To Cut P&C Claims Leakage, Start With Standardization

In their search to boost profits and reduce their loss ratio, property and casualty (P&C) insurance carriers often turn to improving a cast of “usual suspects”: sales, pricing, new product development and a host of operational areas from new business through subrogation.

But the biggest area to target— the one with the largest, near-term upside potential—is claims processing.

Every insurer wants to reduce operating costs, cut claims leakage and reduce claim severity.

But what’s the best approach? That depends on whom you ask.

Technology providers insist that bleeding-edge, massive new systems are the answer. Internal processing teams will push for more human resources—with more relevant experience and better training. Other executives will tell you to focus on reducing claims fraud.