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The Top 5 Claims Challenges for Life, Accident and Health Insurers

By Graham Newman, Product Marketing Manager

The challenges facing claims operations in disability and life are tougher now than ever.  Advances in technology have expanded the potential of customer interactions and changing consumer behaviours have resulted in a huge rise in the expectations customers, whether insureds, employers or beneficiaries, have of the service they will receive from their insurers.  Put these against a backdrop of increasing financial demands and more regulation than ever and we can see that claims departments have to work hard just to stay in the game.  It’s not all about overcoming difficulties though; those same developments in technology and the willingness of consumers to take a more active role in their relationships with service providers have given insurers the opportunity to greatly enhance the service they provide.

The claims service defines the relationship between the insurer and the insured in ways that no other interaction can. Today, claims departments have perhaps the best chance they have ever had to enhance their service, build brand value and contribute to the bottom line.

The range of challenges is wide, but our experience has led us to conclude that these five needs are both universal and central to claims operations.  Claims operations must:

  1. Deliver superior customer service
  2. Manage each claim efficiently
  3. Improve claim outcomes
  4. Continually understand and improve the operation
  5. Take advantage of new technologies
  1. Deliver superior customer service

Providing excellence in customer service that meets rapidly changing consumer demands is a growing problem.  There is a recognised lack of customer centricity in the insurance industry, particularly in the area of claims. But claim handling is the ‘shop window’ of the insurance world.  Insurers are ultimately judged by their clients by the claims service they provide and are vying with each other to provide the best customer service.  As products converge, the quality of service becomes the primary differentiator in the eyes of the consumer.

  1. Manage each claim efficiently

Businesses are constantly searching for increased efficiencies, but claims operations have to find these without compromising effectiveness.  They must maximise throughput without reducing customer service or accuracy.  There is a clear financial demand on claims departments to increase their efficiency and therefore their productivity, a need to do more with less and to keep administrative costs under tight control. There is often considerable pressure on headcount so every member of staff should be constructively and productively occupied.

  1. Improve claim outcomes

There are strong reasons why insurers should expend time and effort on improving the outcomes for their disability claimants and the claims experience for the beneficiaries in death claims.  The sooner a claimant returns to work the more likely they are to recover fully.  Return to work, or remaining in work is highly beneficial to mental and physical well-being. Reducing the duration of a disability or sickness related claim can reduce indemnity spend significantly, freeing up reserves and reducing cost.  Making the experience for beneficiaries of death claims less stressful is humane and speaks to the greater good insurers provide to society.

  1. Continually understand and improve operations

Claims operations create, calculate and store large quantities of rich and valuable information.  The challenge is how to interpret all this to improve their understanding of the claims operation and continuously improve it.  Evidence based decision making is made possible by good claims analytics, which will reduce or eliminate waste and churn and build an environment where superior customer service can thrive.

  1. Take advantage of new technologies

Keeping pace with developing technology is essential in taking advantage of the new opportunities it presents.  Many current claims, policy administration and billing systems have reached their practical limits, lacking functionality, workflow, flexibility and configurability.  The result in today’s claims operations is high levels of manual processing that inhibits flexibility and efficiency.  Consumers now want to interact on new channels – internet, SMS, mobile devices.  Insurers that fail to keep up with technological advances will see their competitiveness decline and new entrants with more advanced technologies ready to take over.

Meeting the challenges

The FINEOS Claims system is aligned with each of these challenges and will support the goal of effective claims management.  Take a look at some of our videos here to see how.