Transforming The Claims Space

Fundamentally, paying claims is what insurers do. For P&C insurers, for instance, claims typically amount to 60% 80% of costs.

The simplicity of this premise masks a great deal of complexity, of course, and insurers need to balance three desires that are often in opposition to each other: Contain payments losses – pay what’s appropriate, and only what’s appropriate; Maintain customer satisfaction – customers generally don’t have much contact with their insurers except in a claims situation, which is the “moment of truth”; Hold down the cost of claims administration.

While it’s perhaps easy enough to balance two of these, any combination often comes at the expense of the third. You can keep customers happy and administrative costs near zero by paying every claim in full; however, your loss ratio, the key performance indicator (KPI), will go through the roof.

Alternatively, you can manually process each claim, establishing with absolute certainty that you are paying only those you should: Your payment losses KPI will be superb, but you’ll have high costs and unhappy customers.

Getting the balance right has been the industry’s challenge since its inception, with two out of three the best it could do – until now.