Tag Archives: Wesley Todd

legal department

2 Steps to Transform Claims, Legal Group

Technology. Innovation. Even in 2016, when “technology” and “innovation” are oftentimes brushed aside as clichéd buzzwords, technology and innovation can still be daunting to many of us. Even more daunting is implementing technology in your insurance company to transform your claims and legal department.

By breaking down innovation into the two simple steps described here, using technology to spur innovation becomes a lot less daunting. In fact, using the technology described here, you can achieve breakthrough improvements in performance while simultaneously decreasing expenses.

  1. Document Automation

Automating legal documents is a simple way to use technology to improve processes and save money. Claims and legal executives at insurance companies know that pleadings and other legal documents full of the same old legalese are par for the course. No matter the case, claims and legal executives see the same pleadings containing the same content time and again. Nevertheless, attorneys continue to charge for each legal document, and insurance companies continue to pay for each legal document. Even more troubling, these documents typically have little to no impact on the pending litigation, and they are impossible to manage.

The solution is legal document automation. Imagine if you had a robust library of hundreds of automated legal documents including pleadings, discovery, letters, notices and motions at your fingertips. These standardized forms allow for stricter quality control and instant access to top-shelf legal documents. Insurers do not pay for the same document twice, leading to huge financial savings. Perhaps most important, a software-based platform aligns with changes in strategy, case law and legislative change to ensure these are captured in every legal document. Taken together, automation allows insurers to take control of legal outcomes.

Legal documents are the toolbox of every legal department and attorney handling a case. If you are not busy and are not trying to profit, go ahead and use a hammer and nail to litigate. But if you looking to innovate and transform your department, why not use a power drill?

  1. Analytics

Insurance company executives handling claims and litigation have data. Lots and lots of data. Turning that data into intelligence is no easy task, but it is crucial in this rapidly changing insurance industry. You must move your business from yesterday’s hard data environment to today’s efficient virtual platform. Real-time intelligence, including descriptive and predictive analytics, will take your claims and legal department into the future.

Descriptive Analytics

Descriptive analytics answer one simple question: “What happened?”

Using software to capture yesterday’s hard data, your claims and legal department can transform latent data into actionable descriptive analytics, allowing you to answer many of the important questions:

  • When is the claims process most likely to break down?
  • Which adjusters and engineers realize the least overall cost, including indemnity and expense?
  • Which attorneys achieve the best combination of results and expenses?
  • What are the emerging issues and how can we mitigate them?

Predictive Analytics

Predictive analytics answer another simple question: “What might happen?”

For example, predictive analytics could provide a range of the number of times an insurance company may be sued next year based on data trends from last year.

Predictive analytics allow a claims and legal department to:

  1. Allocate resources
  2. Reserve
  3. Produce effective and efficient settlement values
  4. Identify potentially fraudulent claims
  5. Identify potentially large losses
  6. Manage expenses
  7. Analyze emerging issue trends to aid the underwriting process

Technology can capture yesterday’s hard data and makes it searchable, sortable and reportable. Further, using a customized collaboration tool with the right fields accessible to the right users, you could automatically collect the most pertinent financial data in real time. This technology allows access to descriptive and predictive analytics and gives insurers the ability to evaluate expenses and outcomes on a real-time basis, as well as obtain efficient resolutions.

By focusing on these two simple steps, insurers can turn claims and litigation expenses into valuable assets. Gone are the days of zero return on investment. Implement these two steps, and your litigation costs will produce countless opportunities to reduce expenses and write better business.

The One Thing to Do to Innovate on Claims

If you love football, then you know how frustrating it is to be a football fan. Every offseason, you get excited about the potential for the coming season. Before the season begins, you read all of the articles and watch the analysts.

They all say, “This is the year.” Your team added some of the top defensive players in the league. You’re convinced the team has solved its offensive woes, too. Your team added a star wide receiver, and the running back is looking great in training camp.

Then the season starts, and your team suffers loss after loss. You question how professionals can spend so much time and money on the sport yet fail to improve. As the season continues to sputter, more and more people call for the team to fire the coach. At the end of the season, they fire the coach and hire a new star coach from a great team.

“Next year,” you and the rest of the fan base tell each other.

The next season begins and your team still loses. Year after year, the cycle repeats itself.

When it comes to innovation, insurance company claims departments have a lot in common with your favorite underachieving football team. Top talent in every department. Great recruits from top companies. Lots of talk about the newest technology. But each year you get the same results.

How can you solve this problem?

The One Thing

In “The One Thing,” Gary Keller shares several lessons we should apply to the insurance claims industry. He does so by simplifying the decision-making process. Whether you’re the general manager of a football team or an insurance claims executive, you can apply Keller’s lessons to your situation.

The Six Lies Between You and Success:

  1. The idea that everything matters equally;
  2. Multitasking;
  3. Lack of discipline;
  4. The belief that willpower is always on will-call;
  5. A balanced life;
  6. The idea that big is bad.

These “Six Lies” insurance claims departments. Claims professionals will get what they put in each day. If that’s emailing about hundreds of claims, then claims professionals will get routine claim maintenance. They will not achieve innovation. By making routine claim maintenance the priority, claims departments are falling victim to the six lies standing between the claims department and innovation.

The Four Thieves of Productivity:

  1. Inability to say “No”;
  2. Fear of chaos;
  3. Poor health habits;
  4. An environment that doesn’t support your goals.

While I can’t make any assumptions about whether there are poor health habits in your claims departments (unless your claims professionals are gorging on the vendor-sponsored food!), I can assume that the four thieves should resonate with you.

Insurance claims professionals do what they do because that’s what everybody has always done. No one has ever been terminated for saying “yes” to a responsibility. People who follow the status quo feel safer than people who hinge their success on a business transformation. As a result, claims departments are productive at claims maintenance, but they often leave much to be desired when it comes to innovation.

The Focusing Question

Keller condenses the entire book into what he calls “The Focusing Question.”

What’s the one thing you can do now such that by doing it everything else will become easier or unnecessary?

Good questions are the path to great answers. By combining a small focus with a big goal, the “Focusing Question” provides you with the ideal starting point to achieve something great.

Claims innovation requires starting with “The One Thing” today: giving your best claims manager responsibility for transforming the claims department. While this may sound drastic, it truly is “The One Thing” that will transform an insurance company. I’ve seen it. With a strong leader dedicated to this project, executives will breeze through the process of selecting vendors, identifying key requirements, troubleshooting workflows and handling anything that stands in the way of true innovation.

Once “The One Thing” is addressed, many tasks will follow: assigning a good leader from the IT department, engaging an outside consultant and supporting the department with future-focused software. But until executives dedicate their best claims manager to “The One Thing,” claims departments will suffer from unnecessary obstacles.

Claims departments and football teams will keep underachieving until they get their franchise quarterbacks. You can hire all the star free agents and coach your teams to change, but if your quarterback spends his time focusing on the same old plays, get ready for another year with the same results.

Who will be your company’s Tom Brady?