Post-pandemic challenges and the ongoing Russia-Ukraine war have resulted in a steep price hike for commodities like raw materials, food, and energy. The high price inflation will negatively impact business prospects across various industries.
The impact will be as severe as business activities coming to a standstill. As a result, enterprises will be forced to downsize their employee strength to compensate for their business losses. Insurance sectors such as property and casualty, worker’s compensation, and others are expected to witness a deluge of claims filed by laid-off employees, business interruption-related claims, and others.
To make matters worse, several insurers have witnessed instances where there is a significant gap between the stated value of a property for which a claim was filed and its actual replacement cost. It added to insurers’ claims settlement costs.
All these factors warrant the importance of outsourcing insurance claims administration services to third-party experts. They play an integral part in assisting the core resources to brainstorm and execute strategies to make claims administration more efficient in terms of cost and productivity.
Top Advantages of Outsourcing Insurance Claims Administration Services in 2022
Access to Expert Claims Managers and Adjusters
Third-party administrator insurance claims providers bring to you experts who have skills beyond just simple domain knowledge. They understand the nuances of every complexity that a claim may entail.
Two claims may have similar aspects, but it is only a trained eye of experts who can make out the subtle differences. Third-party experts bank on their industry experience to read insurance policies, understand endorsements, and investigate claims. Based on the evaluation, they connect to the right experts to expedite the claim resolution process.
This team of claims adjusters is supervised by professional unit managers. They leverage real-time analytics to get process performance insights. Upon spotting any deviation in the standard quality parameter, the managers swiftly intervene to make necessary improvisations.
Minimize Claims Litigations and Disputes
Claimants do not file litigations only to dispute a denied claim appeal. They can also file claims litigations if claims are not paid in full or if the process was not handled as per the claimant’s expectations.
Such deviations from expectations can happen due to factors like incorrect or inconsistent information. There are instances when the information provided by the claimant is not properly updated by the insurer. Simple actions like cross-checking with the claimant for information accuracy can prevent costly litigations. Experienced third-party insurance claims administration services providers have a rigid process framework in place. It helps insurers to ensure that there is missing or incomplete information during the verification stage.
Cost Efficient Operations
Cost savings is a priority for insurers as they are gearing up for a surge in claims-related losses in 2022. Insurers incur a significant expense on claims administration. Therefore, insurers must optimize the existing process to identify opportunities to save costs.
Insurance claims management companies assign remote teams of expert claims adjusters who process a large volume of claims at lower costs. Teams stationed in offshore low-cost countries get the job done at significantly lower costs because of low labor wages in the countries.
Third-party experts bring more efficiency to the claims amount calculation process. This further translates into significant cost benefits. They assist insurers in settling the exact claim amounts and minimizing losses. Such losses happen either by settling claims disputes or claims overcompensation.
In addition, outsourcing providers cover the extra mile by conducting a detailed in-network and out-of-network coverage analysis. This analysis ensures that claimants do not get anything beyond the benefits stated in their insurance plans.
Better Fraud Detection
Claimants may present doctored information to stage losses and file a claim for the same. The inability to detect such fraudulent claims has cost insurers billions of dollars annually. A recent FBI report stated that the total insurance fraud expense (excluding health insurance) is more than $40 billion per year. A large portion of this is incurred by the property/casualty insurance.
Insurance claims administration companies house professional claims adjusters who are highly skilled to detect any kind of anomalies in claim forms. They leverage machine learning and intelligent data analysis to detect fraudulent claims. Predictive models parse historical claims data of customers to detect trends. These trends may hint at a possible fraudulent claim filing attempt. These data models get more intuitive as they process more and more claims. It contributes to fraud detection accuracy.
In addition, third-party providers maintain a stringent process framework to conduct a claimant’s background checks, credit scores check, and others. In certain cases, additional information may be required for claims authenticity validation. Insurance claims management companies liaise with professional private investigators to get the required information.
Leverage Analytical Insights
Third-party claims administration service providers bank on superior analytics techniques to make their operations proactive than reactive. They use superior data analytics to derive insights into business sectors that may reach the stage of filing volumes of claims.
It also provides insights into sectors that will exhibit a gradual recession in the number of claims filed. Insurers get optimally allocate resources and capital based on these projections.
Outsourcing claims administration service providers facilitate seamless sharing of these data insights across various insurance departments. It helps underwriters to have a better understanding of areas that will face high losses in 2022. Based on this understanding, they adjust their underwriting rules.
These insights are goldmines for the product development teams. They get to identify opportunities to create new policies that are attuned to the emerging market conditions in 2022.
How We Assist You with Robust Claims Management Services?
Departments working in siloes will be the most critical deterrent in boosting claims management efficiency. An attempt to re-engineer the workflow model to break department siloes will take away an insurer’s focus on strategizing business policies in the background of delicate market conditions in 2022.
As an industry-experienced insurance claims administration service provider, we assist our clients in developing a well-thought operational model that executes siloed and complex claims processing steps.
We dedicate a team of professionals who are experts in the claims management domain. The team breaks down the entire claims processing into smaller task units and assigns professionals to execute each unit.
Our team banks on analytics tools to get a comprehensive overview of the operations of all units in real-time.
In 2022, it is imperative that insurers act quickly and make business decisions that are relevant to the ongoing market situations. On this note, we carry out in-depth primary and secondary market research. Based on the research findings, we assist insurers to devise transformational operation roadmaps. These roadmaps are based on current industry best practices to meet all the technical requirements of claims administration. This makes our client’s operation framework much more efficient and responsive to potential market disruptions.
Who We Are and What Makes Us an Expert?
This article is authored by Insurance Back Office Pro, a prominent insurance claims management services provider. We have over a decade of experience in assisting clients to bring renewed efficiency to their insurance claims management process. The insurance claims administration services we provide are policy information verification, coverage and liability amounts verification, Accord Forms assistance, fraud investigation, and collaboration for faster claims settlement.