Motor Insurers’ Bureau Gets Consistent Claims with Colossus
Client:Motor Insurers’ Bureau
- Control claims handling and reduce leakages – particularly for personal injury claims
- CSC’s Colossus software for bodily injury claims evaluation, negotiation and settlement
- Consistent evaluation, reducing variance in personal injury settlements
- Contributed to almost 50% reduction in claims leakage
Focus on Personal Injury Claims
Motor Insurers’ Bureau (MIB) compensates the victims of negligent uninsured and untraced motorists. It deals with over 30,000 claims every year from victims involved in accidents with uninsured and hit-and-run drivers. Every insurer who underwrites motor insurance in the U.K. is obliged by the Government to be a member of MIB and contribute to its funding.
The mission of MIB, a nonprofit organization, is to reduce the level and impact of uninsured motoring, with an eventual aim to cut its members’ levy and the consequent cost to the consumer through policy premiums.
Claims leakage is a key focus area for MIB in achieving its mission, particularly for personal injury claims. According to the Association of British Insurers, the cost of personal injury claims has soared in recent years. The proportion of claims received by MIB involving a personal injury element was also on a steep rise before Colossus was introduced — from 43 percent to 77 percent in the space of a year.
At the time MIB launched a strategic plan to improve claims management, the company was handling around 75,000 claims a year. It employed more than 250 personnel on a single site at Milton Keynes, including claims handlers who investigate, assess and negotiate each claim manually, relying on personal expertise and experience to seek a settlement.
As part of the strategic plan — which included re-engineering working systems and processes to improve service quality, reduce claims lifecycles and combat leakage — MIB investigated how technology could support its claims handlers.
Leading Expert Claims System
MIB assessed CSC’s expert system, Colossus, which sets the worldwide industry standard for valuation tools. It helps claims handlers to accurately and fairly evaluate personal injury claims, and insurers to proactively manage the process efficiently and cost-effectively.
Used by some of the largest insurers in the U.K. and Ireland, including four of the U.K.’s top seven and nearly 25 percent of the top 100 U.S. insurers, Colossus has a proven success record.
Following a pilot of two systems, MIB awarded the contract to Colossus. According to Ashton West, chief executive officer, MIB: “Whilst other systems would have allowed us to achieve the desired level of consistency in damage assessments, MIB chose CSC because of its extensive U.K. customer base and the wide use of Colossus within the insurance community.”
Consistent Claims Settlements
Colossus was integrated with both MIB’s existing administration system and its new imaging technology, reducing duplication of effort, paper and printing costs. New guidelines were issued to staff, and Colossus is now a central support tool for MIB’s claims handlers, providing consistency in the settlement of all personal injury claims.
MIB’s claims handlers enter details of the claimant and injury for each valid claim. Colossus guides the entry process with questions determined by preset business rules, ensuring accurate data input. When all claim details have been entered, Colossus evaluates the claim based on relevant medical treatment information and provides a range of settlement amounts appropriate to the injury and circumstances.
The claims handler is then able to negotiate with the claimant, confident that the settlement offer is fair. Because all MIB claim handlers use the same process, the Bureau reduces variance in payouts on similar bodily injury claims and consequently reduces leakage.
Ashton West says that claims leakage was reduced by nearly 50% during the first year of Colossus implementation: “One of the main contributory factors to the leakage reduction was the introduction for claims handlers of the decision support software Colossus, supplied by CSC.”
He continued: “The installation has been a considerable success and has assisted in providing a more consistent claim handling service to our customers.”
Another important benefit delivered by Colossus is management reporting. The system’s reporting capabilities allow MIB to better monitor and understand its claims history and performance, and provide accurate information for its members.
That information reflects a picture of continuing performance improvement for MIB. Latest figures show that 61,360 claims were settled in 2010, compared to 60,076 in 2009. Also, fraud savings of £6.45 million were identified in 2010, compared with £3.64 million in 2009.
The overall claims lifecycle reduced by 47 days over the same period. Customer relations also improved steadily, reflected in an 11 percent reduction in complaints received in 2010 compared to 2009.