Does Off-the-Shelf Insurance Mean Out-of-the-Box Claims?

Colm O’Connor, Business Consultancy Practice Lead, FINEOS

For many years it has been an increasingly familiar sight to see financial products and, in particular, insurance products being advertised in the retail sector, mainly within supermarkets at the checkout counter.  This off-the-shelf buying is associated with impulse buys and the product placement is being driven by increasing demand from consumers for simple to understand and affordable insurance cover.  To quote one particularly relevant survey “over two thirds hate shopping for insurance, more than half found it too complicated to compare insurance products and almost half didn’t know if they were getting a good deal.” (UK Treasury, December 2010)

These consumer demands have led to a wave of insurance products targeted at quickly attracting the customer’s attention – often at the checkout counter.  An excellent recent example is MetLife partnering with Walmart to offer “Fast, Simple and Affordable” Life Insurance Coverage (Bloomberg 2012).  This tag line neatly summarizes exactly what consumers are often looking for – something that is easy to understand, easy to establish coverage for and easy to manage.  Another similar example is Aetna’s partnership with Costco to sell Health Insurance (Time 2012).

This targeting of retail consumers is a high volume sales strategy and demands appropriate corresponding business processes to handle the specific requirements of these products.  For example, from an underwriting perspective, pricing is agreed in advance; hence clear and unambiguous criteria need to exist to enable risk to be assessed quickly.  In essence, these are effectively ‘out-of-the-box’ pre-packaged policies.

The flip-side of this is that the volume of sales targeted is high – hence having an ‘out-of-the-box’ mechanism for handling associated claims made against these policies is a logical next step.  This requires the insurer to be able to assess eligibility criteria quickly and settle the claim as efficiently as possible.  How is this achieved for these off-the-shelf products?  I would suggest that criteria would include:

  • Provision of support for multiple claim notification channels (web, email, telephone)
  • An ability to maximise the use of the known claims and coverage data. Examples of this include,
    • Express / Straight-through processing when applicable
    • Efficient and early claim assignment to the correct person for assessment
    • Early benefit eligibility decisions
    • Claim complexity scores
    • Fraud scores
    • Provision of extensive and integrated case management features.
    • A streamlined payment processing engine.

At FINEOS, we believe that having a clear end-to-end claims management strategy incorporating all of above allowing for intelligent usage of the available claims data is central to best practice claims handling.  Our claims content for multiple lines of business executes against this vision demonstrating that ‘outside-the-box’ thinking based on business needs can provide an ‘out-of-the-box’ solution.  This approach is ideal for managing the volume claim demands potentially made against these off-the-shelf pre-priced insurance products.

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