Competing in a Modern Insurance Industry
The insurance industry is currently plagued with business challenges, including the introduction of new technology, customer demand, the need for core functionality improvement, and competition between players in the market. The need to maximize the claims experience is one of these challenges that, when resolved strategically, can result in competitive advantages for insurance companies.
Here are three considerations for insurance companies that are planning to maximize the claims experience by leveraging Data & Analytics to measure effectiveness and track performance:
1) Tracking KPIs & SLAs
With the myriad of business challenges facing the insurance industry in mind, it’s important for companies to track performance. This is where Key Performance Indicators (KPIs) come into play. Organizations use KPIs to track progress towards performance goals. KPIs define the efficiency of operations and play a key role in setting concrete goals, like improved customer satisfaction survey scores.
Service-Level Agreements (SLAs) involve a service provider and its customer agreeing on the level of service that will be provided. SLAs are important to measure not only because they define service with metrics, but they also outline penalties for failing to meet those metrics. By measuring performance, companies avoid the negative repercussions of missing SLAs.
How is this relevant to the insurance industry? Measuring and regularly evaluating your organization’s performance can be the key to unlocking competitive advantages and retaining customers.
We recommend focusing your attention on four insurance metrics:
- Claim Settlement Time
- Claim Error Rate
- Claims Processed per Claims Employee
- Cost per Claim
To maximize the claims experience, KPIs should measure the quality of service provided, the productivity of the insurance company’s claims employees, and the cost of the claims process.
2) Unleashing the Power of Data to Align the Claims Experience with Performance Goals
By using in-house data, insurance companies are empowered to monitor the effectiveness and quality of service delivered to their customers. Measuring specific performance goals allows you to pinpoint which processes are working and which aren’t.
For example, look at your data records and identify the average length of time it takes to settle a claim. Next, honestly evaluate the rate of claims errors. Take time to determine exactly how much each claim costs your organization. These pieces of data set a baseline.
Now you can leverage that baseline to set goals for improving those metrics. Create a performance threshold to track outcomes for your team. Identify areas of strength and weakness using actual data points, and work towards improvement. Consider using Data Visualization Tools like Tableau, PowerBI, SpotFire, and Excel to automatically display these goal-oriented metrics.
3) Understanding the Consequences of Not Measuring Performance
What are the repercussions for not hitting the SLA and KPI targets? How does tracking goals help you provide better service to customers? The fact of the matter is when service is sub-par, the customer is most negatively impacted. When the customer hurts in the short-term, the business hurts in the long-term. Failure to track late claims and errors compound into customer dissatisfaction and distrust. When you use data strategically, you can track, monitor, and consistently improve the baseline metrics that translate to stronger customer service.
To avoid the repercussions of missing the mark on customer expectations, insurance companies should incorporate data into their decision-making process. Smart data usage can ultimately decrease claim processing time, increase efficiency, and reduce operating expenses. All of these factors can enable your organization to cut costs while recouping profit margin.
Are you using data and analytics to enhance your claims experience?
Sendero has experience helping businesses leverage data and analytics to accomplish their goals. To learn more about how to empower your team with scalable, sustainable data and analytics solutions, drop a line to one of our consultants below.