Insurance Claims Management KPIs are vital to monitor and evaluate the overall performance of claims teams and processes.
Why are Insurance Claims Management KPIs important?
Claims management plays a crucial role in the success and reputation of a company. Efficient claims handling helps build trust, enhances customer satisfaction, ensures timely payments, and minimises fraudulent activities. On the other hand, ineffective claims management can lead to the loss of customers, increased costs, and reputational damage. To avoid these negative consequences, insurance companies must closely monitor and analyse their claims management performance using relevant KPIs.
Setting Clear Goals and Objectives for Claims Management
Before delving into the specific KPIs, it is essential to establish clear goals and objectives for claims management. These goals should align with the organisation’s overall strategy and vision. Examples of goals for claims management might include reducing claims processing time, improving claims accuracy, increasing customer satisfaction ratings, or minimising claims costs. Clear objectives provide a framework for selecting the appropriate KPIs and measuring progress towards achieving these goals.
Identifying the Right KPIs for Your Claims Management Strategy
There are numerous KPIs that companies can use to monitor and evaluate their claims management performance. However, not all KPIs are equally relevant or valuable. It is crucial to identify the KPIs that align with your specific goals and objectives. Here we will examine three essential KPIs for optimal claims management:
Claims Cost per Closed File: This KPI measures the average cost associated with processing and settling each claim. Monitoring this KPI allows companies to assess their operational efficiency and identify areas where costs can be reduced. By tracking claims cost per closed file, organisations can identify patterns, such as overly complicated claims processes or high settlement payouts, which may indicate the need for process improvements or better risk assessment protocols.
Claims Frequency Rate: This KPI determines the frequency at which claims are filed. High claims frequency rates may indicate underlying issues, such as inadequate risk management. Monitoring this KPI allows companies to proactively address potential issues by investigating the cause of the frequent claims and implementing measures to mitigate risk.
Claims Settlement Ratio: This KPI measures the ratio of settled claims to the total number of claims received. A high settlement ratio indicates efficient claims handling and customer satisfaction, whereas a low settlement ratio may indicate delays or disputes in the claims resolution process. Monitoring this KPI helps insurance companies identify bottlenecks in their claims management and improve processes to ensure timely settlements.
How to monitor Insurance Claims Management KPIs
As the volume of claims continues to increase, manual monitoring and analysis of KPIs become time-consuming and error-prone. Leveraging automation and advanced reporting and business intelligence integration can help companies streamline KPI monitoring processes and gain real-time insights into their claims management performance. Supercharged reporting can collect and analyse data from various sources, enabling claims managers to make data-driven decisions and implement appropriate corrective actions.
Analysing Your Claims Management KPIs
Once the relevant KPIs have been identified and the necessary data has been collected, it is crucial to analyse the KPIs to gain actionable insights. A thorough analysis can reveal patterns, trends, and areas for improvement within claims management processes. For example, if the claims cost per closed file is consistently high, it may be indicative of inefficient processes or excessive payouts. Analysis also helps identify outlier cases, such as fraudulent claims, which may require further investigation. Part of this analysis should always evaluate if KPIs are being met. If some are easily achieved, and others never achieved, what is this data telling you?
Adjusting Your Claims Management Strategy Based on KPIs
The analysis of KPIs allows companies to identify areas for adjustment and improvement within their claims management strategy. By understanding the root causes of under performing KPIs, organisations can take corrective actions to drive better outcomes. Regularly monitoring and analysing KPIs provide an opportunity for continuous improvement in claims management strategies and processes.
How can Alphatec’s ClaimControl help?
Using a claims management software solution, means all your data is in one place. Our claims management software ClaimControl can be configured to report against KPIs. Reporting is extensive from a myriad of standard reports to a host of bespoke reports. This reporting, along with business intelligence integration means that you can derive comprehensive understanding of your performance against KPIs. Do contact us to know more.