Implementation of the whiplash reforms has officially been postponed to April 2021, a one year delay to the original planned 2020 go-live date. With many insurers still working to ensure claims handling solutions fully integrate with the new portal and fulfil new data capture requirements, this is no doubt welcome news for some.
Despite the delay and ongoing disruption caused by COVID-19, this is not a time to pause planning and implementation. Crucial questions remain over whether insurers have the in-house capacity and expertise to develop truly fit-for-purpose solutions, or if they should opt for an industry partner to deploy an off-the shelf solution.
A ‘build your own’ approach may be seen as an attractive way of retaining control over projects and systems – yet buying in a solution will provide insurers with contractually guaranteed high service levels and avoid introducing silos of older technologies.
Stricter reporting means advanced data capture is essential – not a luxury
There’s already much informed discussion on how the whiplash reforms will have a far-reaching impact on claims trends, handling processes and data reporting procedures.
The reforms introduce a new dedicated portal for small track personal injury claims – Official Injury Claim – which also mandates medico-legal reports for each claim. As with the existing Claims Portal, much of the detail available in the portal cannot be captured in today’s claims administration systems, with some of the now-mandatory data currently found in unstructured documents.
In addition to all this, insurers must report to the Financial Conduct Authority in three years on how the reforms have impacted their business. Many insurers currently do not capture, store or analyse such granular premium and settlement data, and do not have the capability to do so within their existing claims systems.
It is vital that insurers act now to address these requirements and avoid critical business disruption, with tried and tested systems fully operational and integrated with the new portal before 2021.
Shouldering the burden through in-house development
Developing a suitable claims management system internally may seem an appealing strategy, with the option to use in-house expertise to develop a tailored solution that can easily integrate with other existing systems.
However, this demand for in-house or contracted talent comes at a time of significant business disruption and needs to be tempered with the ever-widening skills gap in the industry. PwC’s latest CEO survey revealed the skills shortage has become so acute, over half of insurance leaders felt it had prevented them from effective innovation. Diverting large amounts of limited in-house resources into such a project also increases the chance of neglecting more customer-facing or business-critical work.
Pitfalls and teething problems to be overcome before the deadline
In-house development projects are not only at risk of time and cost overruns but are also vulnerable to the impact of ongoing updates or new portal releases, which could effectively disrupt operations overnight.
Any system built from scratch runs the risk of failure during development. There’s testing, validation and lengthy onboarding if the user experience is unsuitable. If a severe setback occurs in any of these, insurers will no doubt be left scrambling to meet the deadline and more importantly, find themselves significantly behind the curve of competitors who have opted for a ready-to-go solution.
Full ‘off-the-shelf’ integration means ready and raring to go
The alternative to a lengthy and uncertain development lies with proven insurance technology providers who have already successfully developed claim management systems – specifically designed to integrate with industry portals and other third-party services to ensure all claim interactions can be handled within a single platform. They use Application Programming Interface (API) ‘calls’ that exchange updated data and provide work queue management to streamline workflows.
Verisk’s Claims Outcome Advisor (COA) platform, for example, can be tailored to specific integration requirements. COA incorporates a powerful Application to Application (A2A) link with the Official Injury Claim portal using APIs and has already demonstrated this integration success with the existing Claims Portal.
Complete with medical assessment reporting
These ready-to-go solutions also routinely provide add-ons to further enhance the core product. To fulfil the medico-legal report processing, a dedicated medical assessment component will help with capture and tracking of detailed medical information for complete reporting on each small value personal injury claim.
Deployable in weeks
One of the key differentiators for this approach is agility. A core solution can be fully deployed in weeks, with further components installed within days – compared to a lengthy in-house development pipeline.
Insurers will immediately gain access to powerful data capture and analytics features to identify evolving claims trends and behaviours, and more accurately measure and report on the reform’s business impact. The core management solution can help quickly settle claims within pre-defined criteria, using automated capabilities to ensure minimal handler involvement where possible, allowing resources to be focused on the most complex cases.
Opting for established industry partners with solutions supporting the full lifecycle of a claim will unlock further opportunities for integration. The Verisk Hub links COA with systems such as the Government’s Compensation Recovery Unit and defendant solicitors for greater data enrichment, reduced re-keying and streamlined case progression and notification.
The time to act is now – there’s more to come
The new portal will fundamentally change the way low value personal injury claims are handled, while the three-year FCA reporting burden will build up until the deadline, threatening to pile on the pressure of a vast data extraction and analysis operation. Planners must not take their foot off the pedal for their implementation strategy.
Get ahead of the competition
Many insurers are already pushing ahead with deploying new claims management solutions and also seizing the opportunity to introduce advanced technologies such as automation, AI and chatbots to further refine their operations.
Partnering with proven industry experts such as Verisk will help insurers stay ahead of this curve, unlocking access to a solution that is highly flexible to requirements, is continually refined and backed by a wealth of industry data.