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1© Copyright 2012 EMC Corporation. All rights reserved.
P&C Claims Automation SolutionA Competitive Advantage
Paragon Solutions, Inc.Mike Cloutier – Vice President Insurance Markets
ACORD Conference May 15-17, 2012
2© Copyright 2012 EMC Corporation. All rights reserved.
THE COST OF CLAIMS PAYMENTS AND EXPENSES IS THE SINGLE, LARGEST
SPEND FOR P&C INSURERS, ACCOUNTING FOR 75%-85% OF TOTAL ADMINISTRATIVE
COST
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Top Claims Investment Drivers
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CostsAn A.T. Kearney study found that the costs associated with reviewing and settling claims typically account for up to 65 percent of an insurer’s revenue. Claim handling costs are high because of process inefficiencies (including manual steps and re-keying) paper use, headcount for expense for all claim parties and litigation expenses
QualityMany insurers have not re-engineered their claims processes; resulting in continued process gaps, slow processes and poor customer service quality
Customer SatisfactionThe insurance industry continues to score poorly in customer satisfaction surveys. In a recent survey of companies conducted by Business Week, only two insurance companies were included in the top 25 companies identified as “The Customer Service Elite” by the publication. [1]
TimingStudies have also shown that customers who receive prompt claims settlements are more likely to renew with their existing carriers. [2]
[1] Jena McGregor with Frederick F. Jesperson, Megan Tucker and Dean Foust, “Customer Service Champs,” Business Week, 5 March 2007[2] The American Customer Satisfaction Index, “Scores by Industry: Property & Casualty Insurance,” 2006
Challenges in Claims Processing
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Other Departments
Common pain points across claims are costing insurance carriers…
Claims Management Process
…Invest-igation
DetermineCoverage
Initiate Claim
Third Party Providers
Financial Management
Consistent industry claims leakage of 8-12% of net premiums written Limited visibility into trends as well as issues with the accuracy of information contributes
to chronic industry reserve deficiencies Loss Adjustment Expense (LAE) inefficiencies are rationalized as required for severity
containment
1. When dealing with 3rd parties… Inability to measure performance or value Difficulty in selecting and implementing partnerships
2. When managing liability… Failure to apply consistent processes to detect fraud and
subrogation opportunities Sub-optimal claim handling procedures drive inconsistencies
3. When processing claims… Inefficient staffing, processes and organization structure Wasted effort and time in claim handling Poor customer service permeates process
4. When dealing with other departments… Competing incentives from department to department Poor integration between claims, underwriting, sales and agency
5. When managing financials… Errors with bills and payments Unenforced policy limits & deductibles
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Industry Impact
2
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*Source: CSFB P&C Primer, Feb 2006; Claims Magazine 20070
3
Business Challenges: Claims’ Common Pain Points & Impacts
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Critical Success Factors in Claims
Superior customerExperience
Improve Customer Satisfaction (higher retention) Customer driven state of mind Customer access (ex. website) Claim communication and facilitation Quick claims process cycle time
CoverageDetermination
Loss AdjustmentExpenses
Reduce Operational Expenses Focus on increased throughput and reduced overhead Performance based on claims throughput productivity Reduce specialization to balance loads
Loss
Reduce loss costs Indemnity payments Eliminate fraud Reduce claim leakage
Claim Resolution
Triage &Assignment Investigation
PhysicalDamageRepair
Medical Management
LitigationManagement
Claim Evaluation RecoveryFNOL
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Documentum
Speed to Value: Case-Based Solutions Case-based Solution Examples
Customer Care Contracts Management
New Account Opening
Human Resources
Accounts Payable
Claims Management
Configurable User Interface
RichIntegrationCapabilities
Model-drivenConfiguration
Process &ContentUnification
Business Process Management
Compliance Monitoring & Reporting
Customer CommunicationsIntelligent Capture
Content Management & Repository Services
Collaboration
ConfigurableDashboards
Role-based Applications
ReferenceApplications
Case Management
BestPracticesSingle platform to rapidly build case-based applications
Solutions up to 50% faster, substantially lower costConfiguration vs. coding – less resources, complexity & riskGreater application agility , lower TCO
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Digital Claims Processing Customer Example
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Background Insurance subsidiary of large US financial institution Large writer of property and casualty insurance for
business, home, and auto 2,800 employees in offices across 32 states 1,100 employees working from home offices
The Challenge Reduce time, effort, and costs associated with
documenting claims– 18 to 30 days from notification of a loss until claim data
completely entered into the system
Claims management system data types included:– 35mm and digital photos, voice depositions, video, claim
forms, police reports, official statements, etc.
Minimize impact on staff, retain data long-term, immediate data recovery
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Digital Claims Processing: An Example
The Results
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• With this solution, digital images are sent via the Internet to headquarters, loaded into the EMC Documentum repository (running with an EMC Centera content addressed storage system), and then automatically linked to the virtual claim file—all within 15 minutes
• $2.5 million annual savings• Reduced claims processing costs by $250,000 in
postal fees alone for the documentation after a recent disaster
• Speeded workflow and provided better access to information
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Paragon Solutions’ Profile
Paragon is an enterprise information management solutions company that helps firms leverage information assets to achieve better business results.
Corporate Facts• National Coverage• Global Clients• NJ Headquarters• Dual-shore Development • CAGR 20+%• Privately owned, 30-year
history
Market domain expertise focusing on client solutions
Solution competencies addressing process optimization, information management and information integration.
Advisory consulting and systems integration teams delivering business value.
Industry-aligned accelerator assets providing rapid time-to-value and lower total cost of ownership.
A proven delivery track record delivering high value and return on investment.
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Contact Paragon for More Information
Joe Pennino, Solutions Sales Directorphone: 516.610.7024;
Michael Cloutier, VP Insurance Solutionsphone: 908.783.1903;
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