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A new way to expedite claims delivery.

YEARS AGO, before the advent of Federal Express and other overnight delivery systems, sending a wire via Western Union was the quickest and surest way to convey written information to another person. However, times have changed, and in this technology-driven era replete with dozens of automated delivery system vendors and inhouse capabilities, skeptics may question what Western Union has to offer besides quaint mailgrams that harken back to a kinder and gender America.

The reply is the Elite Priority Letter Service (Elite PLS), a product of Western Union Priority Services, which is a unit of New Valley Corporation. Elite PLS stores fixed forms in a network data base located in McLean, Virginia. The service then routes the forms to one of 14 different print sites around the country where they are immediately printed and zipbagged to a serving post office.

Elite PLS' capabilities also include the ability to merge graphics such as boxes and rectangles as well as some free-form art into fixed text. In addition, the system can use up to 16 fonts per letter and print on both sides of the first and second pages. The setup process for the text, graphics and special features to be stored in the network requires up to two weeks to complete. However, once the information is stored it can be used as often as necessary to achieve standard two-day delivery.

Late last year Elite PLS' ability to print and disseminate forms was put to use in the insurance claims area, where it can be utilized by either employers or insurers. Accident reports and claims forms are key areas of potential applicability.

According to Matthew Lampell, marketing manager of insurance priority services for Western Union, the main benefit of the system is speed. "Elite can expedite the delivery of forms to a claimant by getting them to that person within two days," he says. "That, in turn, produces a warm feeling. As any benefits manager can tell you, the faster you make contact with a claimant, the less likely he or she will litigate." Before implementing Elite PLS, one client company received two to three phone calls per claimant about their claim before the forms arrived at the insureds' homes.

From an employer standpoint, Mr. Lampell adds that as the potential for subrogation of workers' compensation claims increases, it becomes vitally important to obtain quick and accurate information about an incident immediately after it occurs. "The Elite Service can quickly get that information into the hands of a risk manager so he or she can analyze the potential for subrogation,"he says. "Since most companies are experience rated, their premium rates will be helped immensely if the cost of the claim can be shifted to the potentially responsible third party."

Justifying Elite PLS

ACCORDING TO Mr. Lampe11, an insurer that currently uses Elite PLS to expedite its claims previously experienced an error rate of 40 percent when the mailings were done inhouse. "The wrong forms were attached to the letters and it took three days for the forms to leave the building," he says.

However, some insurers have found it difficult to justify using Elite PLS when they have an in-house textform merge print capability. Mr. Lampell says the in-house function primarily eliminates the voluminous amount of pre-printed insurance forms keyed to specific coverages and varying state requirements by producing the appropriate forms as needed. "It is a company-to-policyholder flow of information, and nothing about the system expedites the delivery," he says. Because Elite PLS' main strength is quick delivery, Mr. Lampell says the service can have the forms and accompanying letter "in the hands of the recipient before the in-house merge printing has left the print site."

Mr. Lampell says one of the strong points in marketing Elite PLS has been the enduring name recognition of Western Union. Even younger people, who may never have had the opportunity to send a wire, often think they have won a contest when they see a letter embossed with the Western Union logo on their desk, he says.

He adds that the only systems that approach Elite PLS in delivery capability are the overnight systems like Federal Express, and they have their own set of problems. "If you are going to mail 300 copies of a particular document, you have to prepare 300 individual envelopes and that can be a laborious chore," he says.

In addition, the expense, Mr. Lampell says, might be prohibitive. "Our product is price-banded like most others, but shooting from the hip I would say a four-page sample form probably costs $2.50 or less to send." He adds that by treating and composing text as forms, Elite PLS can eliminate up to a page and a half off documents that are mailed; the condensed material is more likely to be read and the whole costs less to produce.

Conceptual Approaches

THE FIRST conceptual approach using the priority letter idea occurred during a big promotional campaign Lincoln Continental launched last year to sell discounted cars. In response to the challenge, the Cadillac Co. sent a priority letter to potential customers that included a half-page coupon that could be redeemed for $2,000 from the dealer upon purchasing a new car. The pharmaceutical industry then took up the idea as part of a product marketing ploy using composed print in a formsstyle format.

"Both of the approaches were information going out and nothing coming back," Mr. Lampell says. "From my background in the insurance industry, I saw how we could use the concept differently to get highusage forms out quickly." Mr. Lampell adds that Western Union Priority Services did not markedly change the product itself, but they instead just changed its ultimate focus.

Elite PLS serves the dual functions of increased customer service as well as potential claims cost containment through quick contact with the insured. For instance, in the event of a motor vehicle accident, a variety of forms can quickly be sent to those involved, One set might go to the insured to confirm in writing a verbal account of the accident. A second set might instruct the company's insured on where to find a drive-in claims center for appraisal of the damages. The third set elicits a full version of the other party's account of the accident. Bar codes facilitate image scanning and eliminate the need to key in information. And a fourth set is designed to obtain valuable information from the witnesses.

Since the cost of handling a small property/loss claim often exceeds the cost of the claim itself, many companies manage the claims using only the information provided by the insured. Elite PLS allows the claims processing department to automatically generate a policyholder letter with the necessary forms the same day a claim is reported. Within several days the insured will have all the necessary instructions and materials to document the loss. Turn around time is reduced and the policy holder is satisfied.
COPYRIGHT 1992 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Elite Priority Letter Service for delivering insurance claims
Author:Johnson, Tom
Publication:Risk Management
Date:May 1, 1992
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