This report offers our firm's point of view on the potential for claims transformation as an overall strategy to reduce costs and increase customer satisfaction and a framework for driving a successful transformation of claims operations
Insurance carriers face a number of challenges. A struggling economy is expected to soften the demand for insurance, particularly commercial lines coverage, and to drive an increase in the number of fraudulent claims. Price competition and recent collapses in the value of investments have reduced overall margins in the industry. Companies operating on multiple legacy platforms face an additional hurdle, as they strive to compete with newer carriers that have modern, integrated systems.
Claims is the key control point in managing carrier cost. An effective transformation of the core claims process has the potential to reduce loss and expenses by 5 to 12 percent, which could spell the difference between profit and loss. Leading carriers have already begun to realize the benefits of transforming their claims operations, making transformation a competitive imperative.