Case Study / A workplace health insurance provider
LSI was engaged to review the level of claims leakage within our clients Contents claims as part of a wider leakage programme across multiple classes of business. Claims leakage is defined as the overpayment or under collection of a claim and/or the existence of inefficient or non-value adding processes.
Examples of claims overpayments include:
Excess not deducted
Payment not covered by policy
Duplicated payments
Fraudulent claims
Examples of claims under collection include:
Recovery opportunities not identified
Recovery abandoned prematurely
LSI provided our client with a report with the leakage issues identified, supporting analysis and insights.
13.9% claims leakage worth $7-8 million for the annual claims population
A number of key issues were identified across policy application, claims management and recovery to give insight to client about where improvements could be made
The claims leakage analysis involved a review of contents claim files, selected from a sample of the closed claims population. The intent was to define the level of overpayment or under collection of claim costs. In total, 200 files were reviewed during the exercise. A detailed questionnaire was used to address the key aspects of the claims management covering:
The approach utilised a cloud-based leakage assessment tool to review, approve and report on leakage incidents. Each claim was reviewed by our client and then a second review was undertaken by LSI before reaching agreement on the claim findings.
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