Claims Leaders Face a Paradox

They need to challenge their assumptions and expectations, redefine business optimization and draw up a new map.

Overhead view of a winding country road with cars on it among tall red trees

It’s almost impossible to turn on the news and not hear about inflation affecting everything from food, gasoline and building materials to housing costs and automobile parts.    

Nowhere is the impact of these disruptive winds felt more than in the claims operations of insurance carriers. Today’s claims leaders face a paradox: Parts to fix vehicles cost more and are harder to get; building materials to repair damaged homes are also in short supply and rising dramatically in cost. While the time and cost of the claims journey are both increasing, the expectations of customers are running in the opposite direction—people want everything faster for less.

Time for a New Map

Over the past two years, we’ve worked with clients who share a similar story: Our claims counts are down; our staffing levels have remained level, yet claims morale is lower; and customer satisfaction scores are declining. What is going on?

  • It all starts with the process: While everyone is familiar with the headlines about the business environment, carriers have been slow to change their processes to adjust. In some cases, they have invested in administration systems that were designed in a pre-pandemic economy. Want a better journey? Start with a new map.
  • People still make the difference: While insurers have implemented tools and technology that can triage and assign claims to the right resources for faster processing and settlement, claimants continue to look to talk to someone who can solve their problem or explain to them what is happening with their claim and when they should expect to be made whole. Self-service portals and chatbots do not lend themselves to these types of inquiries. The adjuster is still the key figure in creating a great customer experience for both the claimant and the policyholder. Have you adjusted your staffing models to match the environment they are now operating in? Were your models designed in the same pre-pandemic time frame as your systems? If so, it’s time for a new staffing model, as the people aren’t the problem.
  • Technology can be an enabler but not the answer: New technology needs to do more than just improve the customer user interface. It needs to help the adjuster manage the current environment and efficiently communicate with the customer. How are the investments you’ve made in technology improving the journey for both your customers and your people? Not sure? What were your expected outcomes? Were your expectations wrong, or did your assumptions reflect a different landscape?

See also: Disparate Systems Kill Response Time

As the forces shaping the claims journey continue to evolve, leaders need to challenge their assumptions and expectations, redefine business optimization and chart a new path to satisfying stakeholder demands amid a changing environment.

Raymond Mazzotta

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Raymond Mazzotta

Ray Mazzotta is an accomplished insurance professional with more than 35 years of industry experience. He has in-depth knowledge and experience in underwriting, operations effectiveness, profit optimization, turnarounds and brand and reputation building.

Richard Vonesh

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Richard Vonesh

Rich Vonesh is senior management consultant at Nolan Co.

Prior to joining Nolan, Vonesh was director of casualty claims at Nationwide Insurance. His experience also includes claim director, express at CNA, where he helped build and lead a commercial P&C organization in the handling of high-frequency, low-severity losses; claim director, service center at CNA, where he led a standard line commercial and excess and surplus P&C claim organization; regional operations consultant at CNA, responsible for organizational governance and controls; vice president of operations at AmeriClaim Group, responsible for an independent adjusting operation; and leadership and technical claim roles at AIG Claim Services, Providence Washington Insurance, Commercial Union Insurance and Farmers Insurance Group.

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