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One fractured mess.

OK, I'll come right out and say it: Claims administration is one big, inchoate mess. No, it's worse. It's dysfunctional.

We turned a simple, clerical task into a writhing, global beast. The quest for simplicity and efficiency has instead yielded what's become the most expensive and convoluted clerical exercise on earth.

What was once a paper document stored in a filing cabinet has multiplied to include electronic copies and Web versions.

What was once kept in a basement of a U.S. insurance carrier is now kept in bits and bytes on machines in the United States and overseas, and sometimes not with the carrier at all anymore.

Where there once existed only one document in its totality, the document's available only in a half-dozen narrow slices, none with the overall picture.

How did we get here? Sure, globalization played a role. But there's also another dynamic at work: Management within the claims industry is deeply fractured.

Some managers believe outsourcing has made the industry more efficient. Others believe it's led to a decline in service. A consensus is lacking.

Theirs is a fractured bloc, and top executives have exploited that weakness to conquer claims departments, squeezing requisite ROI requirements out of them.

Even the leaders of third-party vendors, who are paid big money to manage claims on behalf of others, can't agree.

These changes don't just affect the claims industry. They exist in many industries. And in many industries, this much is also true: Service isn't what it used to be.

Cyril Tuohy

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Author:Tuohy, Cyril
Publication:Risk & Insurance
Date:Jan 1, 2007
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