Opening the Lines of Communication
The relationship between agents and insurers has not always been the most harmonious, but there is no doubt that the speed and effectiveness of claims processes often depends on how well these parties work together.
The relationship between agents and insurers has not always been the most harmonious, but there is no doubt that the speed and effectiveness of claims processes often depends on how well these parties work together to move a claim through the system. One of the tools that can help accomplish successful claims processing is modern communications technology that nearly everyone can leverage.
The first step is to acknowledge the challenges with regard to claims. According to Donald Light, director, Americas Property/Casualty Practice at Celent, depending on the type of policyholder (personal lines versus small business versus mid-size business), sometimes the policyholder/claimant will send the first notice of loss (FNOL) to the agent or directly to the insurer.
“When FNOL is not made with the agent, the agent has to depend on the insurer’s willingness and ability to let the agent know about the claim and its details,” says Light. “Similarly during the adjustment process, agents may or may not have accurate and timely information about what is happening with their customer’s claim. Lack of such information will diminish the quality of the agent/customer relationship.”
“The biggest complaint has been the timeliness of claim settlement over the years,” says Bill Jenkins, an independent industry consultant. “As such, many carriers implemented FNOL via the carrier’s website. This was accompanied by the carrier accepting the loss notice directly instead of the claim being initially reported to the agent.”
Turning to technology, Jenkins adds, “Carriers have also added functionality via the Internet on status of not only claims payments but on where a repair might be from a timing perspective. Smaller claims can be reported, verified, and approved via Internet/telephone almost instantly.”
Indeed, the main problem facing agency/carrier communication with regards to claims is that it is still mostly a manual process, says Laura Drabik, a principal at Guidewire.
“Real-time, automated agent-carrier communication is inhibited by inflexible legacy claims applications that aren’t Web enabled,” she says. “Adjusters and agents are forced to manually reach out to each other to request more timely information on relevant, high-priority claims. Based upon volumes, this manual process can’t be supported for every claim, but rather only those that rise to the highest priority, leaving the agent missing relevant claim information that could help them better service their insureds on a whole, even for lower value or lower-priority claims.”
Drabik adds that lack of timely communication is often exacerbated in times of crises, such as when catastrophes strike.
“Where the agent could serve as another claims servicing body, they are often left out of the communication loop and rendered powerless without the right information to act appropriately,” she says. “Communication isn’t only about informing an agent when a claim opens and closes, but also keeping the agent apprised of updates to the claim, including assessments and financial payouts and fluctuations. Information gaps not only prevent an agent from supporting the claims process and accelerating its settlement, but also leave an agent exposed to risks.”
Karen Furtado, partner at Strategy Meets Action (SMA), says, “The fundamental issue is that agents do not want to be removed from the claims process. However, the reality is that we live in a 24/7 environment with consumers demanding real-time availability. The paramount goal is to provide the most efficient processes possible so that an insured can file a claim and be kept informed. In many cases, agents are not the key point of contact, nor are they always aware that a claim exists. This is the real issue—there just is not a strong flow of communication that keeps everyone involved updated on the status and next steps.”
On the other hand, Dip Narayan Das, head of insurance services IT architecture for ING, believes that new ways of sending data and images is improving communications between agents and carriers overall.
“Usage of Web and mobile devices to gain access to status information has forced the carriers not only to enhance their side of the process but also [to improve] on data quality and how to obtain much cleaner data upfront,” says Das. He adds that work still needs to be done on cleaning up data and decreasing the carrier’s cost of data cleanup.
Where are we seeing the impact of technological communication advances in the claims process? Das says that imaging technology, ESB/integration, and workflow are making the biggest impact.
“The scanning and indexing process has improved and we can get data out quickly and correctly if the writing is legible, reducing data entry [time and effort],” he says. Mobile imaging, he adds, is also on the rise, although challenges exist around image size, format, image quality, image cropping, and device-side versus server-side processing.
In addition, Light says an agent’s website can provide 24/7 FNOL capability with insurer-approved processes and data requirements. Insurers can also provide access to an agent’s customers’ claims status via their agent portals, and can download claim information/status into the agent’s agency management system.
According to Furtado, SMA has seen three trends in leveraging technology to improve communication.
“The first is an increase in the number of claims download transactions,” she says. “The second is the number of carrier portal sites that are starting to provide information at the claim level to their agents. The third is the number of FNOL apps that are being made available so that the claim can be filed from virtually any location. All three of these advancements are great steps forward in improving agency/carrier communication.”
Drabik says that technology can address current challenges through rules-based automation.
“Rather than rely upon an adjuster to remember to send notifications, modern systems know when to send an update and also provide the appropriate information to send in that update,” she says. “Updates can be as simple as an email, a text message, or information displayed on an agency portal. Further communication updates between the carrier and agent can also be in the form of electronic reports, dashboards, or even as intelligent claim or customer metrics made even more powerful when combined with policy inputs.”
So how can agency/carrier communication improve in the future to speed claims processes and enhance bottom lines? “Insurers can enable agent portals with claims reporting and claims status viewing functionalities and provide claim data downloads into agency management systems,” says Light. He also suggests that insurers analyze loss data on an agent’s book of business to promote better risk selection and underwriting practices.
Das recommends a sharper focus on data quality; adhering to a standardized integration data format; utilizing various integration channels; understanding and effectively using imaging technology advancement; and using Web and mobile technology to update real-time or near real-time status.
Drabik points to a need for “smart analysis and timely distribution of claims data exposed to an agent via dashboards and portals. This allows them to concentrate on selling to the right customers for profitable growth.”
“The focus needs to be centered on sharing more information about the status of claims,” Furtado says. “The more information and the more frequently it is pushed out to the agent and to the insured, the better informed all parties will be, and this creates a higher level of satisfaction for all.”