Poor claims management incurs an unnecessary financial loss when not investigated in a timely or accurate manner. Third-party claims usually incur high costs to a business, as they tend to be time-critical, resource-intensive and commercially sensitive.
Some of the challenges faced in claims management include:
- Lack of information.
- The inability to resolve claims efficiently will inevitably lead to financial write-offs.
- Customer dissatisfaction.
Claims Management is a vital part of the relationship between a CSP (Cash Service Provider) and its clients.
Transparency Between Cash Service Providers and Their Clients
Providing data on claims positions through an agreed investigation and control infrastructure maintains the service’s credibility between both parties.
Therefore, it is incumbent on the CSP to ensure that their client attains enough assurance and accuracy of their control environment and the validity of the claims activity and investigations performed.
However, the client must also provide confirmation or otherwise on any reported position provided by the CSP. This is critical as part of the communication process between the client and the service provider.
Unfortunately, this is not always forthcoming and causes problems, particularly if discrepancies or losses go unidentified due to a lack of communication from the client.
This issue generally arises due to inadequate communication and control processes between the CSP and the clients’ SLA agreement.
The best management of this is to ensure a contractual obligation on both sides to provide relevant data and confirmation. Where this is not possible, a ‘negative’ confirmation will provide an element of protection to the CSP.
For example, it may stipulate that unless advised otherwise, if no confirmation is received within a specific timeframe, the position reported by the CSP is assumed correct.
Including such a statement makes it challenging as the onus for promptly identifying such issues resides with the client.
Of course, given contractual obligations, enforcement of such a position can be problematic in the event of a significant loss. However, it does set a baseline to ensure both parties obligate to maintain a successful business relationship.
The Importance of Robust Claims Management
Many companies, individuals or businesses often reach out to advisors or insurance companies for their claims management services as claims management is a heavily cumbersome process and involves in-depth communication and strict management of paperwork.
While it may be easy to underestimate claims management’s importance, it is problematic. Handling claims effectively is critical. Ignoring parts of the process or treating it as a menial or inefficient task could lead to severe outcomes. Claims management has some essential aspects. With a brief look at these, it becomes apparent how the process should be a core concern for any healthy service provider relationship.
Claims Handling used to be an incredibly lengthy process involving monotonous tasks and juggling masses of paperwork. With the tools and technology available now, whether claims management software or reconciliation suites, the entire process can be streamlined or even automated. By moving away from old working methods and embracing new technology, claims management can be an almost effortless procedure.
Customer relationships are a vital part of the entire process.
Innovative Technology to Improve Claims Management
Faster ways of working and automated options have only pushed customer expectations to an all-time high. Trouble-free and lightning-fast timeframes are now the norm, and underperforming in this area is a risk.
Such technology improves efficiency in claims handling by making the entire process streamlined and customer-friendly whilst increasing general customer satisfaction. These technologies enable customers to interact and communicate with their providers whilst expediting the whole claims process and the problems they bring.
An effective claims management process should use a system or software to automate a multitude of tasks (e.g. payments and communication), saving time and money.
Human error is a prominent issue in claims management and is often intertwined with fraudulent claims. However, using claims management software effectively reduces the likelihood of human error in most processes within claims handling. These errors are often time-consuming, expensive and difficult to correct. Automating these otherwise manual tasks limits the chances of human error compromising the claims process.”
Importance of Service-Level Agreement (SLA) Between Service Providers and Clients
A service-level agreement (SLA) is a contract between a service provider and its customers that documents what services the provider performs and the standards obligated to meet.
A service-level commitment (SLC) is a broader and more generalised form of an SLA. The two differ because an SLA is bidirectional and involves two teams. In contrast, an SLC is a single-directional obligation that establishes guaranteed expectations to customers at any given time.
Why are SLAs critical?
Service providers need SLAs to help them manage customer expectations and define the severity levels and circumstances under which they are not liable for outages or performance issues. Customers can also benefit from SLAs. These contracts describe the service’s performance characteristics, which can be compared with other vendors’ SLAs, and set forth the means for redressing service issues.
The SLA is typically one of two foundational agreements service providers have with their customers. Many service providers establish a master service agreement to establish the general terms and conditions in which they will work with customers.
The service provider’s master service agreement often references the SLA. Between the two service contracts, the SLA adds greater specificity regarding the services provided and the metrics used to measure their performance. Service commitments define services included with the service offering.