Life/Health Insurers Seeking Updated Functionality for Claims Systems

Property/casualty insurers may still be setting the tone within the industry for digital and self-service functionality in claims, but life/health insurers are starting to catch up. Advanced capabilities, more streamlined processes, and battling legacy systems are major priorities for life/health carriers looking to improve their claims system.

Digital channels like mobile claims inception and loss reporting, as well as paperless processes, are increasingly common at life/health carriers. Some are also looking into skills-based routing and triaged straight-through processing to improve their claims experience. Analytics and data are being used to improve loss mitigation and predictive fraud scoring in areas such as health or long-tail injury claims.

Life/health insurers are also relying on analytics-based solutions to improve claims operations in terms of fraud reduction and minimized leakage. Claims management capabilities that property/casualty carriers have deployed for workers’ compensation have lessons to offer life/health insurers. Most modern claims systems also support automation and have integrated workflow and process management, which often includes document creation and management, easy-to-use user interfaces, targeted audience portals, and dynamic questioning. A growing number of claims systems are browser-based and have a service-oriented architecture with configuration tools.

These capabilities are helping carriers of all lines of business navigate the complex issue of legacy systems. Carriers’ claims environments often consist of multiple legacy systems that have accumulated over many years. It can be hard to get a full idea of loss exposures over this broad set of systems; having so many systems in one claims environment can also mean inbound claims have to be processed by hand.

Legacy systems can also hinder a carrier’s ability to get new products to market, stay competitive, and support their aging technology. Life/health carriers have now seen insurers in other lines of business successfully break old core systems up into their functional elements. Taking a componentized approach has proven attractive to some of these life insurers as they can increase their functionality in key areas while reducing overall change needed on older platforms, minimizing external loss and fraud costs, and keeping internal costs down.

The number of vendors serving life/health claims has grown, and today’s vendors are attempting to serve an end-to-end digital claims process that can handle market forces and competitive concerns facing carriers. To learn more about the modern life/health claims marketplace and get a sense of the vendors active in this space, read Novarica’s latest Market Navigator on Life/Health Claims Systems. If you’d like to know more about Novarica’s research and advisory work with these systems, please reach out to me at [email protected].

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