Digital First Claims TPAs Positioned to Redefine the Market

Welcome to the latest instalment of “Examining Modern Claims,” a blog series from Xceedance head of claims Marc Rothchild. Below Marc highlights the key differences between a traditional and modern, digital first claims TPA.

Carriers value good claims management because it helps keep operations smooth and maintains good business relationships. A number of recent factors, from the rise in natural catastrophes and a simmering global pandemic to disruptions in the supply chain, have made claims management increasingly complex. Carriers, managing general agents (MGAs), and self-insured customers face numerous challenges with traditional claims third party administrators (TPAs), including:

• Data, Technology, and Operations: Claims data and technology transformation objectives are critical for all parties. TPAs that handle incoming first notice of loss (FNOL) and claims handling most often deal with legacy technology systems, resulting in limitations and slower than preferred enhancements. Solution delivery is often hampered by understaffed claims technology and operations teams and/or costly and inflexible technology architecture. Additionally, TPA staff, processes and systems might not be geared to handle multiple claims from different lines. Since loss data is not always accurately captured, carriers miss out on the chance to offer loss mitigation and direct repair at the earliest possible point, resulting in lost opportunity for cost savings.
• Consistency: Traditional TPAs often falter when it comes to consistency in claims handling. From different approaches to unique technology and data requirements, each client and line of business can present unique challenges.
• Account Communication: Traditional TPAs have been slow to adopt to new communication channels and tools, relying instead on outdated processes and systems. These inefficient, manual approaches can lead to delayed responses, complaints, increased litigation, and higher overall loss costs.
• Collaboration: Many traditional TPAs struggle to develop effective partnerships with the carriers they work with, due to lack of consistency in claims adjuster training and lack of adherence to reserving best practices.
• Pricing: TPAs typically strive to optimize pricing while ensuring high levels of service and caseload transparency with clients. Those elements can create misaligned incentives or inadequate rates, resulting in necessary price changes or account management that prioritizes cost savings over service, leading to negative impacts felt by the claimant, carrier and the TPA’s claims staff.

Next generation, digital first claims TPAs are different in many ways from traditional TPAs.

• Data, Technology, and Operations: By better leveraging technology and data, next generation TPAs offer policyholders a more personalized and streamlined claims handling experience. These digital first TPAs are also more adept at learning key lessons from data across the claims landscape to identify efficiencies and share best practices with clients.
• Consistency: Next gen TPAs utilize the available technology and tools to provide consistent services for clients across various lines of business and can play a strategic advisory role to their clients’ Claims, Underwriting and Actuarial teams.
• Account Communication: Next gen TPAs emphasize personalization and utilize seamless, digital communication tools to improve the policyholder experience and streamline the adjudication and handling of claims. Tools that automatically capture and accurately document claims communication increases the adjusters’ efficiency, saving them precious time and enabling them to be that much more responsive to the policyholders.
• Collaboration: Highlighting new and better ways to work together, and ensuring adjuster training is standardized, enables next generation TPAs to improve service, increase collaboration, and realize higher satisfaction with carriers.
• Pricing: By leveraging technology to realize process efficiency, standardizing data, and focusing on training, next generation TPAs are positioned to offer better service at a consistent price.

Learn how a digital first, modern claims TPA could benefit your organization. Connect with one of our claims experts for a demo.