporting
Offering customers the ability to self-report First Notice of Loss (FNOL) from their phone or other mobile device establishes a competitive differentiator during a time when customers are the most aware of loss response time and how they treated in the earliest stages.
The creation of a customer app that collects photos, key relevant claims data, GPS information and even aerial views of the accident location and then forwards them to a carrier are also gaining popularity. Not only does this speed the FNOL process, but it upgrades the correctness and timely reporting of accident information, reduces the burden on the field adjuster and enhances home office data collection.
In addition, preferred provider directories (tow services, rental car providers, body shops, etc.) can be employed to generate screen displays and automatic email of service referrals for claimants, combining customer convenience with leveraging pre-negotiated arrangements to lower costs and achieve early resolution.
Optimize Claims Recovery
Another way to reduce expenses is through claims recovery. Claims recovery opportunities including salvage and subrogation were often obscured previously by the overwhelming volume of insurance claims data on hand and the length claims resolution. The use of early warning indicators in analytics and automatic system alerts has enabled insurers to prioritize potential opportunities.
Achieving a better combined ratio in todays economic environment is more likely to occur by focusing the majority of effort on reducing incurred losses and claims loss expense than in increasing premium revenues. Some Insurers are already experiencing significant ratio improvement by leveraging new available technology to provide better adjuster mobile tools, by encouraging customer self-reporting and by increasing the use of analytics and system alerts in the optimization of claims recovery.