Graham Newman, European Product Marketing Manager, FINEOS
The second full day of the conference began with a thought provoking talk from John Leonard. John is President and CEO of Maine Employers Mutual Insurance Company (MEMIC) and Chair of ACORD. His subject was: Effectively Managing Claims amidst Rising Medical Costs. Now more than ever, John said, insurers in this field need to focus on gaining control over their claims organisations. A dramatically increasing percentage of every claims dollar is being spent on medical expenses, while indemnity costs remain flat. The importance of a single claims system that can manage all components of a claim is imperative.
John took us through some statistics on the loss ratios in medical insurance, mostly in excess of 100% and how the problems with the current low returns on investment are having a significant impact on medical insurer’s profitability. There were some interesting statistics on prescription drugs and how 40% of prescription narcotics are consumed by 1% of patients. John talked of the triple threats of the megatrends of:
- Prescription drugs
- An aging workforce
- Obesity – which shows signs of approaching 86% of the population in a decade
Mike Gillett of Liberty Syndicates gave a fascinating talk on how the London Market operates and how Liberty Syndicates tackled the claims challenges of that unique market with the help of the FINEOS Claims for London Market solution. Mike talked of the peculiarities of the subscription market and the role the Leaders and Followers play in any given risk; of how claims are approved and peer reviewed, of the incredible speed with which certain £multi-million claims can be settled, sometimes in less than half a day if certain criteria are met. He spoke of the rare kinds of cover they offer – from crop loss cover to farmers in drought stricken America to contingency covering the non-appearance of pop stars at a sold-out concert.
He spoke of the importance of having a CEO who understood the value that a good claims operation brings as a key differentiator in a crowded market. Amongst the challenges that Mike defined were the issues of compliance with London Market standards and the evidence that is required, with the effect that adjusters were spending too much time in evidencing what they were doing – reporting on the claims – rather than doing the work. With FINEOS Claims each adjuster has a clearly defined profile showing which classes of business they can deal with, what experts they can engage with and so on. With effective automatic triage and segmentation each adjuster gets just the right work to do.
This means that the adjusters have more time to spend on using their considerable personal skills on claims where they can make most difference and add most value. Where a claim is straightforward and going to be paid these can be “fast-tracked”. 25% of Liberty’s claims are now fast-tracked and turned around in less than half a day.
Among the many benefits Mike singled out:
- Embedded audit capability; evidence is created by the system simply by the claims adjusters using it
- Knowing when the claims adjuster can add value and when to pass a claim to fast-track
- Third party expert management controls
- Litigation management
- Enhanced business management information
Patrick Sheridan, Insurance Associate Partner with IBM discussed findings from recent IBM global Executive Studies, sharing the perspective they gained from Insurance CEOs and CIOs. He spoke about how customers are changing in their interactions with insurers, which interaction points they are using and how these are changing. He related this to how insurers could translate this to a useful interaction strategy. He finished by talking about IBM’s findings around the most prevalent business and technology challenges.
The afternoon progressed with all of the Line of Business Breakout sessions and working groups. These were:
- Life and Disability
- Property and Casualty
- London Markets
This was the very first London Markets breakout session and Amanda Rees and Tim Crossley of FINEOS took the delegates through the journey of FINEOS Claims for London Market and through future developments. As it was the inaugural meeting of the group they were keen to impress that the future of the product was very much in the hands of the customers.
The highlight of the day was certainly the FINEOS Innovation and Excellence Awards. The FINEOS Claims Summit was honoured by the presence of Enda Kenny, the Taoiseach of Ireland. Although he is in the midst of a very busy schedule, as among other things, Ireland is gearing up to take over the presidency of the EU from January, Enda Kenny was keen to join the FINEOS Summit and present the awards.
With a personal style that reflects his gift for the common touch Enda Kenny arrived with high efficiency but a minimum of fuss and proceeded to talk knowledgably to the insurance executives and FINEOS staff alike. He then gave a half-hour, wide-ranging talk to the conference welcoming the guests from around the world, covering aspects from Irish culture to the global economy and making sure that they were all aware of the determination and resolve to move both Ireland and the EU successfully out of the current economic troubles. He was complimentary about the role that Irish companies such as FINEOS can play on the world stage and the positive contributions FINEOS has made to companies all over the insurance world.
He then presented the FINEOS Innovation and Excellence Awards, which are awarded to companies that have made outstanding contributions in areas of customer service, effectiveness – all aspects of achieving claims excellence.
These went to:
- Mutual of Omaha, collected by Dan Christel
- Liberty Syndicates, collected by Mike Gillett who had given a fascinating view of life in the London Market earlier in the day
- Friends First, collected by Lisa Feely
The last part of the day was spent back in the line of business breakout sessions.