How to Handle Claims Effectively

Posted on

April 20th, 2015


Many insurance companies do not have an effective claims management system,
oftentimes leading to a loss of accounts. There are four key elements that need to be included in an effective and efficient claims handling policy. These elements should be included in a productive claims management evaluation process.

Element #1: Written Agreement with Carrier and Intermediary (Broker)
It is vitally important that you maintain an excellent working relationship with your insurance carrier and broker (or third administrator – TPA.) The basis of this relationship includes a written agreement on roles, responsibilities, key performance indicators (KPIs) and communication protocol.
Element #2: Written Internal Protocols
A well-defined, written internal process for claim reporting, tracking and oversight of the claims management methods that employees are expected to follow is essential.
Element #3: Specific Metrics
Metrics and data tracking are powerful tools when assessing the effectiveness of claims management. Specific metrics need to be developed and tracking protocols implemented. Examples of helpful metrics include:

  • What is the basis for reserves?
  • What trends are affecting claims?
  • What challenges are claims managers facing and why do these challenges exist?
  • Are the certain claimants that present problems? What issues are claim managers having with these claimants?

Element #4: Support from Upper-Level Management
In order for claims management systems to be effective throughout the company, all levels of management within the company need to be involved and committed to the process. A system for regularly measuring the frequency, type and severity of claims needs to be implemented; periodic claims need to be reviewed, referenced and follow-up systems noted.
If implemented systematically, these four key elements of effective claim management will significantly reduce your TCor by reducing both claim frequency and severity and reducing handling time.