How did you find Nemo?

nemoThe blizzard of ’13 hit the northeast pretty hard this past week.  Communities still reeling from Sandy now have to deal with feet of snow too.  Power outages and downed communication lines make it extremely difficult for people to contact utility providers to report problems, as well as to receive information regarding service restoration.  Many providers are turning to social networks and to text messaging to help them get the word out and to keep their customers informed.  Others are leveraging mobile apps to assist customers, allowing them to report problems and follow repair progress.  Some utility companies are doing both.  Utility companies have to provide service 24/7; but, while insurance carriers will accept claim reports outside the regular work week, their work really begins on Monday.

Like the utility companies, many insurance organizations, carriers and agents, communicate via their social network accounts and some communicate with mobile apps.  Customers may have already reported the tree limbs falling on their cars, collisions from sliding on the roads, or restaurant food spoilage when refrigeration goes out, and now they need to know when they will hear from the claims representative or damage appraiser to move things along as quickly as possible.  If the power and phone lines are still out, your smartphone becomes your only window to the world.  This is where the carriers that have embraced and leveraged smartphone technology shine, and those that are still dependent solely upon on web sites and telephone communication fall behind, and lose customers.

Thousands of customers could be trying to contact you via your phone lines, and find the never ending phone tree wildly frustrating.  When that becomes exasperating, maybe there’s a mobile app to download, but all you can do with that is pay your premium.  Next, look at Facebook for updates, but that’s just a Hall of Fame for charitable acts and follower counts, nothing on the company’s efforts to reach out to customers about the storm.  How about Twitter?  Maybe the company is broadcasting where mobile claim centers are being set up, tips on how to minimize damage, or special phone numbers that have been arranged?  What about the agent?  They may be without power and communication as well, but they may still be able to provide support taking reports and providing information for claims – if they can get it.

This is the time when the rubber meets the road for insurance, and if you can’t keep in touch with your customers and help them when they need it most, they’ll solve the problem for you – they’ll find out about the companies that do, and they won’t be your customers for much longer.  Now is a good time to rethink and update strategy for carriers who aren’t where they should be.

Does Claims BI Just Mean “Bodily Injury?”

Anyone in the insurance claims industry that works on BI is not talking about Business Intelligence. Rarely is BI ever applied in insurance claims to mean business intelligence because most carriers only use business intelligence generically to examine closure rates, expense payments, and contact rates. Business intelligence is most often used primarily to analyze data in other business units like agent performance, product profitability and policy discounts.

By properly applying business intelligence and measuring analytics in the claim handling process, carriers have the opportunity to review and grade adjusters for improvement and development of claim adjudication best practices. Monitoring and reviewing claim handling practices will ensure adjusters are performing quality investigations resulting in fair and proper claim settlements for the carrier and the insureds.

A claim is the core of why people purchase insurance products – to get reimbursed when they incur a loss. A claim becomes a personal touch point with the insured, as well as a prospective insured when third parties are involved. How many carriers have used claimants switching to them after a claim to advertise their service? Leveraging analytics to generate business intelligence on claims processes, insured retention, and claimant satisfaction, as well as measuring things like allocated loss expenses, the number of claimants with attorneys, and post closure actions, can be used more directly and efficiently to impact the success of claims handling.

Of course you may not want all of your insureds since there are those that are working to use insurance claims to make money. Properly applied analytics and techniques can detect patterns and trends in claim participation, injuries, supplemental repairs, etc. I know of one specific case where analytics found that a claimant was paid five times for a single leg amputation, and another where a doctor was treating an average of 1,600 patients per day. Business intelligence can also capture the effectiveness of independent medical exams on claim settlements, better understanding and control on reserves, back to work rates, and therapies to move claimants from total disability to partial disability.

The next logical step is moving into predictive modeling.  Properly applied claims analytics helped one western insurer realize their return on investment in a matter of months, when they could proactively augment and deploy needed field staff to respond to several catastrophic storms.

By improving best practices, identifying fraud early, and employing predictive modeling, not only will customer satisfaction be effected, but this will also trigger claims closing more quickly and at lower costs, increasing the number of claim files adjusters can handle and lowering loss ratios. In this tough economy, lowering loss ratios by even as little as 1% can have a big impact on a company’s bottom line.