a. IT offers many benefits, but there are also difficulties when using IT. The general aim of using IT in claims systems are:
i. IT can be used to reduce the cost of claims administration.
ii. IT can also be used to improve the service offered to the client.
b. The main Benefits of using IT in a claims handling system are:
i. Single data entry, avoidance of duplication as well as less manpower in the data processing, fewer errors.
ii. Reduced use of paper files, quicker distribution of data, sometimes more than one insurer is involved. For example, in
Lloyds, files are shared among managing agents electronically. Some general insurers no longer use paper files.
iii. Quicker claims settlement – as the information above is distributed faster.
iv. Electronic authorization of claims payments – this speeds up the claims settlement process, less paperwork involved,
less bank charges and unnecessary re-entry of data, the electronic printing of cheques and bank transfers .
v. Increase in communication channels – emails, social media and live chat (quicker communication, greater customer
service and more efficient claims handling).
vi. Portals and Extranet services allow customers to self- serve and obtain real time updates on claims status.
a. The main Benefits of using IT in a claims handling system cont’d ( other less tangible or associate benefits for insurers hoping to gain a competitive edge):
i. More customers retained is the company’s hope, due to the improved IT service.
ii. Technical assistance and or advice can be given to the claims handler via the IT system (prompts or tactics to use).
iii. Streamline administration – using databases for replacement goods.
iv. Allocation of appointments by the computer system based on priority or date of notification.
v. Automatic checking for fraudulent, exaggerated or repeat claims
vi. Automatic payment of loss adjusters’ fees.
b. Difficulty in using IT:
observation. Personal service may be reduced, removing flexibility and initiative.