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Claims Processing Optimization

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The Challenge

To shift the majority of claims reporting from faxes to phones, they had to determine how many staff are needed to take calls.

The Arena Solution

To better understand the effects any organizational changes would have on customer service, leadership turned to the company’s internal analytics department, the Analytics Resource Center (ARC).

The ARC investigated several advanced analytics techniques and recognized that the most effective way to test potential changes and their impact across variables would be to use a discrete event simulation model. They chose Rockwell Software Arena simulation software based on the recommendation of a consultant they had worked with on a previous project.

Arena simulation software allowed Westfield to experiment with various scenarios in a risk-free environment. Using current data, the software’s discrete event simulation shows how changes to one or multiple variables will affect all others.

“The ability to test sweeping changes without jeopardizing customer service was huge for Westfield,” said Quinn Conley, analytics professional for Westfield. “We needed to be prepared for the impact any modifications – small or large – would have on our customers and the company, and the Arena software enabled us to do that.”

The Westfield ARC began by mapping out the claims and billing processes, incorporating all business standards, staffing parameters and timing.

Next, the team worked with the CCC and claims management to gather all data needed to populate the model. Data included staffing hours and schedules, call times and lengths, percentage of abandoned calls, and number and time of claim arrivals per channel. Sources included system data, call records, and self-reports by staff and management.

All data was entered into the software. The analysts then coded the process and verified the simulation model over six weeks, which they then validated.

Once the model was finalized, the ARC tested a range of options. Through biweekly meetings with the CCC and claims management, they prioritized potential changes to be tested and confirmed. The animated visuals of the model proved to be crucial in communicating potential effects to management as scenarios were tested.

Results

Through repeated testing and experimentation within the simulation software, the Westfield ARC compiled recommended changes to processes and staffing. The first recommendation – and the one most surprising to executives – would decrease FNOL times.

Allocation specialists are responsible for assigning newly entered claims to individual adjusters. Previously they were working typical business hours and leaving after 4 p.m. However, the third-party data-entry vendor, used for faxed-in claims, was sending claims in the evening as well. This led to a bottleneck in claims processing.

Based on the software outcomes, management changed the hours of some specialists, shifting them to evening claims processing. Per the analytics team recommendations, the company also plans to bring data entry in-house. The team is testing ideal staffing and schedules.

Automating the adjuster-assignment process became another high priority when the software models showed it would provide the largest reduction in FNOL time. Once the new claims-management system is in place, the assignment process will be automated. All customers calling the center will know who their adjuster is and have his or her contact information by the end of the call. This change will also reduce the number of repeat calls from customers who have not heard from their adjusters.

Within the call center, the analytics team found that representatives who were trained to handle both billing and claims calls helped decrease call abandonment significantly. So Westfield made that change, and the company now trains all representatives to handle both.

Based on the models tested, the company is also prepared to staff accordingly as calls to the center increase over faxes, and as the company begins to offer triage services. The Westfield ARC has completed five major projects for the company using the Arena simulation software, and began its sixth in June 2014. The company has already seen the FNOL time reduced by over 50 percent, and expects to see additional reductions as further changes are implemented.

“Throughout the process, we could experiment with different requests almost immediately,” said Conley. “As further changes are made, we can update our existing models and continue experimenting with ways to improve our customers’ experience.”

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Background

Effectively managing insurance claims is a complex business, especially for a major carrier like Westfield Insurance. From the company’s rural roots in Ohio – formed in 1848 by a small group of farmers to protect their property – Westfield has grown into one of the nation’s 50 largest property and casualty insurance groups.

Today, about 2,500 people work for Westfield throughout the country. For nearly all of those employees, satisfying the customer is job one. That’s because the claims experience is a primary driver of policyholder satisfaction and loyalty. Policy owners expect a prompt and accurate resolution to their claims. With so many steps and variations in the claims process, insurers often need to re-evaluate how they manage staffing, technology and systems integration. The ultimate goal: provide an easy and efficient claims service experience for policy owners in the most cost-effective manner.