Insurers will always have a duty of care to reduce their operational costs in order to stay as competitive as possible in the ever-changing market place. Claims processing is certainly a large component of the total operations budget, and so any initiative that reduces the claims processing cost can only make the insurer more competitive in the market overall.

As a general rule, where a cost is saved, the service level is most likely similarly improved too. That is, most costs are also service blockages and by removing the cost item, the service blockage is removed too.

Mobile computing in insurance is the big category winner for cost savings for sure, and in many respects. Indeed, every cost saving measure discussed here has a technology aspect to it.

Here is our list of top ten ways insurers can reduce claim costs:

  1. Field personnel having quick and ready access to policy information online takes a huge burden off of the company’s call centre costs.

  2. The client benefits directly from this higher level of service as a result of field agents being online. There is less churn, greater customer retention and a higher closure rate on deals. Client acquisition costs are therefore greatly reduced.

  3. Often deals are closed on the first and only meeting, freeing up the field agent to prospect for and attend to larger numbers of potential clients more quickly and efficiently with double or triple handling of each potential client.

  4. Further related to the issue of mobile computing, there is a much lower sales-staff attrition rate, and as all business owners know, staff recruitment is a very large and real cost to the bottom-line of the business.

  5. With mobile computing in the hands of loss adjusters, more efficient claims processing leads to a lower processing cost where the file-copying, courier fees and time delays were all real costs that no longer need to be funded.

  6. And while it is not mobile computing for the field agent or loss adjuster, iPhone and ubiquitous connectivity is freely available to the insurance consumer. This makes the process of documenting and photographing (their household contents, for example) together with supporting purchase proof is a very efficient exercise. In fact the list of these cost saving apps is very long indeed. Without doubt, this software in the hands of consumers greatly reduces the insurers concerns about fraudulent claims and those issues pertaining to under-insurance and having to invoke the averaging clause in most insurance policies.

  7. By using the power of web-enabled technologies to keep customers in the loop, with automated text messaging systems built in at every stage of the claims process, and with customers being able to track their claims online, there is a continuing reduction of stress and use of call centre resources, resulting in happier clients.

  8. With the ability for claims data to enter the claims management system at the earliest possible stages in the claims processes, management have increasingly better visibility and the information they need to better allocate the business’s human and financial resources: much like an admiral manning the bridge of an air-craft carrier.

  9. By abandoning legacy computing systems, insurers are able to embrace new technology and stay at the cutting edge of new innovation. So much so, that major events and legislative changes, that may have previously been a resource drain, are easily taken into stride. The constant process of change is efficiently managed and lesser operations soon fall by the wayside.

  10. With operations running efficiently and effectively by the full suite of available technologies, the executive team is able to attend to their most vital role of studying the market place dynamics, and by using analytics and reporting capabilities of their claims management system to correctly plot the sweet-spot for insurance premiums that will sustain the business at its optimal profitability.

Without doubt, the most astute insurers keep technology developments at the forefront of cost containment, and where appropriate they are wise to outsource the delivery of solutions to the most innovative third party suppliers who specialize in the field.