Mark Foerster

Vice President, Group

Operations & Claims,

Munich RE

Claims Management &

Technology in 2020

Agenda

• Claims Management Evolution

• Time for a Claims Revolution

• Claims Management Technology in 2020:

Improved service, outcomes & efficiencies

• Q & A

CLAIM

Claims Management Evolution

Claims Management Evolution –

Growing Sophistication

• Every claim is unique. Every claims assessor has good instincts.

• Claim proofs. Processing manuals.

• Job criteria. Selective hiring.

• Training. Best Practices.

• Metrics. Analytics.

• Predictive Modeling.

• Smart decision support.

Claims Management Evolution –

Management’s Changing View

• Administration

function only.

• Service orientation.

• Cost centre.

Efficiency.

• Risk management.

Claims Management Evolution –

Management’s Changing View

• Actual versus expected claims. Profit protection. Duration management.

• Feedback loop to product development, sales, underwriting and pricing.

• Return on investment.

Claims Management Evolution –

Key Success Ingredients

• Data & analysis

• State-of-the-art Technology

• Inter-department

connections

• Business savvy & visionary

leaders

D

Peter Maynard, Director, SelectX

Dave Nicolai, Senior Vice President, FINEOS

D

Mark Foerster

mfoerster@munichre.ca

416-359-2299

Thank-you for attending this session.

Time for a claims

revolution

Peter Maynard, SelectX

Introducing SelectX…

• Niche management consultancy specialising

in underwriting and new business process

for life and disability

• Core offerings:

– Creating modern, efficient processes

– Underwriting engines

– Underwriting manuals – RiskApps

Agenda

• The claims environment

• What insurers are doing

• The case for applying technology

• Vision of the future – how far away is this?

The claims environment

The claim is where you’re judged

• It occurs after – maybe long after –

application and acceptance but it’s where the

insurer stakes its reputation

Tough customers

• Don’t trust insurers

• Better informed than ever before

• Higher expectations than…

• More likely to complain

• Backed by consumer groups and

official advocates

• Connected like never before –

cell phones, email, blogs, social media

• (Bad news travels faster than ever before)

Tighter regulation

• A strengthening iron grip

• Closer attention to how business is done –

products, processes throughout

the policy lifetime, how customers are treated

• Sharper focus on financial stability

• (And in fairness, does any part of

financial services have a

great reputation?)

Emerging from the GFC…

• Recession over (not everywhere) but

economic growth still weak

• So is consumer demand in developed

countries

• Nevertheless there is more business

optimism and a greater willingness to invest

Technology (1)

• The connected global society

• Home computing

• Mobile devices, tablets

– Functionality+++ all in one place

People with access to information and the

ability to transmit it, almost anytime, anywhere

Technology (2)

What are insurers doing?

SelectX’s survey (2011)

• 132 insurers worldwide

• Processing on average per year:

– 4,000 life claims

– 900 disability claims

– 270 critical illness claims

– 260 total and permanent disability (lump sum) claims

– 370 long-term care claims

– 530 premium waiver claims

– 14,500 ‘other’ (eg hospital cash) claims

Use of technology

Technology that supports claim notification through to settlement

Don't have any

Currently implementing

Have technology; been in place for ≥3 years

Have technology; been in place for <3 years

Use for part of process only

Other

23%

27%

11%

10%

12%

17%

Technology implemented (1)

0% 5% 10% 15% 20% 25%

Own-design bolt-on module

Own-design stand-alone module

Bought-in bolt-on module

Bought-in stand-alone module

Remote access to external system

Fully-integrated own-design system

Fully integrated bought-in system

Other

Series 1

Can technology implemented…?

0% 10% 20% 30% 40% 50% 60%

Automatic status updates

Online submission of forms

Initial triage rules engine for stakeholder …

Track assessor productivity

Track assessor performance against …

Assessor authority limits by product

High fraud risk identifier

Key indicator tracking against b/marks

Reserve movement tracking

‘No, it can’t…'

Claim decision-making tools

0% 10% 20% 30% 40% 50% 60% 70%

Paper checklists

Electronic checklists

Paper worksheet

Electronic worksheet

Paper decision trees

Electronic decision trees

Paper guidelines

Electronic guidelines

Company intranet

Electronic benefit calculators

E-learning resources

Conclusions from survey

• Insurers have invested in underwriting but

not in claims

• Mixture of tools being used – much is very

simple

• Gathering and use of MI is relatively poor

• Claim processing very much based on

human judgment

• Claims teams want better

Contrast with new business

• On-line submission is almost the norm

• Underwriting engines increasingly used…

and growing on power and sophistication

• Quotation tools for intermediaries

• Streamlining further with predictive analytics

• Plenty of investment

OK, the numbers are bigger but this is regarded

as the sexy end of the business

Claim processing in future

For the customer

• Access on line

• Tele-claims

• Deal by e-mail

• Personal assessors

• Faster service

• On-line smart form

submission; e-attachments

• Guide customer through

process

• Engine-driven, at least for

initial triage

• Customer populates your

system…

• Manage customer

expectations

Leverage technology

• Smartphones:

– Camera

– Video

– Claim apps

• Medical apps; use of personal e-medicine data

• Modern computing (that helps make the IT department redundant)

• ‘Big data’ (so as to be able to predict rather than merely react)

Internal processes

• Workflow (of course)

• Claims management

system:

– Case triage

– Decision-making guidelines

– Case

monitoring/tracking/review

– Management information –

and use in conjunction with

‘big data’

• Engine-driven process

• Guidance for assessors

• Use of less-skilled staff

Benefits

• Happier customers/claimants

• Enhanced reputation (within industry and among

consumers)…

• … and reduced reputational risk

• More consistent decision-making and claim

management

• Cost savings

• Better management information

• Better understanding of the business

Understanding the business

• Relating cause of claim to:

– Underwriting actions/decisions

– Source of business

• More detailed and easier claims analysis

• Easier monitoring of claim process

performance

• More accurate reserving for disability claims:

lower reserves and/or earlier release

Really, it’s all a no-brainer

And you don’t have to be big…

… to do all this:

• Outsource

• SaaS

• Cloud computing

You don’t have to have a big, expensive system

sitting on your own servers. That makes the business

case easier.

Claims in 2020?

Most of this could happen

tomorrow.

The biggest limiting factors are

an insurer’s commitment to

customers and its vision of a

better-run business.

Thank you.

Peter Maynard

peter@selectx.co.uk

+44 1844 274069

Claims Management

Technology in 2020

David Nicolai, FINEOS

Improved service, outcomes, and efficiencies.

Agenda

• The typical claims department of today / Current Technical Challenges

• What’s possible already today

• The claims department of 2020

Typical Claims Department

of Today /

Technical Challenges

© FINEOS CORPORATION

World of the Claims Examiner

Claims processing typically supported by

a variety of technology, processes and

practices

How difficult is good customer service in this environment?

How easy is it to trace all that has happened to a

claim?

How comfortable are you with key

calculations on “Shadow IT”?

Can you enforce what happens and when it

happens?

Defining characteristic is

complexity

Provider databases

Letter templates

Policy admin

Expert systems File

notes

Work flow

Benefit calculations

Paper folders

Legacy systems

Scanned documents

Email

Over payment calculations Indexation

Partial earnings

Tax, Interest Diary

Word docs

Post-its

Checklists

Transaction Claim form

Claims System Capabilities –

Still a Challenge

• Do not have the

necessary technologies

to be competitive

• Do not have integrated

solutions

• Do not have fully

implemented solutions

• Have non supportable

systems

• Inadequate training

Claims

Where You Could Be Today

Which Type of Model are you in Today?

Claim Capabilities

Efficient Claims Administration

Better Outcomes

Insight Improvement

Improved Customer Service

Emerging Business Model

Company 2 (Tooling Approach)

200 files per Adjustor

Company 3 ( Modernization Approach)

200-300+ per Adjustor

Company 1 (Legacy Approach)

100 files per Adjustor

Multiple loss reporting options available including self-service Inconsistent processes across reporting channels Automated assignment to field office or group based on claim characteristics Accelerated settlement options Primarily electronic claims files, resulting in claims portability Adjuster-set systemic diaries and alerts to drive workflow: also form-driven workflow Free-form notes in primary application Business rules coded into software Multiple systems in use involving rekeying Document generation at local level from templates and forms

Consistent experience in loss reporting, automated processes and self-service Automated assignment to adjuster based on claim dynamic and adjuster characteristics, including workload Real-time notification of coverage verification, claim set-up, and assignment STP Straight Thru Process ―once and done options Electronic claims files and claims portability Externalized business rules allowing updating by the business Automation of data-driven processing and workflow including alerts, diaries, fraud, voc rehab, reserves etc Sophisticated, outcome-based case management strategies Centralized document generation and imaging

Reporting through agent or call center Primarily manual assignment process requiring ―two touch‖ notification Limited point-of-service options Multiple requests for the same

claim data Physical claims files Manual activities and tribal knowledge‖ Multiple hand-offs in process Inconsistency across claim offices Local document generation and content management

© FINEOS CORPORATION

World of the FINEOS Claims Examiner

Expert systems

File notes

Work flow

Benefit calculations

Paper folders

Scanned documents

Email

Over payment

calculations Indexation

Partial earnings

Tax, Interest

Diary Word docs

Post-its

Checklists

Policy admin Provider

databases Letter templates

Where Could you be Today?

Your Data. Your Way. Wherever You Need It - Web, Tablet or Phone

Company Web Site Employer/Employee Site Claim Handler Web System

Claim Analytics

Analytics makes use of rich, broad and deep data to provide claims insight

Analytics by set . . . or by individual claim

Dashboard-style dials

Socio-demographic details

Graphic reporting details

Embedding Best Practice

Ability to embed best practice…

How it looks with FINEOS Claims Segmenting New Claims

Implement / refine automatic

segmentation rules to ensure right-

tracking of new claims based on

evolving claims dept. profile

Random Reviews

Implement active, (as opposed to

retrospective) claim reviews of key

claim decisions based on each

claims examiner’s experience

Managing SLA’s

Can you be certain that all

processes are as effective as you

want? Identify bottlenecks?

Driving Performance & Outcomes How do I know I’m getting effectiveness and value from my service providers?

Managing third parties and experts Third party experts have a vital role to play in the claims process How well can you manage: • Cost • Effectiveness • Performance • Workload How well do you understand the relationship of all parties in the process?

How it looks with FINEOS Claims

Which claims has this provider worked on?

Complete Automation / Auditability

Superior Customer Service

• Case Summary Timelines

• Case Maps

• Claim Activity Feed

• Alerts

• Multiple Communication Channels

• Self-Service

Case Study

Customer Success

Background

Challenges

The Principal Financial Group (PFG) offers Retirement and

Investment Services, Insurance, Health and Wellness, and Banking.

FINEOS Claims is used to manage Group and Individual Disability

Insurance (DI) and Group Life Insurance claims and payment

processes. PFG went live in 2005 for individual DI claims and

upgraded in 2008 for group DI and Life.

• Legacy systems with ‘dismal’ speed to market for new products

• Existing mainframe system not user friendly - use of codes

• Intensive manual processes requiring lots of paper claim files

• Systems not positioned to accommodate future growth

“FINEOS Claims has helped to streamline our ability to bring new

products to market. By intelligently routing and monitoring tasks,

FINEOS Claims helps us manage standard work practices and improve

the capture of data for analysis of trends, plan designs, and risks”

Doug Fick, VP & CIO Specialty Benefits, PFG

• 5% fewer staff needed to handle same

claims volumes due to online

documentation, automated payments,

reduced steps

and print mail

• Improvement in claims payment

accuracy due to automated & recurring

payments for STD

• Use of work manager and task list

• Decreased time to deliver new products

• Faster training for new employees

• Improved employee morale and

retention

Claims

In 2020

Future: It’s a Lifecycle Health Model

Health Promotion

Increase Fitness of Workers

Fitness Baseline

Health

Motivational Programs

Protect Work

Capacity

Create a Productive Culture

of Health and Wellness

Full Work Productivity

Risk Reduction

Reduce Onset of Chronic Disease

Reduce Sudden

Death Cases

Reduce Work Related Injuries

Working but Productivity

Impaired

Disease / Condition

Management

Reduce Impairment

Ratings

Control Medical, Pharmacy, and Ancillary Costs

Reduce

Presenteeism

Intermittent and Cyclic Lost Time or

Productivity

Leave Management

Compliance with Regulatory Laws

Tracking and

Monitoring of Absences

FMLA

Lost time between 3-5 days

Disability Management

Reduce STD Incidence and

Duration

Reduce STD Conversion

Reduce LTD

Incidence and Duration

Reduce WC Medical and

Industry Costs

Lost time greater than 26 weeks

Future: New Solutions

• Insured profile – Understands more about the insurance process

– Multi-lingual and currency

– Is becoming more of a partner in the funding model

– Technology motivated

• Medical profile – Electronic medical record

– E-Billing

– ICD10 and other more detailed coding

– Gene Map and DNA tailored medicine

– New medical treatments and therapy solutions that can cure (not just treat) conditions

– Improved RTW and early intervention

Service Expectations Continue to Increase

We like to track patients (Radio Frequency Tracker)

We like to track pizza

We like to track packages

We like to track phones

Online Experience is Changing

The future online adjustor & consultation

Home Rehab Options

$300 Dollar Solution

Beyond the Conventional House Call

RP-VITA Remote Presence Virtual + Independent

Telemedicine Assistant

Approved by FDA, Currently in production at several hospitals

TV Presence

Funny but not real

Social Media

• Social Media : Policy Provisions – Policy language around access to electronic communications, including

texts or social media postings

– Authorization to access public social media postings and the duty of the claimant to provide access to private postings that may be relevant to an investigation

• Social Media: Adjusting Strategies – Are investigators asking if any texts were sent, postings made, or photos

taken at or around the time of the incident concerning the occurrence of the claim?

– An entire new industry exists to assist the insurance industry to monitor a claimant’s social media postings 24/7

– As part of an insurance investigation, ask whether social media or electronic postings have social media or electronic postings been altered or deleted relative to the claim?

• Reputation.com

• Reputation Builder

Conclusions

• Current market is creating many challenges and opportunities

• Service levels and delivery model expectation of today will be exponentially larger three years from now

• Access to information and the amount of data analysis will increase to rates we have never seen before

• It’s a technology evolution, keep actively enhancing your solutions

• It’s about better access, outcomes, management, efficiency, and ultimately improved financials

• At the end of the process is a person - remove barriers that impact the well being, hope and desire of the individual to go back to work or lead a more productive life

• FINEOS as a company is excited to help insurers navigate through it as a partner with proven solutions and a constant eye to the future

Thank You

David Nicolai

david.nicolai@fineos.com

860-432-2618