Best Practices in Annuity Claims

Survey Analysis and Case Studies
by Tom Scales,  Karen Monks, June 5, 2015
Case Studies
North America

Abstract

Celent surveyed and interviewed key North American insurers on their claims technologies and internal processes. The report shares the findings, with a particular emphasis on investment in the claims area and the underlying staffing and effort involved.

In the report Best Practices in Annuity Claims, Celent conducted in-depth interviews with the leadership of 12 claims organizations, representing nine insurers. These interviews were augmented with surveys to a broad range of insurers.

Celent’s goal was to support, or disprove, the following hypotheses:

  • Life insurance companies typically underinvest in technology for claims compared to operational areas responsible for revenue generation.
  • Operational best practices are not as mature in claims as they are in other operational areas.
  • Unique differentiators between insurer claims organizations are fairly rare.

The analysis in the report includes key metrics such as volumes, staffing, and the time to service a claim. The report also details key technology choices, future project plans, and the insurer’s use of web and self-service technologies.

The companies interviewed were concentrated in Tier 1, and their claims volumes ranged from 9,000 per year to more than 45,000 per year. In total, the insurers interviewed represent over 96,000 annual annuity insurance claims. The claims teams ranged from 9 to more than 110.

“The surveys and interviews tended to support our initial hypotheses, with some interesting variations across the companies,” says Tom Scales, a research director with Celent’s Life and Health Insurance practice and coauthor of the report. “We’re pleased with the level of participation and the openness with which the insurers shared their information.”

“There is so much room for investment in claims. It is a compliment to the claims teams that they excel in providing service with the limited investment in technology,” says Karen Monks, an analyst with Celent’s Life and Health Insurance practice and coauthor of the report. “We were able to make suggestions to each participant on areas in which they should focus their investment.”

The report and its companion, Best Practices in Life Claims, are the first in a planned series of reports covering distinct operational areas within insurers.

This 46-page report contains 18 figures and 8 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

4

 

Report Method

5

Annuity Claims Survey Results and Analysis

7

 

Demographics

7

 

Metrics

8

 

Technology

11

 

Claims Process Automation

12

 

Digital Initiatives

15

 

If You Could Change the Process, What Would You Do?

16

Case Studies

17

Case Study Summary

19

Claims Operations Observations

21

Opportunities for Improvement

23

Appendix 1

25

 

Claims Process Automation Charts

25

Appendix 2

30

 

Life Claims Company 1

30

 

Life Claims Company 4

32

 

Life Claims Company 5

35

 

Life Claims Company 6

37

 

Health Claims Company 7

39

 

Life Claims Company 8

41

 

Life Claims Company 9

43

Leveraging Celent’s Expertise

46

 

Support for Financial Institutions

46

 

Support for Vendors

46

Related Celent Research

47

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