In keeping with increasing threat perception globally both from natural disasters and terror-related activities, there has been an escalation in claims related work in the insurance sector. This has put additional pressure on insurance companies who have found this to be a distraction from their core business activity of selling and issuing insurance policies. Cost is another factor here. More investment in infrastructure has to be made to meet this rise in claim demands. Thus from any aspect that one looks at this scenario the picture is always the same. Insurance companies need claims administration services to boost productiveness.
Claims administration outsourcing has other advantages too. Apart from helping in cost reduction, insurance companies can offer a higher level of customer service, get more business and not get bogged down by a settlement of claims. Again, cost reduction gives the insurance companies greater flexibility in pricing their products and creating greater business opportunities. The existing manpower can be better utilized in core activities to boost productivity.
Claims administration outsourcing services basically offer the following as a part of a comprehensive claims administration package –
Claim set-up, eligibility, and estimation – The preliminary work related to claims administration consists of accepting a claim and evaluating its eligibility. There are different statutory exemptions and inclusions in claim processing and all these have to be gone through with a fine comb before the final eligibility can be arrived at. This procedure requires great professional expertise and outsourcing agencies have specially trained and knowledgeable people for handling this aspect.
Disbursement – Even though this is the natural fallout of the whole process, due care has to be taken to ensure that the proceeds go to the actual claimant. It has been seen that determining this aspect often turns critical due to legal complications. By being free from this non-productive activity insurance companies can boost their performance levels in core activities.
Fast track adjudication – A great deal of credibility of an insurance company rests on claim settlement and quick adjudication. An individual will buy a policy on the assumption that if anything untoward is to happen his claim will be speedily settled without any trouble to the nominee. Anything otherwise will shake the faith people have on insurance companies, one reason why claims are settled at the earliest when companies choose claims administration services.
Claim auditing – This is again a very crucial component of the total claims administration process as outsourcing agencies have to submit their disbursed claim papers for audit and checking for any form of inaccuracies. This can be carried out by either by the parent company or by other regulatory or statutory bodies.
By understanding and going through the factors that take in the total claims administration procedure, it is possible to see how claims administration outsourcing can free up the insurance companies enabling them to focus on more productivity activity that has a direct bearing on business growth and profitability.