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What Tools to Use for Efficient Claims Management

Claims management is an essential and integral part of the insurance workflow. Though, when it comes to development, claims handling and claims management are often not a priority for Insurers, MGAs, and TPAs compared to sales, underwriting, or financial processes.

Legacy systems also fall short of expectations towards out-of-box solutions and quick roll-out. For agile software, Insurers and MGAs can buy a licence and start using it tomorrow, which is impossible for monolithic systems that require an implementation time of over half a year.

What tools to use to make claims management more efficient without spending too much resources? To find that out, we had a chat with our Claims Product Manager, Eero Link.

What is your professional background, and how does that come into play when building claims software at Insly?

I started in the insurance industry in 1995. I started as a Claims Handler and I’ve dealt with claims throughout my entire career. Over the years, I became a management board member responsible for claims handling to client services.

When I started, the systems in use were developed in the beginning or the middle of the ’80s. Over time, old systems were replaced with newer ones, but this development has been uneven and without a significant impact until today. Can you imagine what it means for an insurance company to replace the IT system fully or even partly? It’s painful. Various departments and areas use all your different systems with connections and relations. It takes a lot of effort, time, and money. Therefore, the change or development is often done partly, which may well be a step towards chaos.

I’m not saying that the systems must be developed or changed at once. I think this is not possible as it takes a lot of time to implement a new system. But by the time you have implemented it, there is already a new and improved version available. Unless you have a proper foundation for your system(s) together with a clear vision of what, when, and how to develop, you’re not set up for success. 

I have seen the mess in insurance companies in relation to IT. However, I have also seen some success stories. Today, the overall situation has improved, but it’s far from good. With great confidence and peace of mind, I argue that most Insurers, MGAs, and TPAs struggle with their IT challenges. The leading causes for the struggle are:

  • it is a complicated area with many side effects;
  • conflicting visions or lack of sight;
  • time and cost.

Looking to the future, it will indeed become more expensive to make any changes. Also, the level of complexity may rise.

I want to change this landscape. Insurance finance, underwriting, sales, and claims can be more accessible, less costly and time-consuming for Insurers, MGAs, and TPAs.

Why build a claims management tool?

Insly has already developed policy administration and financial ledger tools, so claims management fits seamlessly into the suite and is a product often requested by our customers. Having a claims management tool in place helps integrate and harmonise your workflows.

There was a market gap for a claims tool that would serve as a reasonably small and optimal solution compared to a monolithic or microservice type of software. It would allow Insurers, MGAs, and TPAs to implement custom changes efficiently without hiring an IT army.

The claims product we’re developing can also be used as a stand-alone system. So, if the user’s other systems are in place, but claims are missing, it would still be a perfect match.

Are legacy systems capable of handling today’s needs for claims?

Shortly – yes, but not for long. Any changes in functionality or other development are expensive, require a lot of time and workforce. Many might not realise how resource-intensive and clumsy it is to make changes in such systems. It’s a massive benefit for Insurers, MGAs, and TPAs to do this at speed.

It’s not uncommon for an insurance company to implement one change for more than two years. It’s also possible that Insurers, MGAs, or TPAs that operate in different countries use separate systems for claims handling in each of their branches due to the complexity of linking these. If that was not enough, it’s surprisingly common to handle different lines of business in different systems. If so, your running costs are too high. Your system maintenance, any development, and day-to-day processes are much more complicated and cost significantly more than necessary. This hybrid approach surges development costs and is far from being efficient, to put it mildly.

What makes the Insly claims management tool stand out?

Our software is built on low-code principles. That is why our claims management product enables Insurers, MGAs, or TPAs to implement, set up, and change the system themselves, without the need for external help. However, if our service is needed, our team is all in-house, simplifying change management.

Our relatively small and agile system allows scaling through microservices. Changes are easy to implement - something that could take half a year for a monolithic system can be done in days on Insly. Insly is a system where you can add anything you want, fast.

The list of functions is too long to describe it all here. Just a few examples:

  • multiclient – same system, one licence, but the user can offer their services to different clients;
  • multicurrency – reserving and payments can be made in different currencies;
  • co-insurance claims handling – can handle claims from co-insurance contracts considering different needs from co-insurance;
  • reporting – all the main reports are built-in. Of course, the user can add custom pieces himself;
  • fraud alarms – built-in fraud alarms. The user can add client-specific alarms himself;
  • FNOL web forms – ready-made;
  • alarms – to point out areas needing attention;
  • policy and event validation – editable rules to check the criteria set by the user;
  • plus, all the essential claims handling functions like reserve handling, payment handling, referrals, AML, to-dos, documentation and management, user rights, etc.

This is the core functionality of the product and there will be consistent development based on user feedback that we will be implementing on a regular basis. It’s worth registering your interest ahead of our May 2022 launch.

Why is the insurtech space growing so fast? Why can't legacy systems keep up with that?

The insurance industry is changing rapidly, with the first-mover advantage of fintech and insurtech start-ups. Companies that use legacy systems can't keep up due to the quick-change pace. Also, processing these changes through their product takes more time than creating something purpose-built with modern technology at speed.

Legacy systems also fall short of expectations towards out-of-box solutions and quick roll-out. For agile software, Insurers and MGAs can buy a licence and start using it tomorrow, which is impossible for monolithic systems that require an implementation time of over half a year.

In addition to the technical side, the legislation also changes, allowing different new approaches and solutions to the market, reducing overall cost at the end of the day. If you can take advantage of that, you will win.

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