Transforming Insurance Claims Management

Project Summary

Our client, a leading insurance provider, approached the Avec team to overhaul their claims management process. The key challenge was to streamline claims operations, ranging from claim reporting and initial documentation to settlement and payment processing, while enhancing customer experience, reducing costs, and minimising fraud.

Avec’s goal was to design necessary claims capabilities across processes, people, and technology to meet and exceed customer expectations. This involved optimising the entire operation through well-established methodologies such as Six Sigma, Total Quality Management (TQM), and Kanban, while also exploring opportunities for automation and digitalisation.

This sounds familiar

The challenge

The client was facing several issues within their existing claims process including:

  • Excessive idle time per team member
  • High volumes of reworked claims.
  • Frequent back-and-forth handoffs between employees.
  • Capacity constraints, as measured by throughput.
  • Long cycle times and significant variability per claim.
  • A low “first time right” rate (percentage of clean claims).

The solution

Our approach unfolded in three key phases, leading to a comprehensive transformation of the claims management process.

AS-IS Modeling: We began by mapping the current state across people, processes, and technology to understand the existing challenges.

Analysis & Change Platform: Collaborating with the client’s team, we diagnosed the obstacles to achieving customer-centricity, efficiency, and effectiveness. This in-depth analysis created a clear need for change and laid the foundation for the transformation.

Transformation: We designed a future-state operating model that incorporated Industrial Engineering principles and advanced digital technologies. The goal was not just a refined version of the current state but a truly transformed operation focusing on process efficiency, automation, and enhanced customer experiences. Key elements of the solution included:

  • Straight-Through Processing (STP): Redesigned processes allowed certain claims to be settled without manual assessment.
  • Queues & Kanban: Using Queueing Theory and Kanban principles, we implemented single queues and a pull-based workflow to streamline operations.
  • Team Structure Redesign: We restructured the claims team to ensure clear role definitions and task ownership, improving collaboration and significantly boosting productivity.
  • Robotic Process Automation (RPA): Automated repetitive tasks such as sending receipt messages and checking forms for completeness.
  • Artificial Intelligence (AI): Deployed AI-driven chatbots to handle customer interactions and leveraged advanced analytics to reduce fraudulent claims.

The results

Avec’s solution delivered substantial benefits for the client including:

  • A 30% increase in processing capacity.
  • A 24% reduction in cycle times.
  • A 25% reduction in customer complaints.

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