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Gaining clarity: The rising importance of claims visibility in risk management

Amid ongoing complexities in the global risk landscape, organizations face multifaceted challenges that can complicate their claims processes and broader risk management strategies.

Amid ongoing complexities in the global risk landscape, organizations face multifaceted challenges that can complicate their claims processes and broader risk management strategies. As the cost of claims rises, businesses cannot afford to operate with opaque claims programs.

Visibility into the root cause of claims costs — paired with the ability to harness insights from claims data and maintain ongoing oversight into claims programs — is not merely advantageous but essential to organizational growth and resilience. Here, we explore trends in the current global claims environment and three reasons why claims visibility is integral to risk management.

Complex risks influencing the claims environment

The global claims environment is influenced by a host of interconnected risks, with claims inflation at the forefront. Social inflation characterized by larger jury awards and settlements — especially in the US where there tends to be a more litigious environment than in other regions — plays a crucial role in this phenomenon. This trend has contributed to the rise in frequency and severity of claims, as well as greater financial exposure for organizations.

Additionally, the interplay between social inflation and other risks, such as shifts in the geopolitical environment including tariffs, add complexity to the claims landscape. These uncertainties can disrupt global supply chains and regulatory environments, resulting in unexpected losses, increased reserve accrual, and higher premiums as insurers adjust their pricing models. Cumulatively, these challenges can make it difficult for organizations to secure adequate coverage and mitigate future claims.

Regional differences in claims management

In the US, where workers’ compensation is mandated, except in Texas, workers’ compensations claims are a significant consideration. The UK, however, does not have this scheme; instead the Employers’ Liability Act enforces that employers have insurance to cover their liability for injuries or illnesses suffered by employees. Hong Kong and New Zealand are among other regions where workers’ compensation is not mandatory in the same way as it is in the US.

The value of greater claims visibility

In today's rapidly changing risk environment, the ability to maintain consistent visibility into your claims and anticipate future challenges is crucial. Below, we explore three strategic advantages of claims visibility.

Centralized claims experience

Many organizations receive disparate spreadsheets from multiple insurers, making it challenging to gain a comprehensive understanding of their claims landscape. This fragmented approach can lead to inefficiencies and missed opportunities for improvement.

By centralizing claims data, organizations can access an aggregated view that reflects their claims experience across multiple years, carriers, and third-party administrators. This consolidated perspective can help risk managers to identify trends, pinpoint areas of concern, and develop targeted strategies for mitigation.

For instance, a major manufacturer may discover that back strain injuries are costing them over one million dollars annually by looking at an aggregated view of their data. Equipped with this centralized perspective, the organization can work with their risk advisor to implement ergonomic solutions, potentially reducing claims costs and improving employee wellbeing.

Data-driven insights

Access to accurate and consistent claims data is a non-negotiable in today’s risk landscape. This data serves as the foundation for informed decision-making, better enabling organizations to navigate uncertainties effectively.

For instance, the introduction of electric vehicles (EVs) brings forth a range of new risks and opportunities that organizations must address. One concern is the increased repair costs associated with EVs. The advanced technologies integrated into these vehicles can lead to lengthy repair times if damaged, often necessitating the replacement of entire components rather than simply repairing the affected areas. This complexity has heightened the level of expertise required for repairs, which requires the availability of more skilled workers. Additionally, supply chain issues are causing further delays, resulting in higher costs stemming from extended vehicle hire periods.

By analyzing claims data alongside other relevant information — such as accident reports, repair costs, and customer feedback — organizations can develop a comprehensive understanding of these risks and begin creating tailored action plans.

Moreover, maintaining consistent access to updated claims data is vital for organizations aiming to remain agile and responsive. The continuous flow of information helps ensure that decision-makers are equipped with the latest insights, enabling them to proactively adjust their risk management strategies in light of emerging trends and challenges.

Enhanced risk approach

Merely possessing claims data or centralized oversight into your claims program is not enough to effectively manage risk. Working with a risk advisor, organizations can analyze this data and extract insights to:

Uncover recurring trends and patterns
Determine the claims that will likely incur the highest costs
Implement meaningful changes to optimize their claims program

Consider the EV example again. If organizations have identified specific vehicle models, accident scenarios, or geographic regions that exhibit higher incident rates, they can then work with their risk advisor to develop targeted interventions that address blind spots within their operations. Solutions may include implementing enhanced driver training programs, establishing improved maintenance protocols, or forming partnerships with charging infrastructure providers.

Additionally, effective claims management and data analysis can empower organizations to quantify their future savings potential. By investing in advanced claims solutions that allow for tracking return on investment (ROI), organizations can see how proactive measures manifest as a reduction in their total cost of risk over time. This data-driven approach not only enhances decision-making but also fosters a culture of continuous improvement.

Manage risk with confidence

Claims visibility empowers organizations to consolidate fragmented data and gain a comprehensive understanding of the root causes of their claims costs as well as their overall claims landscape.

Blue[i] Claims consolidates claims data from carriers and third-party administrators into an intuitive dashboard, enabling real-time visualization of cost-saving opportunities and enhancing risk management strategies. Its benchmarking capabilities allow users to compare claim outcomes with peers, identify excessive costs, and gain insights into high-impact drivers of claims, facilitating early intervention and improved claims triage.

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Gaining clarity: The rising importance of claims visibility in risk management

Complex risks influencing the claims environment