Reorganizing Claims Units for New Worflows and Systems

Situation:

claims reorganization

A major international insurance company was reorganizing their claims units. The objectives were to:

  • increase economies of scale through consolidation
  • increase automation in the claims handling process
  • implement new organizational roles
  • apply rule-based processing to assign claims for optimal handling
  • apply new claims handling effectiveness measures

Central to the new organizational processes and workflows was the concept of segmenting a claim. This process was used when a claim was first reported to assign it to a claims unit with the appropriate skillset to handle that claim. The new organization was set up with three levels of claims handling units. The lowest level handle routine claims with no major injuries. The second level handled claims with injuries and possible legal issues. The third level was for claims with major injuries or deaths and potentially complex litigation.

New systems were being introduced to automate the intake of claims and route them to the appropriate unit. All units were working on the same platform with tools designed specifically for the needs of each specific type of unit.

The new systems also provided tools for the evaluation of the claims handling process by claim as well as by unit and service center. The introduction of this new performance measurement tool was a critical component of the transition.

Action Plan:

The reorganization involved the physical movement and consolidation of numerous small claims offices. There was a substantial amount of personal impact due relocations and the induction of new staff. Also, on-going claims handling operations had to be maintained during the transition.

The introduction of the segmentation model was used as a key factor in positioning the case for change. It would provide more effective claims handling and provide claims adjusters an inflow of new claims that was appropriate for their experience. The new tiered claims units was positioned as a career ladder with potential to move up in the organization handling increasingly more complex claims.

Numerous orientation and information meetings were held in each service center to provide updates on the transition. Training was developed in a modular structure so that each member of the service center would get the specific training they needed for their new role. This minimized the impact on current claims processing.

During the transition the new claims handling systems tools were introduced and each tool's role in facilitating the claim handling process was reinforced. This was subsequently linked to the on-going claims handling measurement process that was being performed by the system.

Results:

The new system was successfully deployed in on schedule. Data analysis of claims data provided strong evidence that the segmentation model was effective in assigning claims to the appropriate units. Analysis of claim handling performance as measured by open and closed claims also indicated that the new tools improved the claims handling process and improved business results.