Achieving high performance in claims: insurers need to embrace technology as a way to reinvent their claims operations to support growth in a number of areas.

Insurers are searching for sustainable results from their claims operations that tan simultaneously support growth, service and profitability. But they face a daunting combination of high fixed costs for technology and infrastructure, more product diversity and complexity, and an aging and shrinking work force, all against a backdrop of increased regulatory scrutiny and demands for faster service.

Quite simply, insurers need to reinvent their claims operations while running them at the same time. Accenture's research indicates that high performance claims organizations excel in four key areas: claims segmentation, information access and management, human performance and organizational effectiveness.

A leading multinational insurer, for example, is transforming its claims unit into a world-class operation in a major market by reducing average claims costs, leakage and expense while increasing claims handling speed through segmenting claims by level of complexity, consolidating claims management systems, strengthening claims staff accountability and centralizing specialist operations.

* Claims Segmentation. Insurers with an explicit and highly refined "who, what, when, where and how" approach to a given claims segment tan drive consistency in their operations. For example, a claim with attorney representation involving a two-car, rear-end collision in a particular zip code resulting in neck and back strain would follow a well-defined claims handling strategy of resource assignment, investigation approach and outside party usage. More importantly, claims segmentation applies across all types of claims and drives training requirements. Therefore, a given segment of claims operates essentially as a line item on a balance sheet with highly predictable results, rather than as a random group of claims with mixed results.

* Information Access and Management. Claims organizations store mountains of valuable data, which is largely inaccessible because it sits in paper files. While scanning and imaging paper to create an electronic file is a first step, leading systems enable claims handlers to easily organize, search, analyze and share claims files with data stored in structured, searchable and discrete data fields. Systems recognize that this data will change throughout the life cycle of the claim, which may result in the need to apply another segmentation and handling strategy. This capability goes far beyond claims since high performing claims operations also share data with underwriting, marketing and product development, which affects the carrier's top and bottom lines.

* Human Performance. As the complexity of claims has increased, so too has the level of sophistication needed by claims handlers to toaster their jobs. Yet, work force training hasn't kept pace. According to out research, the average time to proficiency for a new claims handler is more than three months. Considering that it takes nearly two months to fill a vacancy, and turnover in key positions such as call center processing tops 24% annually, training is an expensive issue to ignore.

Using multiple learning delivery vehicles--classroom, online, case-based--insurers can significantly reduce the time needed to reach proficiency at the entry level. Career development also needs attention--Web-based recruiting and other technology tools can assist in attracting new claims adjusters. Having a formal succession planning process can help groom future leaders. Recently hired claims handlers must see a clear path to achieving seniority within the claims unit. Therefore, companies with a 'hire to retire' approach to personnel acquisition, retention and development have an advantage.

* Organizational Effectiveness. Leading carriers are increasingly considering creative solutions such as outsourcing certain claims functions to gain efficiencies. This is being driven by the high cost of maintaining and upgrading technology, process design and staff skills across geographies and lines of business. By using outsourcing, work volumes aren't constrained by internal resource levels. Additionally, new claims practices and processes can be more quickly deployed across the organization.

The ability of a claims operation to embrace these four capabilities is directly tied to technology. claims systems must capture detailed data throughout a claim's life cycle, as well as integrate it in order to respond with the appropriate business process. A level of infrastructure must be provided that allows the business process to extend beyond the four walls of the insurer by integrating with key players in the claims chain. Finally, the business processes and content must be within the control of the business, not within the information technology organization, to enable the degree of agility demanded in today's environment.

Contributor Michael A. Costonis is managing director of claims services for Accenture. He can be reached at [e-mail]