Claim Audits…How The Numbers Add Up
Worst-case scenarios sometimes happen. Having risk management plans, operational processes and a systemic approach to recording and managing a potential claim incident if and when it occurs is a best practice for any business.
The International Risk Management Institute (IMRI) defines a claims audit as “A systematic and detailed review of claims files and related records to evaluate the adjuster’s performance.”1
Claim Audits – The Qualitative Approach
More specifically, IMRI explains that qualitative claim auditing involves “the comprehensive review of claims files that seeks to discover whether the claims are being appropriately managed. Some of the criteria used to measure the quality of the claim handling being delivered include experience and skill level of the adjusters, and effectiveness of the internal communications system.”2
Quantitative vs. Qualitative Claim Audits
While qualitative claim auditing brings invaluable insights into an insured’s claims experience, the more frequently used method to audit claims is based on quantitative data. Common quantitative measures may include factors such as:
- Response time from initial claim
- Days to close
- Total cost in relation to the original reserve
Top claims adjusting firms use a variety of additional time and financial parameters to track and maintain standards. While it’s debatable as to whether qualitative or quantitative measures are more important, ALIGNED believes both are critical. Using both types of measure in combination can help ensure clients have a positive overall experience.
To learn more about claim audits or claims adjusting in general, we would encourage you to speak to a licensed insurance adjuster or contact the Canadian Independent Adjusters Association.
We’d love to hear about your organization’s good or bad claims experience and encourage you to share with an ALIGNED Insurance Advocate.
1, 2 IMRI.com