KPI of the Day – Insurance: # Insurance claim processing time
Measures the time it takes, on average, to process a claim, from initiation to a decision being made.
To indicate how efficient the insurer is solving claims, a determinant of customer satisfaction.
Claims processing is a laborious, time and paper consuming process, all of which makes it expensive. Reducing processing time will improve customer satisfaction and reduce costs.
# Insurance claim processing time is measured by the average time required to process a claim. The process implies all necessary steps from the initiation of the insurance claim to making decisions based on the data collected. Insurance claim processing times reflect on multiple aspects of performance.
On the one hand, they can indicate the level of company efficiency: how efficient the insurer is in solving claims. On the other hand, insurance claim processing times reflect on customer satisfaction. In this respect, time as a determinant, suggests a negative correlation between processing time and customer satisfaction.
As such, insurance companies are recommended to make claim processing highly efficient. This is also due to the fact that the task is laborious, time consuming and bureaucratic.
Different types of insurances may also require different approaches. Travel insurances, for example, are easier to claim as they have more generic conditions and well-defined criteria for reimbursement. Health insurances, however, may possess more specific terms and conditions, therefore more expertise and time may be needed during their processing.
In order to reduce insurance claim processing times, there are several steps that may be applied, such as:
- Digitized claim processing to save on time and costs;
- Lean and Six Sigma implementation programs;
- Outsourced claim processing to a third-party to increase efficiency.
Completed insurance claim databases can provide insight into the claim processing times. Integrated technological solutions can aid on the spot data gathering during claim processing.