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Business – Claims Leakage

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Potential reasons for leakage in an insurance claims process.

Fishbone template on claims leakage

Claims settlement solely depends on the efficiency of claims management. Claims leakage is the loss that an insurance company suffers over an unoptimized finalization of a claim. It is the excess amount the insurer paid to the claimer, which the client was not entitled to. Leakage poses a serious threat for insurers. Claims leakage imposes a hindrance to productivity, revenue and customer experience. Preventing leakage in a claim settlement is quite a difficult task for the insurers. There are many causes for claims leakage. Retrieving lost money is not very easy. The causes can be procedural, such as from inefficient claim processing or improper/ errant payments. It can be human error, such as poor decision-making, customer service, or even fraud. CL is often discovered through an audit of closed claim files.

Claims Leakage
Technology

  •         Inefficient use of data
  •         Lack of automation
  •         Legacy systems

Environment

  •         Missed recovery
  •         Insufficient review process
  •         Lack of claim documentation

  Process

  •         Focus on customer satisfaction
  •         Increased workload
  •         Less time

People

  •         Unable to detect fraud
  •         Poor decision making
  •         Wrong loss estimation

  Others

  •         Audits after settlement
  •         Lack of claim supervising
  •         Guess work

Fraud

  •         Unable to predict duplicate claims
  •         Ineffective workers
  •         Disloyal customers

This fishbone is a methodical root cause analysis that shares ideas about steps and conventions of cause analysis for other or similar problems. We have adopted some protocols while organizing the different parent and child causes.

Who should use the Claims Leakage template?

  • This template is surely a great help for any person who wants to know the causes for claims leakage. We invite all interested persons to explore our template repository. Your collaboration will enrich our knowledge and power.

Why use this template?

  • This template lists out most of the important factors that affect the claim settlement process or are responsible for claims leakage.
  • Makes incident analysis promising, simple and easy to comprehend.
  • Craft your template or reuse this with some modification for cause analysis of other problems in smartQED.

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