Tools to Tame Claims

Information is the key to risk management. The more accurate and timely the information, the more successful the risk management strategy. The same principle applies to claims management. Better information makes it possible to deal more efficiently with current claims and to work more effectively to mitigate future losses.

Whether they operate in financial services, manufacturing, natural resources or other industries, companies face an increasingly complex landscape when it comes to claims management. Dealing with claims from one location can be challenging enough. It becomes much more difficult when it’s necessary to track and manage claims from multiple locations, in different provinces or even across national borders. Add in the differences in regulations, languages and currencies, and it can become overwhelming. Fortunately, advances in technology make the process far more manageable.

Today, technology makes it possible to take a more holistic approach by providing detailed and timely information on individual claims, an enterprise-wide view of a company’s claims experience and the ability to learn from the loss experience of the broader industry.

More Powerful Tools

To manage claims and losses more effectively, companies must have access to more detailed and timely information, and more powerful ways to analyze that data. Among the capabilities risk managers should look for in managing global claims is the ability to run reports and obtain consistent updates on a real-time or daily basis. The system should make it possible to drill down into individual claims to see detailed claims notes from an adjuster, rather than just basic information and summaries. Financial data should be available in multiple currencies. For instance, a risk manager whose company operates across North America should be able to see the figures in Canadian dollars as well as U.S. dollars.

Claims information should also be available in multiple languages, which for most Canadian companies means English and French. The system should enable the company to aggregate claims and claim information from multiple platforms and systems into one central repository. In addition, it should be Web-based, with secure encryption to protect data and enable managers to access information when and where they need it about claims individually and in the aggregate.

Real-Time Updates

In today’s world, having up-to-date information is a necessity, not a luxury. Risk managers should not have to wait days, weeks or even months between reports. Some current systems only update on a 15- or 30-day cycle. But there is no reason not to insist on real-time updates. The system feeds should include all loss information, claimant information, reserves, payments and claims notes at a minimum.

Getting detailed information about an individual claim is another important tool. As archaic as it seems, in many cases, information is still collected on paper files and later entered into a central repository system. This may include only basic information such as the claimant’s name, a very brief description of the claim and the financial data. Risk managers should have access to the full and updated claims notes as soon as they are entered into the system by the adjuster so they can better assess where a claim stands and what progress is being made toward resolution.

A Wider View

Alongside the capability to drill down on individual claims, it’s important to be able to take a wider view of the claims landscape. This means evaluating claims and losses for one or multiple locations, across provincial borders and even globally. Companies relying on multiple loss adjusting firms may find it difficult to collate data from the different firms to obtain information such as overall claims expenditures, reserves and claims volumes. In addition, the reports may be coming in at different times.

A robust risk management information system (RMIS), provided in a partnership with a third-party administrator, can help to overcome these hurdles. These systems make it easier to track and analyze individual claims. In addition, they offer the capability to analyze a company’s overall claim experience and identify patterns and trends that will help in deciding on steps to reduce claims and expenses.

The Holistic Approach

In addition to assessing claims data from within the organization, risk managers may want to compare their own experience with the broader industry to see areas where improvements can be made. For instance, a company may be experiencing a large number of slips and falls at a particular location. A third party administrator (TPA) should be able to compare the company’s experience to that of its industry clients as a whole. Such an analysis may show, for instance, that the company’s employees are getting back to work more slowly after such incidents than at its rivals. That information can help risk managers develop a program to reduce slips and falls and to get workers get back on the job more quickly.

Along with technology that makes it easier to manage claims, a company should look for a system that makes it easier to understand the costs involved. A TPA should be able to provide centralized account management as well as inclusive pricing on a per-claim basis. A company on a deductible may want to consider moving to a self-insured retention, offering the ability to save money while increasing control over claims and being able to obtain more detailed information.

Rein in Cost and Complexity

Today, companies are seeking to rein in both the cost and complexity of claims. This requires moving beyond simply managing individual claims as they arise and taking a more holistic view of the organization’s claims. Technology has a vital role to play by providing risk managers with more timely information and more powerful tools. New technology makes it possible to analyze a company’s claims, identify patterns and trends, compare them with the wider industry and highlight areas where steps can be taken to mitigate losses and control costs. Better information can help a risk manager make better decisions that will make managing claims more efficient and improve the company’s loss experience going forward.