More than one third (35%) of claims officers are focused on increased centralization in their claims operations, according to a survey conducted by Towers Watson. Only 4% of respondents reported a decentralized approach.
The survey, the fifth installment of Towers Watson's Property & Casualty Claims Officer Survey, focuses on 2010 operational perspectives and how claims operations impact corporate structure. Chief claims officers (CCO) from small, medium and large insurance carriers comprise the group of respondents.
Most participants report staying on track by maintaining best practices, cost control measures and increased efficiency in the wake of the economic downturn. Centralization, a recurring theme, is being approached from every angle—management, efficiency and technology.
In the lion's share of companies surveyed, CCOs hold an executive level position within the larger organization (89%), giving high-level control to the claim operation and further supporting centralization. More than half of those companies with high-level control at the helm in claims (54%) report no support from in-house counsel. For those with counsel, reliance is split between use for most lawsuits (38%) and use for routine shorter-duration litigation (43%).
Call centers play a pivotal role in claim operations for personal and mixed carriers (94%) and for more than half of commercial lines carriers (58%). Many use their call center for first notice (71%) and just over half use the center to assign an appraiser, schedule a drive in and/or make a repair shop referral. Only about 14% use their call center for fast track adjusting—operations where a dedicated adjuster or unit handles the entire claim from beginning to close.
Respondents reported a high degree of consolidation for technical claim support functions with recovery at the top of the list (87%) followed by fraud/SIU (80%), medical bill review (57%), and legal bill review (48%). Several specialized claim-handling functions—specialty claims, workers' comp medical, and no-fault claims—are also highly centralized.
"In general, respondents are following industry best practices by centralizing claim operations and holding the chief claims officer responsible for claim performance accountability, supported by in-house counsel, " states Towers Watson in its analysis. "Planned investments in technology and centralized systems can be expected to further increase efficiency and support best practice claim operations."
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