July 2018 – Robot Claim Managers

Just over a year ago we highlighted the National Public Radio article by David Broncacio about “Robot Proof Jobs” (click here).  Our conclusion was that claim managers are safe, and that their cases will get more interesting as the easy low risk claims will take a different route.

Now we are starting to see growing acceptance of this view, particularly for short term disability insurance. There is a high volume of claims for this product, in the US this product also includes coverage for maternity claims. The case loads per claim manager are very high and there is little opportunity to do real claim management. Claim managers are frustrated and there is a high rate of burn-out, with a constant recruitment battle. This is coupled with a relentless downward pressure on costs, to further challenge operation leaders.

Short term products are not making any money and where they are combined with a Long Term Disability plan, they may even be considered a loss-leader. This cannot be sustainable.

We are starting to hear whispers of recognition that an alternative route will be necessary, and more companies are inquiring about a straight through process for these claims, with automated adjudication, automated risk assessment, and automated payment. Supported with the right claims management technology and a good analytical model, this is highly achievable.

Remove the people from the process!

The predictive model needs to identify high risk claims, ie. those that are likely to transition and where active claim management can make a difference, separating the complex claims from the serious claims.

Once identified these complex claims should be managed as if they are already a long term claim, and these are the only claims that should be allocated to a claim manager. All other claims will be handled automatically.

We have been working with a couple organizations who share this view and are starting the journey to reach this goal. These projects are not easy, getting the right data at the right time is the organizational challenge that these projects face.  

In summary, currently we are seeing that this may be the path-less-trod, but the industry’s view is changing, as strategically there may be few other paths left to take.

For more information, please email us at  info@claimlab.org