As advances in automated claims processing and data analytics capabilities approach the horizon, insurance carriers find themselves facing the prospect of needing to innovate and evolve their claims handling process. The question for many Claims executives is, “where do I start?” It is a reasonable question given the many aspects of the claims process, each providing an opportunity to affect the ultimate outcome and cost of resolving a claim. Our recommendation is to start at an obvious point –the beginning.
Begin at the beginning—FNOL
Recent market research conducted on behalf of LexisNexis Risk Solutions by AMR International found the Claims industry spends approximately 58% of its current data and analytics budget in the areas of investigation and evaluation, but only 33% in the First Notice of Loss (FNOL) and triage/assignment processes. However, over the next five years the focus will shift with as much as 44% of the budget spend occurring during initial claims processing. This just makes sense as there is clear value in having more complete and accurate information available earlier in the process as noted in an earlier blog posting by Shannon Holt, More data, earlier: The value of incorporating data and analytics in claims handling.
In any claim, there are basically three things you need to do right from the start: gather information, analyze that information and act on that information. Viewed through a FNOL lens on an auto claim, you need:
- The full name, address, date of birth and other personal information about the claimant.
- Vehicle characteristics and VIN, the plate number and relevant information regarding the owner of the vehicle, the lienholder and so forth.
- Insurance information about the at-fault party.
With a Traditional claims processing approach, an adjuster might have some of this information at hand but will have to put significant effort into gathering missing information. Often none of this information is available until a police report is received, and that can take a considerable amount of time.
Because the clock starts ticking at FNOL, this is a critical point at which to move a claim forward. However, each step required to gather information adds time to the claim. And time is money. In fact, one of our customers conducted a study about their own claim volume and discovered they could save millions of dollars per year simply by reducing the amount of time representatives spent gathering information at FNOL.
Data prefill simplifies information gathering
Data prefill technology can solve the problems inherent to claims information gathering. Our Claims Datafill solution gathers and delivers claims-related information directly into a carrier’s claims system in near real time. The solution verifies existing information and provides missing information both at FNOL and as additional information enters the system. Not only that, but the solution can begin this process based on information as simple as a license plate number.
Claims Datafill draws complex information from a variety of sources, including departments of motor vehicles, public records and proprietary data bases and integrates that information directly into a carrier’s system—automatically. And it does so in seconds.
Consider the difference it would make to your business to have all the information needed to process a claim as early as the initial assignment of the claim, and how that capability would impact your claims processing efforts downstream.
Automated police report delivery accelerates claims processing time
Access to police reports is another critical factor that impacts claims processing time and accurate data gathering. First of all, an initial decision must be made regarding the need for a report. Additionally, report formats and codes can vary greatly across agencies, adding time and complexity to integrating the information received.
Imagine if report ordering could be automated and generated based on certain criteria, and all of the disparate report data could be normalized and injected directly into your claims system, rather than arriving in image form. This data could then be used to drive specific activities based on business rules, increasing the consistency and the effectiveness of your claims process. Our Police Records solution does exactly that, through system-to-system integration.
LexisNexis is the largest provider of police reports for the insurance industry, offering immediate access to over 73 million current and historical reports—and we’re adding approximately 790,000 reports each month. Think of what you could potentially do with this data. Not only can it be utilized to drive activities relative to a particular claim, but the information is also available across your entire claims collection. You can apply additional analytics to achieve a better understanding of the nature of both the claims you’re receiving and your losses, and then identify additional capabilities or opportunities for improving business performance.
The time is now
Integrating data and analytics seamlessly into your workflow at FNOL will help you successfully progress along the claims processing spectrum toward increased automation—and eventually toward touchless claims processing. While many of the carriers we interviewed for our study recognize that automation and data analytics will be playing a significant role in claims processing in the near future, we believe the time to act is now. Tomorrow could very soon be today.
Check out the video below for a solution that can help you begin your journey.