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IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Supporting Cultural Change Through Technology
Session Number 273
Case Study #1 – Knightbrook Insurance Group
• Assumptions:• Claims Performance is a Core
Function of an Insurance Company;
• Effective Claims Service Enhances Retention;
• Poor Claims Service increases Regulatory and Business Risk.
• Initiative:• Provide a Premier Level of
Claims Customer Service, without sacrificing Effective Loss Controls.
Case Study #1 – Knightbrook Insurance Group
• New Values• Customer Service Values
• New Processes• Increase effectiveness and
efficiency of claims process
• New Controls• Regulatory and service oriented
metrics to communicate stretches and goals to management and staff
• New Leadership• National Search for VP Claims for
Knight Insurance Group• Hired Mr. Gordon Pennington,
recently of Farmers
• New System• Extensive investigation of Claims
Systems which would meet our goals
Case Study #1 – Knightbrook Insurance Group
Software company diligence; what we looked for:• Platform; modern, web-based• Project Expertise/experience• Someone we trusted and could become part of the “change-team”• A Company that listened• A Partner for the long-term• Selected B2-USA’s EZ*Insure Claims System
Case Study #1 – Knightbrook Insurance Group
Issue identified in 4th quarter of 2011 Increased complaint activity Claims data provided only at high level
On site audit conducted January 2012 Audit findings included:
Reserve inadequacy Regulatory compliance issues Lack of proactive claim handling resulting in low
closure ratio and high severity
Case Study #1 – Knightbrook Insurance Group
Audit findings (cont.) included: Inadequate staffing resulting in high case loads with little to no activity Inappropriate coverage determination and application
Corrective Action Complete review of all open pending resulting in a estimated reserve
inadequacy of $6 million On Site presence from 4/2012 to 6/2012 to assist CMR with
establishing proper claim handling protocols Provided best practices and protocols to be established
Case Study #1 – Knightbrook Insurance Group
• June 2012 Knight assumed handling of all claims• Inventory and overnight shipment of 3400 files• Created a duplicate claims operation (office space, systems,
hardware)• Staffed with 25 new employees
Case Study #1 – Knightbrook Insurance Group
• Impact during 2012• Severity decreased by $3672 per claim• Average earned premium vs. average total incurred increased by $2100
per policy• Ability to establish stronger underwriting controls and take
appropriate rate increase based upon accurate claims data• Pending Reduction
• CMR had a 6% closure ratio on loss year 2011 claims• Knight closed 74% of all loss year 2011 pending in 6 months (1300
claims) • Subrogation
• Increased from $106,600 collected in three years, to $498,000 collected in one year
IASA 86TH ANNUAL EDUCATIONAL CONFERENCE & BUSINESS SHOW
Please Complete the Session Evaluation Form on the Conference App and Include Your Conference Registration ID# to be Included in a Drawing for a Free Conference Registration for the 2014 Annual Conference! NOTE: Your Conference Registration ID# is Located at the Bottom Left Hand Corner of Your Badge.