P&C Claims Automation Solution - A Competitive Advantage


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Paragon Solutions, Inc.
Mike Cloutier – Vice President Insurance Markets


ACORD Conference May 15-17, 2012

Published in: Economy & Finance, Business
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  • As the insurance industry grows more competitive, this customer decided to automate its claims management system to reduce costs, improve productivity, and enable better decision making.
  • In this example, the customer appreciated the benefits of DCP, including the online performance, data security and authenticity guarantees, cost savings gained from reducing SAN requirements, and systems replication capabilities. In addition, the customer was especially impressed by the associated low-maintenance factor.
  • Paragon is a firm focused on enterprise information management – (both the management of structured and unstructured data) to help companies streamline costs or build new revenue opportunities. Paragon delivers differentiation in the marketplace with some key advantages:Our market domain expertise focused on designing and building industry solutions. We deliver solutions that specialize in process optimization, information management and information integration. We provide accelerator assets for the solutions we deliver, which means that the time to value for the client is faster with a lower total cost of ownership.We have a commitment to delivery, represented by our delivery record, references and delivery model that offer flexible, and high value return,
  • P&C Claims Automation Solution - A Competitive Advantage

    1. 1. P&C Claims Automation Solution A Competitive Advantage Paragon Solutions, Inc. Mike Cloutier – Vice President Insurance Markets ACORD Conference May 15-17, 2012© Copyright 2012 EMC Corporation. All rights reserved. 1
    3. 3. Top Claims Investment Drivers© Copyright 2012 EMC Corporation. All rights reserved. 3
    4. 4. Challenges in Claims Processing  Costs An A.T. Kearney study found that the costs associated with reviewing and settling claims typically account for up to 65 percent of an insurer’s revenue. Claim handling costs are high because of process inefficiencies (including manual steps and re-keying) paper use, headcount for expense for all claim parties and litigation expenses  Quality Many insurers have not re-engineered their claims processes; resulting in continued process gaps, slow processes and poor customer service quality  Customer Satisfaction The insurance industry continues to score poorly in customer satisfaction surveys. In a recent survey of companies conducted by Business Week, only two insurance companies were included in the top 25 companies identified as ―The Customer Service Elite‖ by the publication. [1]  Timing Studies have also shown that customers who receive prompt claims settlements are more likely to renew with their existing carriers. [2] [1] Jena McGregor with Frederick F. Jesperson, Megan Tucker and Dean Foust, “Customer Service Champs,” Business Week, 5 March 2007 [2] The American Customer Satisfaction Index, “Scores by Industry: Property & Casualty Insurance,” 2006© Copyright 2012 EMC Corporation. All rights reserved. 4
    5. 5. Business Challenges: Claims’ Common Pain Points & Impacts Common pain points across claims are costing insurance carriers… 1. When dealing with 3rd parties…  Inability to measure performance or valueThird Party Providers  Difficulty in selecting and implementing partnerships 1 2. When managing liability…  Failure to apply consistent processes to detect fraud and 3 subrogation opportunities Claims Management Process  Sub-optimal claim handling procedures drive inconsistencies Determin2 Initiate e Invest- … 3. When processing claims… Claim igation  Inefficient staffing, processes and organization structure Coverage  Wasted effort and time in claim handling  Poor customer service permeates process 4. When dealing with other departments… 4 5 Other Financial  Competing incentives from department to department Departments Management  Poor integration between claims, underwriting, sales and agency 5. When managing financials…  Errors with bills and payments  Unenforced policy limits & deductibles Industry Impact  Consistent industry claims leakage of 8-12% of net premiums written  Limited visibility into trends as well as issues with the accuracy of information contributes to chronic industry reserve deficiencies  Loss Adjustment Expense (LAE) inefficiencies are rationalized as required for severity containment *Source: CSFB P&C Primer, Feb 2006; Claims Magazine 20070© Copyright 2012 EMC Corporation. All rights reserved. 5
    6. 6. Critical Success Factors in Claims PhysicalFNOL Coverage Triage & Medical Litigation Claim Claim Determination Assignment Investigation Damage Recovery Management Management Evaluation Resolution Repair Improve Customer Satisfaction (higher retention)  Customer driven state of mind Superior customer  Customer access (ex. website) Experience  Claim communication and facilitation  Quick claims process cycle time Reduce Operational Expenses Loss Adjustment  Focus on increased throughput and reduced overhead Expenses  Performance based on claims throughput productivity  Reduce specialization to balance loads Reduce loss costs  Indemnity payments Loss  Eliminate fraud  Reduce claim leakage© Copyright 2012 EMC Corporation. All rights reserved. 6
    7. 7. Speed to Value: Case-Based Solutions Case-based Solution Examples New Account Contracts Human Accounts Claims Customer Care Opening Management Resources Payable Management Process & Rich Single platform to rapidlyConfigurable ContentModel-driven Configurable Role-based build case-based applications Integration Reference BestConfiguration User Interface Applications Dashboards Unification Capabilities Applications Practices Solutions up to 50% faster, substantially lower cost Case Management Configuration vs. coding – less resources, complexity & risk Compliance Monitoring & Reporting Greater application agility , lower TCO Intelligent Capture Customer Communications Business Process Management Collaboration Content Management & Repository Services Documentum© Copyright 2012 EMC Corporation. All rights reserved. 7
    8. 8. Digital Claims Processing Customer ExampleBackground Insurance subsidiary of large US financial institution Large writer of property and casualty insurance for business, home, and auto 2,800 employees in offices across 32 states 1,100 employees working from home officesThe Challenge Reduce time, effort, and costs associated with documenting claims – 18 to 30 days from notification of a loss until claim data completely entered into the system Claims management system data types included: – 35mm and digital photos, voice depositions, video, claim forms, police reports, official statements, etc. Minimize impact on staff, retain data long-term, immediate data recovery© Copyright 2012 EMC Corporation. All rights reserved. 88
    9. 9. Digital Claims Processing: An ExampleThe Results • With this solution, digital images are sent via the Internet to headquarters, loaded into the EMC Documentum repository (running with an EMC Centera content addressed storage system), and then automatically linked to the virtual claim file—all within 15 minutes • $2.5 million annual savings • Reduced claims processing costs by $250,000 in postal fees alone for the documentation after a recent disaster • Speeded workflow and provided better access to information© Copyright 2012 EMC Corporation. All rights reserved. 99
    10. 10. Paragon Solutions’ Profile Paragon is an enterprise information management solutions company that helps firms leverage information assets to achieve better business results.  Market domain expertise focusing on client solutions  Solution competencies addressing process optimization, information management and information integration.  Advisory consulting and systems integration teams Corporate Facts delivering business value. • National Coverage • Global Clients  Industry-aligned accelerator assets providing rapid • NJ Headquarters time-to-value and lower total cost of ownership. • Dual-shore Development • CAGR 20+% • Privately owned, 30-year  A proven delivery track record delivering high value history and return on investment.© Copyright 2012 EMC Corporation. All rights reserved. 10
    11. 11. Contact Paragon for More Information Joe Pennino, Solutions Sales Director phone: 516.610.7024; jpennino@consultparagon.com Michael Cloutier, VP Insurance Solutions phone: 908.783.1903; mcloutier@consultparagon.com© Copyright 2012 EMC Corporation. All rights reserved. 11
    12. 12. © Copyright 2012 EMC Corporation. All rights reserved. 12