Just like an irritating pipe dripping in an old apartment, little bits of claims leakage here and there might seem small at first. But — as with any troublesome leak — the persistence of the problem makes it unbearable in the long run… And outdated core systems can’t enable carriers to stop claims leakage before it adds up to a flood.
The four major claims leakage categories — manual error, fraud, subrogation, and salvage — involve expenses that add up, causing billions in losses for insurers each year. Carriers won’t be equipped to plug up these leaks if they still use modern legacy claims systems, which don’t support data fluidity or intelligent automation.
Claims teams are stuck with inefficient manual processes, redundant or conflicting data, and such a large volume of claims that mistakes occur more often than they should. In turn, it’s easier for fraud to sneak in or subrogation opportunities to be missed, punching more leaks in the claims pipeline.
A claims management solution like EIS ClaimSmart™ gives insurers the power to automate critical processes and mitigate leakage risks via AI and machine learning.
For example, manual errors early in the claims lifecycle are less likely if the system automatically assigns a case to the adjuster best equipped to handle it right when a first notice of loss (FNOL) is triggered. Also, anti-fraud systems that use machine learning to analyze claims won’t fall prey to outdated “if this, then that” rules of traditional fraud detection engines.
ClaimPulse™, the claims processing module of ClaimSmart, enables automation for all phases of the claims process, from FNOL to adjudication and resolution. Insurers can customize these automated workflows to focus on their most urgent leakage risks.
Through seamless API-based integration with EIS ClaimCore® and the rest of EIS Suite™ (or other major internal and external systems), claims teams can equip themselves with all the claim, policy, and customer information necessary to avoid falling into common leakage traps, like missing subrogation opportunities.
The ClaimSmart anti-fraud module, ClaimGuard™, leverages AI and machine learning and a unique scoring system to assess fraud risks early on, so suspicious claims receive appropriate scrutiny, but low-risk claims are quickly resolved to lower processing costs.
When an international P&C insurer implemented ClaimSmart to plug up steadily increasing leakage, they reduced fraud costs (by over 40%) through improved detection and reduced false positives, which led to $48 million in annual savings.
To make sure carriers don’t miss the chance to recover claims-related costs, they can customize workflows in the automated processing layer of ClaimPulse to immediately identify claims with at-fault billable parties.
With the data gathering and reporting capabilities in ClaimSmart and ClaimCore, carriers can look more comprehensively than ever at the claims leakage phenomenon and make better decisions about how to mitigate it over time.
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