Challenges claims management faces
A claims manager’s role consists of services relating to the claims aspect of the insurance process and focusing on managing the process of compensation for loss or damage, to any party that falls under the legality of the insurer. In addition to this, top priorities for claims managers also include managing costs of repairs and curbing industry fraud, but as the market grows, so does industry competition.
More competition causes a bigger window of opportunity for clients to switch between insurers. This has resulted in added pressure to be more competitive by focusing on providing exceptional customer service at claims stage in order to also retain customer loyalty in the long run.
Notable challenges
Through the strong increase in industry competition, consumers’ expectation of good customer service has increased. When expectancy is not correctly met or dealt with, the experience often ends up being spread across social media. This, in turn, leads to an increase in reputational damage costs.
Part of the challenge for claims managers is to reduce the costs of processing insurance claims. In order to do this and improve on customer satisfaction, insurers are forced to look at ways to become more efficient. This often involves discarding legacy systems and replacing them with more flexible systems.
According to an article published in BusinessTech, South Africa is currently experiencing a shortage of skilled professionals, and the skills deficit is being compounded by a lack of technical skills. This has a negative impact on employment across many sectors of the country’s economy; also affecting the insurance sector.
A hindrance in passing
The shortage of highly skilled claims employees is a critical issue for insurers, as many are struggling to fill critical roles within company structures, especially those that require specialised skills. The lack of proper development and succession plans causes a hindrance in passing on sought-after skills.
Another consideration and notable challenge for claims managers is changing behaviour and implementing new and efficient ways to do things, which requires not only staff support, but also an understanding that change takes time and hard work to achieve. Most employees and even managers may be reluctant to leave familiar business processes, even if the new way is proven to be more efficient. Effective management of policy administration systems and transformations is a reality that poses significant adjustments to claims managers.
Due to an increase in disaster events over the past couple of years, insurers have been forced to assess their claims processes and focus on streamlining procedures. The sheer volume of claims experienced during disaster events results in added pressure placed on insurers to streamline their claims processes in order to provide feedback to clients, and ultimately finalise claims quicker to adhere to the abovementioned issues, such as losing customers to other companies, or having unhappy clients.
Change is critical
With the changing times, more reliance is placed on automation and digital interaction to aid in the increase of speed and efficiency for ultimate client satisfaction. Overcoming these challenges and achieving claims excellence will continue to be a test for insurers.
In times where growing the top line is becoming increasingly difficult due to various influencing factors, including market saturation or the inability to differentiate insurance products; insurers should adopt a controllable claims cost.
Thriving in today's business environment and managing the challenges of the claims department requires companies to change and make the best use of new technologies, even if making the switch requires investment and a lot of work. All insurers have a main aim of managing expenses wisely and operating more efficiently. By combining best practices and efficient claims management, insurers will be able to minimise claims costs, improve efficiency and, ultimately, enhance customer satisfaction.
