Saving insurers costs with efficient claims processes
Insurance firms will find that the strategic procurement of goods and services coupled with streamlined claims management processes can lead to considerable cost savings.
For insurance firms looking to streamline costs, implementing effective claims management processes can lead to significant savings. In order to do this, an in-depth analysis of how goods and services are being procured will be crucial – what are the procurement skills, processes and infrastructure currently in place?
The next question that organizations should ask themselves is, do we have robust claims handling practices and guidelines in place, and are they consistent across departments? If the answer is ‘no’, then consider engaging cross-functional teams in procurement, claims, sales and product development to look at two sets of factors – internal and external.
Internal factors include how claims processes are structured and the metrics used to reach settlements. For example, are standardized systems in place to calculate depreciation? If someone calls in and says they have lost an iPad that is two years old, can the claims handler look up the current value? Changes to the ways claims handlers interact with customers and suppliers can have a potentially huge impact on cost savings.
External factors could include whether a supplier network has been developed to carry out repairs or supply replacement goods as needed, and on financial terms that you have agreed.
As with any reforms, success will be dependent on the ability and willingness of staff to change. Claims handling staff should be coached to change the way they approach claimants, while different customer profiles should have specific claims handling referral dialogues, which apply across all claims.
Training must be provided widely, including on-the-job experience, with a customized formal training and coaching program for procurement staff. Resources for training should be made available, while Efficio consultants are skilled at supporting existing teams, cooperating in each work stream as a single multi-functional team.
To ensure that improvements continue long-term, a tracking system including key performance indicator (KPI) definitions, a benchmarking tool for realized-versus expected savings and information for staff on how to obtain the KPIs on a monthly basis will be crucial.
Many businesses within the industry will find that implementing a successful procurement transformation program along with staff training, and introducing transparency across business processes and category expenditure will all lead to significant firm-wide cost savings.