The insurance industry is replacing claims administration systems at an accelerating rate. Digital engagement with customers and employees has become a base expectation; insurers are responding by deploying advanced capabilities that can streamline workflow and reduce loss adjustment expenses and loss costs. Adopting modern claims systems can help insurers increase operational efficiency and accelerate full core system transformation efforts.
Need for Claims Systems Replacement
Traditional claims handling is a labor-intensive process that requires a lot of paperwork, handoffs, and relationships to manage. Maintaining older claim administration systems is expensive and increasingly challenging as employees with skills in old coding languages retire. During the pandemic, many insurers recognized the limitations of manual and paper processes that delay streamlined operations.
In addition, customer and employee expectations have changed due to new technology and experiences with other industries. A seamless digital experience is critical for the quality of claims services, which significantly impacts customer satisfaction and retention. Digital interactions, from FNOL through payment, improve transparency and cycle times for personal lines. Advanced analytics available in modern claims systems help improve payout outcomes for commercial lines. Operational excellence in claims handling, supported through technology, is a crucial competitive advantage.
Deploying Advanced Capabilities
It has become critical for insurers to deploy advanced capabilities to provide service excellence and minimize loss and operating costs. Advanced capabilities include innovative business practices and partnerships, machine learning and advanced analytics, data capabilities that leverage third-party data, digital channels, and modern core applications.
Insurers are expanding FNOL channels to leverage the audio, video, and GPS capabilities of mobile devices. IoT devices like smart homes and drones are being integrated into the claims ecosystem. Other examples of advanced capabilities include using big data and analytics for predictive fraud scoring and secure APIs to leverage third-party services.
Characteristics of Modern Solutions
Modern claims solutions often support automated claims processing and management, integrated workflow and task management, and document generation and management. Many modern systems feature improved user interfaces with functions such as navigable screens, adjuster portals, and dynamic questioning. Many modern systems can easily configure workflows, tasks, forms, etc., and integrate with InsureTechs or other service providers.
Insurers did not have many options for modern claims systems until recently. Today, there is a wide variety of claims solution providers to choose from based on insurer needs. The journey of replacing legacy systems with modern vendor solutions is complex, but methodologies and services have improved. Insurers can increase the success rate of implementing a modern claims solution by thoroughly analyzing their needs before looking into solutions and selecting vendors that align with their needs and expectations.
For an in-depth look at available claims systems and 27 vendor solutions active in the property and casualty claims space, see Novarica’s latest Market Navigator, Property/Casualty Claims Systems.
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