Surviving Amidst Claims Handling Automation
The insurance world is undergoing a revolution today, and it’s not a quiet one.
The insurance world is undergoing a revolution today, and it’s not a quiet one. Led by the need for cost-cutting thanks to a brutal economy and competitive pressures, insurance offerings supported by technology are gaining in popularity. This is most obvious with auto coverage, with various companies heavily and humorously (green lizard, anyone?) promoting their Web-based and mobile capabilities.
Their business model has proven successful. In 2011, for the first time, a majority of new buyers of auto insurance initiated their policy purchases by applying for a rate quote online, according to the J.D. Power and Associates 2011 U.S. Insurance Shopping Study.
Along with quotes come many other online functions, including the ability to report claims and view their status; manage policies; and pay bills, to name a few. Mobile applications that offer a variety of functions also are becoming more common. Online services and mobile apps aren’t exclusive to newer auto offerings; traditional insurers also offer the same or similar functionality on their websites for auto, property, and/or life insurance claims, for example.
While front-end, customer-facing technology is obvious, a revolution is beginning on the back end of the claims process, too. Driven by the same market forces that are influencing sales and service, insurers and independent adjusting companies are looking to develop highly efficient processes for handling low-value, high-volume transactional claims.
Faster handling of low-complexity claims can be accomplished via more automated, technology-assisted processes than are typical today. They require immediate policy verification and accurate and complete data to speed routing and processing, which means data integrity is paramount. Processes are automated based on standardized rules that do not require additional intervention.
With that automation comes a concurrent reduction in the amount of adjuster time that is required per claim. Let’s say that again: greater automation of claims processing means less adjuster time spent on low-complexity files.
In a world where technology-enabled transactions are becoming more common, insurance agents no doubt are thinking about how their businesses might be changing. So should claims adjusters.
The U.S. Department of Labor doesn’t have great things to say about insurance careers. It predicts that wage and salary employment in the industry will grow about three percent in the decade ending in 2018, compared to 11 percent growth projected in all industries combined. Productivity increases due to new technology is one of the main reasons why, the Department says.
That’s the bad news. The good news is that retirements will open the doors a little wider. Growth in adjuster positions is expected to be slightly greater than that for the industry as a whole. Among those retirements will be a number of high-level adjusters whose expertise will need to be replaced. Adjusters, particularly those early in their careers, should map out a strategy now for improving their skills and experience if they expect to have a long-term career in the profession. That strategy should include:
Constantly pursuing continuing education opportunities through their company, The CLM, The Institutes, and other organizations.
Further targeting continuing education to gain appropriate certifications. The Associate in Claims (AIC), Associate in Risk Management (ARM), Chartered Property Casualty Underwriter (CPCU), Property Technical Certification (PTC), and Chartered Insurance Operations Professional (CIOP) are among those that are the most helpful.
Staying informed about industry events and trends through subscribing to industry publications and participating in discussions on social media and websites such as LinkedIn and catadjuster.org. You also can use Facebook and Twitter to follow key leaders, organizations, and publication editors.
Partnering with a mentor who can pass on his or her expertise and help you develop your career.
Developing a specialty in specific types of claims or industries, particularly those that might be facing insurance-related challenges. One example is environmental exposures among contractors, which are expected to increase due to greater understanding and awareness of the impact that such operations might have on the environment.
In addition, demand will remain for skilled individuals to fill jobs related to high-volume claims handling. Project and process management; triage and assignment; escalation; and management oversight all will be required. Adjusters with experience in those areas may well find a happy home in those elements of high-volume processing.
The point is not to eliminate human skill and judgment from claims handling, but to use that expertise where it is most needed. Stewart Brand, writer, teacher, entrepreneur, and co-founder of the Global Business Network, said, “Once a new technology rolls over you, if you are not part of the steamroller, you are part of the road.” The implications of greater automation in claims handling are clear. Adjusters can participate in and adjust to the changes to their benefit—or be overtaken by them. You decide.
Jeffrey T. Bowman is president and CEO of Crawford & Company, an independent provider of claims management solutions. He also serves on the board of directors of The Institutes, the organization that develops courses and confers the CPCU designation. He can be reached at firstname.lastname@example.org.
The CLM and Claims Management magazine offers several outlets for members and fellows to connect online. Here are a few sites that will help keep you in touch with the latest happenings: