Accelerated Claim Settlement Solutions
In this age of “instant” communication and expectations, many claim management practitioners feel the added pressure of finding solutions that often are out of their immediate control. Accelerated Claim Settlement Solutions practices allow clients to gain a wealth of technology, data and experience to alleviate headaches and help to manage the claim in a methodical and cost effective manner. The Enterprise Risk Management (ERM) practices often reduce the average expected cost of the case by 10-20%, and often 30-40% in larger cases.
When we review loss information from insurance companies, third party administration companies and self insured clients, we notice that legacy claims (those claims that are open for longer than one year, or are greater than $25,000 in reserves) are being managed in a more “casual” manner than in the past. We find at times that long diaries are being placed on the case, with only minimal support for the reserves. Normally, an attorney and their staff are the only resources helping to close a claim. As senior enterprise risk and claim managers know, this could be an extremely expensive manner to manage a claim due to increased allocated costs and damages. Additionally, the information associated with this type of management is limited to the legal process and not the strategic settlement costs.
There are many reasons for these conditions in an operational risk and claim management environment.
- The severity and complexity of legacy Casualty claims has worsened over the last few years.
- Entry level job requirements for claims staff is not as rigorous now as in the past.
- Many managers believe that claim adjusters don’t have adequate resources to deal with everything related to a claim, and their case loads are growing to levels that make effective claims handling a difficult exercise.
- Once you have become a “lost account” by moving to another carrier, there may be limited access to the loss information and, in many cases, you may have to pay significantly more for the service with another adjuster or attorney.
The Questions to Ask Yourself
Most risk and claim managers want to be proactive in identifying and solving open claims. However, inefficiencies and lack of resources limit just how much influence they can have over the process.
- Can you or your staff effectively conduct an audit of these older claim files on your own?
- Are you aware of the state changes in Workers Compensation and Liability claims compliance?
- Do you know the applicable state Auto Liability laws?
- Do you have enough time and manpower to devote to overseeing the claim handling?
- If you do conduct claim audits, what do you hope to accomplish?
- Do you have a systematic or standardized risk management process for identifying and managing claims for settlement?
- Once an audit is completed, how will all of the findings be integrated into a cohesive practice for settlement of the claims?
- Do you have technology and teams to be able to execute your Best Practice Guidelines?
The Value Equation
We have found that organizations that are employing advanced teams of people with specialty settlement solutions technology are far outpacing their peers in reducing their aggregate claims costs, and ultimately their loss and combined ratios.
For example, we are bringing a unique approach and an extensive “results-oriented” benchmarking capability with our RiskPro® data and technology to our clients. Additionally, we bring a multi-functional team of insurance specialists, claim professionals, nurses, doctors, and attorneys to the claims with the primary objective of accelerating the claim from the “status quo” to a strategic, cost-reducing objective. In our hundreds of projects, we have been able to help our clients close 60-80% of their legacy cases within 2 years, and have reduced the outstanding reserves from 20-40% from the start of the project.