Our objective is to be a valued partner of local insurers, supporting their claims management by providing strategic services that allow Insurance Claim Departments to focus their energies on critical claim services, rather than trying to do more with less.
HYPOTHETICAL CASE STUDY – A SHIFT IN THINKING
Rachel is a Claim Manager for a large Australian insurer. At the moment she feels a little like she is under siege. She is facing two problems:
- A large increase in claim numbers due to the deteriorating economic conditions
- A staff freeze as the company has switched to cost containment mode as loss ratios rise and investment returns dwindle
Can she ask her already stretched staff to do more with less?
Are there any other options? Rachel has considered asking her law firms and adjusters to do more, but she is worried this will increase the cost of claims significantly and reduce the initiative of her staff to properly manage claims.
One option open to Rachel is to outsource a portfolio or section of the claims “overflow”, so as to smooth the volume for existing staff.
This can be a beneficial exercise in several ways:
- In deciding what claims to outsource Rachel needs to consider what portfolios of claims are most important to the company and so determine which claims should be the current focus of her claim staff
- Lower priority runoff and overflow claims can be diverted so existing staff are not overburdened
- The portfolios that are outsourced can be the subject of targets and KPIs, so receive some real management focus, even if they are being claim managed externally
- The costs of managing the claim can be allocated to the individual claims which means the operating expense ratio is not impacted
It is nice to be able to outsource claims in an orderly and organised fashion. The reality is the majority of outsourcing is done when the claims department is bursting at the seams or following a disaster that creates a wave of claims. It is possible to incorporate outsourcing claims into your claims management strategies so service standards can be maintained over the course of time. Next time a calamity hits or your claim department is cracking under the weight of claims, shift your thinking to include outsourcing claims as a potential source of assistance.
Case study - why outsource?
- Property overflow or runoff
A severe storm created havoc at a Jamboree, causing hundreds of thousands of dollars damage and hundreds of relatively small claims for damages to tents and supplies. As soon as the damage was apparent it was equally clear that there were no available resources to manage the claims effectively. Proclaim was appointed, quickly establishing a process including a hotline and claim form and preferred repairer and supplier. The claims were managed quickly and cost effectively. APRA compliant reports were available on-line so progress could be easily tracked.
- Queensland Liability Claims
The Personal Injuries Proceedings Act (“PIPA”) process is not litigation but many insurers default to appointing law firms from the outset of a PIPA claim. An insurer who was outsourcing the entire process to lawyers was becoming concerned about the escalating costs. Proclaim demonstrated that we have many clients for whom we manage the larger majority of PIPA claims without resort to lawyers. The consequent cost savings on claims that make conference was more than $10,000 per claim. Our claims staff are experienced and get great results at a fraction of the cost of legal representation.
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- Professional Liability
An insurer faced a calamity of sorts in that one of their clients (a Superannuation Fund) had sent thousands of members incorrect statements of benefits. To the extent members had acted on the information (and many had) the Insurer was facing a potential class action - hundreds of claims for compensation. The Insurer appointed Proclaim to develop a proactive process to manage the claims. By creating a process to invite members to contact us and filtering the claims into categories, with Proclaim having authority to settle the smaller claims, we were able to resolve the claims without escalation to litigation. Tailored reports were available on-line to insurers (and the insured) and there was prior agreement on authority levels and escalation. Despite a large number of emotional claims all matters were referred through this process and a class action averted.
“The true barometer of any level of service and effectiveness is feedback from our customers - the insurance broker network across Australia. To this end the reports we have heard over this period have been very complimentary to Proclaim. In particular the level of knowledge of claims staff has been a particular strong point.” Miramar Underwriting Agency Pty Ltd – Anthony Jodrell, Director.