Ventiv Technology

The Essential Guide to Claims Technology in a Changing Environment 21 C H A P T E R 7 : F I N A N C I A L S Best Practices for Setting Case Reserves Organizations should look to close claims quickly and come to the final claim value as soon as possible. The longer a claim stays open, the more significant the financial risk to the organization. While open claims vary in length of time, the majority close within a few months. To accurately determine reserves, adjusters need to consider all facts and circumstances surrounding each particular claim. This can include: • The nature and extent of the injury • Demographic data relating to the claimant • Employment information • Indemnity benefit data • Liability sharing factors • Medical information • State-specific information pertaining to the particular jurisdiction Best practices should involve adjusters encompassing all future payments of a claim until it is closed (also known as ultimate cost). As all relevant information must be considered, receiving timely and accurate data can help the adjuster ensure the reserve is not overstated or understated. To reduce the time an adjuster spends on each claim, the information needs to be easy to input into the system, and quick to update further down the line. One practice that should be avoided, particularly common with inexperienced adjusters, is stair- stepping. Stair-stepping involves frequently increasing the reserve in small increments to cover payments that are due. Adjusters should avoid this method at all costs as it overstates the organization's financial position. How the Right System Can Get Reserving Right Historically, adjusters were required to read and update claim notes to understand what is happening across the life of a claim. While all the information was stored in one place, claim systems were outdated and made searching for specific claim situations and producing reports extremely time-consuming. The emergence of new technology can help organizations improve their claim handling and facilitate more accurate claim reserves with a focus on efficiency. Using pre-defined data fields, adjusters can capture and store critical information maintaining consistency and precision across the board. Today's systems deliver readily available claim information, quick and accurate reporting with the ability to spot trends and address any concerns proactively. Organizations shouldn't solely rely on pre-set data fields. Claim notes still play an essential role as they capture further information that provides adjusters with the full picture of a complicated claim. For best practices, organizations should use a combination of data fields and claim notes, with reduced reliance on the latter. However, claim organizations will need to find the right balance to facilitate complex claims while improving operational efficiency. Adjusters are best supported by a system with advanced document management with an integrated workflow allowing the attachment of any electronic file.

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