Claims - Operational Strategies
In the insurance sector Claims Operational Strategies seem to be predicated on two philosophies:
- Cost efficiency and containment &
- Improving customer service.
However, organisations deploy very different strategies based upon how much they subscribe to each philosophy.
Cost containment initiatives focus upon improving the current situation, whether this is process efficiency, sourcing (in and out), fraud management or leakage prevention.
Customer initiatives tend to enhance services that support the claimant and third party. However, strategic customer claims projects are very rare, this is because there usually needs to be an overriding cost savings element to lead to the sanctioning of the business case.
For example, a business case focused on improving supply chain management may offer customers better choice (variety and through betterment) to replacement goods but such an initiative is usually sanctioned because of the cost savings that can be made. By contrast, e-claims projects, for example may have a primary objective of improving customer service, however, cost reduction of non value added tasks as driver is seen to be just as important.
This is not to say that customer service isn't important or worth striving for, just that they must be seen in the context of cost management initiatives (though the converse is not necessarily true). It is no surprise that in the current credit crunch climate, insurers are understandably pursuing projects focused on reducing their expense ratio. Any outlay in external spend is always considered based on a return on investment.
In Winchester White's view credit crunch or no credit crunch, focus on leakage management, process improvement and eliminating non value added tasks should be a continuous focus 365 days a year. This may not lead to innovative or "new" projects, but reducing your expense ratio to a balanced level so that it doesn't impair your base service targets will release capital for other areas of your business and this must be a strategic principle for every organization.
Please contact Aash Patel, Principal Consultant, for further details on tel: 01256 363000