ISO identifies 10 key factors to help combat rising costs of handling personal injury claims

  • Checklist based on feedback from insurance organisations

Insurance Services Office (ISO) Ltd, a leading provider of anti-fraud and personal injury claims solutions, has identified ten key factors that can help insurers reduce the rising costs of handling personal injury claims.

The ISO checklist was developed from the feedback of insurer customers involved in improving their claims management practices.

"Decisions on implementing any new personal injury claims system to help reduce claims handling costs can be a minefield unless a number of critical factors are considered carefully,” commented Lee Fogle, ISO’s Vice President of Claims Services. “This checklist identifies the critical factors that allow insurers to improve consistency and accuracy in claims handling and reduce their associated costs."

1. Early assessment means lower legal costs, which currently accounting for 40 per cent of claims costs, and better reserving
An early assessment of damages allows claims to be settled quickly and reduces administrative and legal costs, which commonly account for 40 per cent of claims costs. It is best to have a system that arms the claims handler with enough information to proactively manage personal injury claims from day one and make accurate offers as early as possible in the claims lifecycle. Such a system would also enable insurers to make more precise reserve estimates.

2. Quick implementation
Installing software can be a lengthy process fraught with implementation problems. However, systems are available on the market that can be installed easily and quickly. Max Carruthers, joint CEO, Rubicon, says: “In addition to providing our claims handlers with a desktop solution that is both intuitive and rich in functionality, the hosted software approach makes it quick to implement and easy to dovetail into our existing IT strategy.”

3. Need to cover other Heads of Damage as well as General Damages
To manage claims costs more effectively, managers need tools to be able to consider other Heads of Damage and not just General Damages. To do this, insurers need a system that records and allows claims handlers to consider other relevant factors such as legal costs and loss of wages – including future wage losses.

4. Ability to estimate rehabilitation costs and return to work potential
Getting people back to work following a serious injury is crucial as it reduces the cost for insurance companies and provides injured parties with opportunities for physiotherapy, occupational therapy, counselling and other treatments. Effective claims management relies on in-depth understanding of the injury and occupational details to generate an expected recovery profile of the claimant and rehabilitation programmes which allow the claimant to return to work as early as possible.

5. Rich reporting and audit trails provide critical management information
Among the claims handling solutions on the market, only the modern, object-based ones – and not the older generation rules-based technology, provide a true relational database that correlates data and comparative information to provide critical management information. Rubicon, for example, found that analytical tools integrated in an object-based solution enabled them to demonstrate best practices to their clients across their claims handling practices. Max Carruthers, joint CEO, Rubicon, says: “As a leading insurance services outsourcer, we need to ensure that we can demonstrate best practices across all areas of our business – after all, there’s no point in outsourcing unless you can provide an improved service and greater efficiencies.”

6. Medical coding
By adopting the International Classification of Diseases (ICD) injury classification standards, insurers can “talk the same language” as the medical industry. This helps to standardise settlements and improve consistency in claims management. Not only are ICD standards used by the NHS in the UK, but also widely used by healthcare insurers in the US and healthcare providers around the world. It is best to have an XML-based system to input the medical data easily – in the same industry-standard format – into the claims solution.

7. Medical encyclopaedia
Claims handlers aren’t doctors. Providing claims handlers with both an encyclopaedia of body parts and an understanding of different types of injuries and explanations regarding the severity of specific injuries with graphical illustrations and animations alerts them to possible complications and costs. Chaucer, for example, implemented a comprehensive database and medical encyclopaedia of over 18,000 medical conditions and 14,000 occupations that allowed their claims handlers to get the same level of information and detail as medical reports. This enabled more accurate first time offers, better identification of which cases would benefit most from rehabilitation such as physiotherapy, and more informed negotiations with solicitors. Nick Burnap, Chaucer Insurance’s Claims Director, says: "If a claimant had a particularly serious injury but hadn’t received the recognised treatment to make a complete recovery, the system will highlight this and prompt the claims handler to ensure the claim is consistent with the injury."

8. Motor Liability, Employers Liability and Public Liability
It is important not to implement a system that has specific information on injuries for handling only motor accident claims. A broad-based robust system should be designed to handle a wide range of conditions – not only soft tissue injuries, but also those more likely to occur in the workplace or in public places.

9. The CRU link

Notifying the Compensation Recovery Unit (CRU) can be a lengthy administration process involving re-keying basic data, which leaves room for error on behalf of the insurer. Having a solution that automates the notification stage through an e-link that informs the CRU electronically improves claims administration by saving time and resources, and allows for more effective personal injury claims management.

10. Web services integration - .Net ready

Web services integration enables insurance companies to deploy their personal injury claims solution rapidly with a low initial investment and integrate with other .Net systems across different platforms, applications, and programming languages throughout their IT infrastructure.

About ISO Claims Outcome Advisor™ (COA):
ISO Claims Outcome Advisor™ (COA) is the industry’s first personal injury claims management solution that manages the multiple dimensions of organisations’ personal injury claims portfolios. COA understands the severity and recovery implications of over 18,000 medical conditions — including injuries, treatments, complications and pre-existing conditions — and 14,000 occupations. COA helps claims handlers, managers and actuaries manage the unique and complex medical, legal, and occupational issues presented by personal injury claims, and helps ensure appropriate financial arrangements are agreed to and implemented. Claims handlers can manage all aspects of a case from first notice of loss to return-to-work plans, rehabilitation and damages.

About ISO:

Insurance Services Office (ISO) Ltd, is the UK subsidiary of Insurance Services Office, Inc. Insurance Services Office, Inc. is a leading provider of products and services that help measure, manage and reduce risk. ISO provides data, analytics and decision-support solutions to professionals in many fields, including insurance, finance, estate agency, health services, government and human resources. Professionals use ISO's databases and services to classify and evaluate a variety of risks and detect potential fraud. Around the world, ISO's services help customers protect people, property and financial assets.  ISO's customers in the UK include Admiral Group, AXA Insurance, Chaucer Insurance, Highway Insurance, Lloyd's, Rubicon Corporation and Zurich Financial Services. For more information on ISO products, contact ISO at info.uk@iso.com, or visit ISO at www.iso.com.

For more information please contact:

Mark Strang
ISO
Tel: 01252 761055
mstrang@iso.com

Manuela Whittaker
IBA – PR for ISO
Tel: 01780 721433
mwhittaker@iba-europe.com