Overcoming a high volume of insurance claims with a new approach
An unexpected spike in claims activity can spell difficulty for even the most experienced claims handling teams. That was the challenge faced by James River Insurance Company—an A.M. Best A (Excellent) rated excess and surplus lines insurance carrier headquartered in Richmond, Virginia—after it won a fast-growing national account with thousands of commercial auto exposures. Let’s take a closer look at how James River was impacted and how, with the help of ReSource Pro, it was able to overhaul claims quality and processing time.
CHALLENGE: STRETCHED STAFF AND ACCURACY CONCERNS
After acquiring a promising new account, James River initially saw low monthly claims volumes, but as the client’s business grew, so did the frequency of claims. By month three, claims volume had increased 100x.
To handle this spike in activity, James River began hiring 50 new staff per month, yet still struggled to keep up. As a result, staff who were working to fulfill service level agreements had less time to devote to claim investigations, potentially impacting accuracy and timeliness of settlements.
As the business continued to grow, accounting and reconciliation became challenges as well. James River saw a surge in payments, expenses, and subrogation related transactions. This drove discrepancies between the accounting ledger and payments in claims files, forcing the team to spend twice the usual time to reconcile the ledger.
The increasingly stretched claims staff heightened the risk of low employee morale, incorrect payments, challenges with quota share reimbursements, reputational damage, and litigation.
SOLUTION: CLAIMS HANDLING AND QUALITY ASSURANCE
Recognizing these issues, James River approached ReSource Pro to determine a new method of claims processing. First, a dedicated ReSource Pro team assumed responsibility for claims setup and manual payments, freeing up James River adjusters to focus on claim investigation. Next, the partnership addressed claims quality assurance (QA), which had been identified as another drain on the James River teams. “We can’t afford to lose claims adjusters to do QA,” said James River Claims SVP Courtenay Warren.
Within a week, the newly defined QA process went live, allowing James River to quickly meet the established service level agreements. The QA team provided insight into the accuracy of the work, enabling James River to analyze quality levels and capacity needs more clearly.
As part of the solution, ReSource Pro handled all claims auditing and provided James River with relevant reporting to fulfill obligations to clients and identify opportunities for improvement.
THE IMPACT: 100X BOOST IN QUALITY AND REDUCED PROCESSING TIME
Within 60 days, ReSource Pro reduced the claims processing error rate from 3% to 0.03%, a 100x improvement.
“ReSource Pro was able to process faster, cheaper, and with fewer errors than we were able to do internally,” Warren said.
Throughout the process, ReSource Pro collaborated with James River to establish best practices to improve process efficiency and drive continuous improvement. The team embedded automation technology and lean process management practices, decreasing claims processing time by 40 hours per month or 4%.
“ReSource Pro continues to be valuable business partner. They complement our strengths.”
–Richard Schmitzer, CEO of James River Insurance
By working with ReSource Pro to integrate people, process, technology, and data across their claims environment, James River was able to:
- Optimize reserving
- Redeploy staff for improved outcomes
- Exceed client expectations and meet service level agreements
- Create and maintain a work environment in line with the company’s culture
With ReSource Pro as a partner, James River successfully scaled a claims department to meet the demands of a fast-growing client while avoiding burnout in their internal team.
“Resource Pro is able to scale or shrink quickly in response to the needs of our business,” said Richard Schmitzer, CEO of James River. “ReSource Pro continues to be valuable business partner. They complement our strengths.”
Contact us to speak with an expert. Visit our Claims Handling page to learn more about ReSource Pro’s approach to improving carrier operations. Check out our other resources:
Best Practices for Developing an Automation Mindset Across an Organization in Carrier Management