P&C Claims Organization Improves Bodily Injury Evaluation and Settlement Consistency
Client:U.S. P&C Carrier
- Improve consistency in bodily injury evaluation and negotiation
- CSC’s Colossus software including its claims matching component
- Increased consistency of claims evaluation by 10 percent
- Improved adjuster confidence with data from 30,000 claims
- Streamlined training and workflow, and improved management information and trend analysis
One of the oldest U.S. property and casualty insurers operates as a group of companies that’s constantly looking to the future. This property and casualty (P&C) carrier, which offers commercial and personal lines in various markets, relies on the latest technology and claims tools.
“Historically, we’ve faced challenges that are similar to others in the industry, mainly bringing about some consistency to the claim evaluation process and the negotiation process,” according to the company’s vice president of claims. “Because of that, we’ve looked to technology to assist us in improving our consistency.”
For more than a decade, the company has relied on CSC’s Colossus® software, the industry’s leading expert tool for evaluating bodily injuries. The software helps adjusters quickly interpret medical reports and look up definitions of injuries, treatments, complications and permanent impairments. Using a series of interactive questions contained in the Colossus software, adjusters perform objective evaluations of medical treatment options, degree of pain and suffering, degree of permanent impairment to the claimant’s body, and the impact of the injury on the claimant’s lifestyle.
Early on, the company conducted a study to see how inconsistent settlements could be across roughly 15,000 bodily injury claims a year. The claims vice president distributed the facts of several bodily injury claims to every claim handler at the company. He provided the background information about how each accident occurred, the types of injuries sustained and the medical treatments provided. After that, he told each adjuster and attorney to evaluate the claims and submit an offer for each individual claim.
“In several instances, the suggested payouts varied by as much as 300 percent,” he recalled. “We suspected that this stemmed from the variety of different backgrounds, experience, medical knowledge and training levels throughout our staff. Through the years, we have no doubt that CSC’s Colossus software delivered what we expected from it, mainly bringing about the consistency we sought in the evaluation process.”
Supporting the Negotiation Process
While it improved the claims evaluation process, the company was also looking for ways to better support the crucial negotiation process between claimants and adjusters. What better way than to help adjusters compare new claims with the outcomes of similar historical claims?
“The historical information on our claim settlements has always been there,” the vice president noted. “But we didn’t have a tool that could go out and search and identify like or similar claims and bring them back to the front-end user’s desktop. We weren’t aware of anything on the market.”
The company worked with CSC and became the first carrier to install the historical matching component of Colossus that bridges the gap between assessment and negotiation. This tool allows adjusters to analyze the company’s own past experience on a claim-by-claim basis.
Adjusters Better Prepared to Negotiate
The company initially introduced the new tool in one office and completed the companywide rollout in 2007. Adjusters now search information from more than 30,000 historical claims to create comparisons, and they’re using that information to prepare for negotiations with claimants.
“There’s no question that when adjusters are provided with like or similar claims that were settled in the past, they’re better prepared to negotiate what’s been established as a settlement range for a case,” according to the vice president. “The process of receiving similar claims gives adjusters something to look at to validate what they had originally believed to be the case, and it gives them further confidence to negotiate based on that original evaluation.”
Not only can claim handlers compare the values of similar closed claims but they can analyze the details and settlement amounts for all cases filed by each plaintiff’s attorney.
“Our adjusters find similar, real-life claims within our records that others have handled. It makes various suggestions based on jurisdiction, status of the case, whether it’s in litigation or not, and other factors that influence value. Finally, the adjuster makes the final determination, using the two figures as support.”
Since implementing the tool, the company has seen even more consistency improvements. “We’re seeing a much greater degree of consistency, where in the past about 20 percent of claims were being settled above the recommended high in Colossus, now only about 10 percent exceed that value,” he said. “We’ve also seen an increase in adjuster confidence. Regardless of how much experience they have, our claim handlers essentially begin each claim on a level playing field.”
At a higher level, the company’s management team uses CSC’s claims tools to track results and trends across the company’s operations. “It has given us management information concerning bodily injury settlements that we did not previously have,” he added.
Tapping into the Users’ Community
Even after the implementation of the system, the company continues to work with CSC through users’ groups and executive forums to support the ongoing upgrades of its software products. The company worked with CSC to include enhancements in the latest version that help pinpoint the “most likely estimate” for a claim and allow for continual analysis of the historical data to ensure estimates are up to date.
“CSC has done a very good job of tapping into the users’ community to find ways to constantly improve and enhance its products,” the vice president said. “I have always found the folks at CSC to be very confident and knowledgeable. They know their products and they understand our business.”