A balancing act: Claims managers meet industry challenges head on

Effective claims management is not about the latest fad or philosophy, but about mutual trust, respect, integrity and fair treatment, as espoused in the pending Treating Customers Fairly regulation. "Ethical standards must be clear and consistent – and claims managers need to set high standards for both client and employee,” says Hattingh.

A claims manager’s actions affirm the behaviour and attitude that is acceptable at claims stage. In order to prevent unacceptable or inappropriate claims behaviour, claims managers must evaluate and address the pay-off that employees or clients receive when behaving in an undesirable way.

The rules, policies and philosophies of both the claims manager and the insurance organisation reflect in the attitude and performance of all parties in the claims management process. It is critical, therefore, that claims information is communicated effectively to staff members, business partners and clients on an ongoing basis.

It is important that claims managers discuss the claims resolution actions with all stakeholders in the process. By doing so each person knows what the desired outcome is, how the outcome will affect them and what expectations need to be met.

A comprehensive claims assessment process demands that you look beyond the policy wording and consider causal links and circumstances too. "Insurance organisations are dividing their claims departments into litigation, recovery, liability, special investigations, safety and loss prevention, and other specialist fields to ensure that the most appropriate individual handles specific claims activities,” notes Hattingh.

Insurers are under tremendous pressure to recruit these specialist skills! "Employing specialists puts tremendous strain on both the recruitment and selection process,” she says. "The skills shortage is exacerbated due to the competitive insurance environment, the number of industry experts reaching retirement age and budget constraints, among others.”

Another challenge claims managers face is to keep pace with the insurer’s desire for greater market share. Product providers are trying to outdo one another by developing innovative and niche insurance products, thereby adding to the complexity at claims stage.

The market is becoming more customer oriented, challenging claims management employees to satisfy customer needs. This increases the stress levels among already stretched employees, with the number of open cases and claims volumes increasing each year. "Meeting the stipulations of the increased number of consumer boards, councils and bodies without sacrificing quality for quantity, are top priority,” notes Hattingh.

Educating clients on the outcome of a claim and explaining misunderstood terminology (such as the "average” clause) is an ongoing challenge. Claims departments come under fire when consumers approach the Ombudsman for Short Term Insurance with complaints about matters that could have been easily addressed or explained. The result is that claims managers are continuously managing client perceptions and expectations in the market place.

The employees’ desire for greater independence and autonomy can also be a challenge for claims managers to overcome, especially when the employee is not ready to single-handedly perform or execute certain tasks.

Other claims management challenges include:

• Maintaining flexibility in insurance companies where innovative technology is introduced;

• Obtaining immediate and accurate information about estimated activity and costs when disaster strikes, as each catastrophe has unique claims handling challenges;

• Dealing with risks that arise from an uncertain economy;

• Automating and streamlining routine administrative tasks and labour intensive manual functions with the aim to prevent or minimise inconsistent claims reviews, inefficient workflow, fragmented communication and common mistakes;

• Focusing specialised resources where they are needed most; and

• Empowering staff with the training and tools needed to drive efficiency and effectiveness despite constrained budgets.

The claims management profession continues to evolve. To stay ahead of the pack, claims managers must actively control claims costs, exercise the strictest quality control and balance claimants’ compensation with the premium paid.