Contact person: Ruk Surendra
Email address: [email protected]
Contact number: +61404861451
Asia and ANZ
The Digital Insurer Insurance Innovation Award
Many Life insurers have struggled to successfully fulfil the following needs:
- Improved claims risk management to address deteriorating experience
−Means of addressing a shortage of skilled claims personnel
−More efficient claims processes to minimise the time taken for claimants
to receive an outcome
−Higher degree of consistency and transparency in claims assessments
−Improved communication with claimants
−Improved quality of claims data to enable portfolio level management and
to inform improvements in claims management
In response to the previous challenges, the R&D team of Munich RE in Australia has leveraged its unique expertise and vision in the claims space has developed a market first and leading proposition known as Claims ARC (Automated Risk Classification), which incorporates: a rules-based engine for the assessment of risks, comprehensive data capture (supported by analytics), and insights / claims best practice consultation.
Claims ARC achieves a more efficient, consistent and transparent claims / risk assessment, across any line of business. This results in a better experience for customers and cost saving opportunities for the insurer.
Claims ARC’s response:
−An improved customer experience
−A decrease in processing times
−An increase in process efficiencies
−Better use of skilled claims resources
−Consistency in risk assessment
−Good communication flows between the insurer and the customer
− Increased visibility over the risk portfolio through increased data capture
−Increased claims savings
Claims ARC has been piloted with an Australian Insurer from January 2016, and has already achieved benefits from a financial, business and policy holder point of view. A second pilot with a German Insurer was so successful that it has now gone in to full production with the client. A third pilot with a client in South Africa has been successfully running for over a year now and there are discussions currently being held to move in to production also.
The Claims ARC innovation is a three-pronged approach to risk management:
1) Claims Rules Engine (CRE)
Through a set of rule-based questions, individual risks are assessed on a number of parameters with the potential to extend a claim’s duration (e.g. financial, medical and co-morbidities, employment and policy terms among others). This is an unique approach. As a result, a standardised, consistent and structured risk assessment is provided, which helps claims assessors better identify complexity and manage claims. Assessors fill out the interface of the rules engine (structured with reflexive questioning), during a 10-15 minute call with the claimant at the initial notification of a claim. The timing of this customer interaction is critical.
2) Data Management and Analytics
Due to comprehensive risk assessment information collated by the CRE, quality data collection possibilities are significantly increased. Claims ARC collects extensive information on a claimant’s medical condition, occupation, duties, financial position and a number of biopsychosocial metrics, collecting more than 50 data points per individual. This data is linked to the applicant's risk assessment and provides insight into different risk and duration drivers.
3) Best Practice and Technical Consulting
Fundamental to the offering is knowledge-sharing and consulting from top-level experts in claims strategy and technical claims management. This supports risk outcomes delivered by the rules engine and helps operationalise data insights in a practical business environment.
Whilst Claims ARC offers an automated, repeatable and consistent process, other risk triaging practices employed by insurers have been manual, with dedicated resource/s assigned to allocate claims based on risk. The manual nature of such practice means the process is not standardised and hence not repeatable. Data capture is often minimal, meaning that improvement and sophistication of rules and decision pathways is not possible. Human error and subjectivity prevail as opposed to the objectivity and standardisation offered by Claims ARC.
Claims ARC Results that speak for themselves:
Indicative results from the 12 month Australian pilot show an 8% reduction in claim payments, with an average 1 month improvement in claim duration.
The Germany Pilot has shown a positive reduction average in time to decision from over 200 days to 68 days.
Once a notification is received by the insurer, the process established by Claims ARC stipulates claimants be contacted within a four hour window. During the call, the case manager is able to conduct a preliminary assessment on the claim based on the information collected and the risk outcome provided by the engine.
Low risk cases can be closed on the spot and further information requested for more complex cases based on the individual risks of the claim. By bringing this process to the point of notification, efficiencies are gained from a time, administration and customer expectation’s perspective. Claims are acted upon earlier and are managed in a consistent manner.
Feedback from the claims team, as the users of the proposition, has been extremely positive. Improvements in the efficiency of referring claimants to their rehabilitation services has been consistently highlighted. As a result, they are able to proactively manage potentially problematic claims as soon as possible, facilitating a quicker recovery and return to work.
With the Claims ARC proposition, first assessment is made at the point of notification. After the 10-15 minute call it involves, the customer has an improved understanding of where his/her claim is at and what additional information may be required in support of their case. The claims process is expedited.
Results from the pilot show that significantly more claims are closed within the first 4 months when compared to a comparable cohort of claims following the old process, indicating an improvement in the efficiency of the decision process for the customer.
The data insights that have been achieved throughout the three pilots worldwide have been significant in facilitating the identification of areas for further claims management development and support, as well as process deficiencies that are now being addressed to further maximise the benefits resulting from the use of the tool.