BPM and the Promise that is Insurance

  • July 7, 2011
  • Andrew

Not too long ago we were talking with an insurance company about claims processing and BPM.  Flournoy Henry, with years of experience in the Insurance business, thought he’d share a little bit of our perspective on the topic of BPM in Insurance:

When it comes to insurance, Claims Processing is the life blood of a successful insurance company, second only to policy sales. Unlike product sales or other service industries, insurance companies sell a promise; a promise that when needed, your policy will pay out. If a claim is not processed accurately in a timely manner, that promise is unfulfilled – customers lose faith in that promise and new policy sales suffer accordingly. With a growing number of insurance variations and increased regulation concerns, claims processing often becomes overly complicated and difficult for the insurance company to manage. However, with a disciplined approach to process management and greater visibility into operations, these same companies can turn a difficult situation into a competitive advantage.

When policy sales increase, claims demand follows suit. To keep up, either hire more staff or innovate; it’s just that simple. An obvious choice for innovation is automation; thereby processing more numbers with the same or fewer people. However, what should be automated? What step in the process is most valuable or time consuming? What decision points seem to change most often and require better management? Without the proper visibility into the claims process, we can’t answer these questions with any certainty. And when customers depend on your choices, and your investment dollars are at stake, certainty counts.

In addition to automation opportunities, workload distribution is often an overlooked drain on your company’s ability to execute. Many companies have higher waged Supervisors and Managers spending time dredging through spreadsheets, stacks of work, and outdated reports only to make a decision of who should work a claim. This is not only a misuse of your staff, but a costly choke point in your process. With an enlightened view of your process and real-time feedback metrics, these choke points can often be eliminated to greatly improve the performance of your overall process.

Regulatory constraints are an unavoidable and costly nuisance for almost any insurance process. With each state variation and federal release, are you spending the project budget re-writing applications to handle these revolving issues? Can your claims process adapt quickly and respond to new constraints?

With increased process visibility and performance comes control. The ability to analyze risk, understand your impact, and react quickly to a changing market and increased regulatory concerns will not only keep your policies selling; but will reduce your cost of ownership and increase your profitability.

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