The Insurance Claims Handling ES bundle handles two important functions relating to insurance claims:
- It enables companies to provide authorized employees and third parties with access to insurance claim information, providing access to just the information that such users require and no more.
- It offers a way for insurance companies to automatically send or receive a First Notice of Loss (FNOL) or First Report of Injury (FROI) from most notice-of-loss service providers or agency management systems and seamlessly transform it into a claim notification.
Providing Access to Insurance Claims
An insurance claim is complex, with the potential for many related documents and items of correspondence. As a result, a number of parties may have interest in reviewing all or some of this information. In the past, it was not easy to provide such access; looking up a claim typically involved a call to the claims deposit. But using the services in this ES bundle, insurance companies can offer fine-grained access to claim-related information. An insurance adjuster, for example, could be set up with access to portions of the claim that are relevant to his tasks; the composite application would display only those portions of the claim that are accessible to those who have been assigned the role of adjuster. An insurance salesperson might be out on a sales call and be asked to look up claim information. A member of the sales staff could be given access to claim information that is greater than, for example, an independent agent might have. The insurance claim business object has more than 500 fields to which access can be provided – or not – based on the user's role. In this way, the Insurance Claims Handling ES bundle offers convenient access to just the right amount of data to just the right users, streamlining the claims handling process and handling privacy-sensitive data in an appropriate way.
Insurance Claims Handling (click to enlarge)
Filing First Notice of Loss and First Report of Injury Documents
The Insurance Claims Handling ES bundle also helps companies streamline processes around sending and receiving a First Notice of Loss (FNOL) or First Report of Injury (FROI) using industry standards.
Accepting a First Notice of Loss or First Report of Injury is an important part of the process to see that insurance companies have satisfied customer needs and meet statutory deadlines. The ability to take the data in from external sources quickly and efficiently enhances the speed and accuracy of the process.
This enhanced process helps lower costs, shorten customer response time, and eliminate data entry errors. It can be used to cover claims notifications received in cases of worker's compensation, automobile insurance, personal liability insurance, and homeowner's insurance. In cases of a loss or injury, an insured party can request compensation from an insurance company. After a loss event, an insured person (or claimant) informs the corresponding insurance company about the loss or injury using an FNOL. After an injury on the job (in the case of workers' compensation), an insured party informs either someone in human resources at his company or a risk manager at his employer's insurance company, and an FROI is submitted. In both cases, this notice is the starting point for the management of an insurance claim.
The Insurance Claims Handling ES bundle utilizes ACORD XML, a property and casualty industry standard that provides a means of real-time data exchange between producers, insurers, rating bureaus, and service providers.
How This Bundle Leverages Enterprise SOA
The Insurance Claims Handling ES bundle leverages enterprise SOA by extending the functionality of SAP Claims Management, an application of SAP for Insurance, to achieve connectivity with third-party systems and enable more people within a company to utilize the back-end system.
SAP Claims Management is a flexible application that supports the full life cycle of claims processes for the property, casualty, and health insurance businesses. It can help automate straight-through processing of simple claims or provide insurance-industry workers with the tools they need to process more complex claims.
It should be emphasized that this ES bundle handles only claims-related functionality of the SAP Claims Management solution. Related ES bundles handle other functionality, including processing applications and issuing policies (Insurance Policy Issuing and Underwriting ES bundle), interfacing with third-party document vendors (Insurance Document Vendor ES bundle), reporting to external entities with the help of a third-party (Insurance External Reporting ES bundle), and external claims investigation to uncover potential fraud (Insurance External Claims Investigation ES bundle), to name a few.
The dual functionality of this bundle allows it to serve two audiences:
- Any authorized party who needs access to information connected with an insurance claim, whether a salesperson or a third-party such as an adjuster, independent agent, or a lawyer. Providing claims-related information in a timely fashion will speed claims handling, improving customer satisfaction and industry ratings.
- In the case of FROI and FNOL processing, the bundle serves any insurance company representative (such as a risk manager or claims agent) or outsourcing company that provides an intake service for insurance companies. Providing first-hand data capture (the receipt of the injury or loss information from the claimant) will result in higher quality information. An automatic FROI or FNOL handling process based on standardized messages (using ACORD XML, for example) will lead to a significant reduction in time and cost.
For details on Service Operations, Business Objects and Process Components, please check the ES Workplace.
How to Use This ES Bundle
This ES bundle improves processes for insurance companies in several ways, both in terms of providing insurance claims information and making it possible to automate FROI and FNOL information.
Wider Access to Claim Information
Claim information is often needed by people in a number of different roles, from claims adjustors to agents fielding calls from customers. Getting this information typically required a phone call, however. This ES bundle takes this claims information and, with proper attention to authorizations, opens it to people who need to see it, whether they are within the insurance company or outside it.
Part of the reason that claims information is needed widely is because an insurance claim is an information-rich business object. As of Enhancement Package 4, slated for release at the end of 2008, the Insurance Claim business object will be enriched to include more information.
Some of the types of information provided by this business object include:
- Parties involved in a claim (such as claimants, and adjusters)
- Sections of a claim (such as coverage or benefit type area)
- Payments in advance
- Payments and payment items
- Claimed items
- Subrogations and subrogation items
- Litgations and litigation level
- Auto losses
- Liability losses
- Homeowner losses
- Workers compensation losses
- Correspondence associated with a claim
- The documents associated with a claim (such as an insurance contract or application)
- Archived documents associated with a claim
As a result, certain information that might be valuable to third parties such as lawyers could be provided to them, provided that they have been set up as a user in SAP with the proper authorizations.
Automated Exchange of FROI and FNOL
Many insurance companies still rely on paper to exchange FROI or FNOL information with claimants. Either a risk manager sends or a claims handler receives handwritten claim forms from claimants. The information on these claim forms then has to be retyped into the insurance company's system, increasing the likelihood of errors and a delay in the claim confirmation. Aside from being error-prone and time-consuming, delays in the processing of a claim confirmation take days, until the errors are discovered. Alternatively, a claims agent may speak with a claimant on the telephone and enter data directly. While this is not a paper-based process, it is nonetheless error-prone and inefficient, since information is derived by the claims agent by listening to the claimant and typing it into an interface. If claimants could enter this information directly, the quality of the information would improve along with the efficiency-the claims agent would no longer need to retype the customer's information or capture it while speaking with the customer.
The Insurance Claims Handling ES bundle offers a means of eliminating the paper-based approach, provided that insurance companies create a web-based or other type of interactive form (such as an Adobe Interactive Form) with required fields that claimants can use to submit their FNOL or FROI information. This data is then made available to the claim agent, who reviews it and sends it through the next stages of claims notification, which would lead to an eventual claim confirmation of the FNOL or FROI.
This section explores two use cases for the Insurance Claims Handling ES bundle two use cases related to access to insurance claim information as well as two use cases related to the FNOL and FROI functionality – asynchronous and synchronous. Both use cases show how the same outcome can be achieved, albeit at different speeds. There is no one right way to deploy this bundle. The goal is to give you a greater understanding of the inner workings of the business objects and enterprise services underlying the bundle so that you can implement them in the way that fits your particular environment. This wiki is also a space for you to share knowledge and collaborate with others who are implementing the Insurance Claims Handling ES bundle.
Use Case 1: Agent Access to Claims on a Handheld
An insurance agent is with a client, selling her homeowner's insurance. The customer asks about a recent auto insurance claim. The agent, using his mobile device, looks up information on the claim, searching by the policyholder's name, which invokes the Find Insurance Claim Basic Data by Elements enterprise service. This service returns a list of all the claims on the policy, and the agent selects the recent auto insurance claim, which invokes the Read Insurance Claim enterprise service. The agent scans the information and can tell the customer that the claim has already been processed and paid; a check was sent out the previous Thursday. The agent's handy access to information gives the client the confidence to sign up for homeowner's insurance as well.
Use Case 2: Providing Claims Information to Adjusters
At Montgomery General Auto Insurance, adjusters are typically subcontractors for an insurance company. Although they don't need access to all information about a claim, they need information about the object that has been damaged, along with any estimates that have been attached to the claim. The adjuster signs into the portal that the company has created for third-parties. The adjuster then enters the claimant's name and zip code, which invokes the Find Insurance Claim Basic Data by Elements enterprise service operation. Selecting the claim from the resulting list, the adjuster invokes the Read Insurance Claim enterprise service operation, which displays relevant information about the claim, including the two estimates that the claimant has obtain. The adjuster reviews this information before inspecting the damaged object and submits his findings in the portal, which an insurance claims specialist will review before adding to the claim itself.
Use Case 3: Asynchronous Insurance Claims Notification
For the purposes of illustrating how this ES bundle works, let's consider a First Notice of Loss in an automobile accident. The claimant has accidentally backed his car into a fire hydrant, damaging the rear bumper and destroying one tail light. The claimant logs onto the insurance provider's portal directly, thus bypassing the need for a claims manager or risk manager. (If this had been a workers' compensation claim, an employee injured on the job would have to go through a risk manager or HR person before entering the details in an interactive form.) Note that in the following steps the claimant's insurance company would have to provide a web-based form to receive First Notice of Loss information, since this is not part of this bundle. An interactive form that the user submits to the insurance company provides an example of using this bundle in an asynchronous mode.
After the car accident, the claimant goes to his insurance company's web site and chooses the proper form to file a First Notice of Loss. Depending on the web interface provided by the insurance company, this form would either be downloaded or opened and completed directly on the insurance company's site.
The claimant begins inputting the accident information onto the form. The creator of this form has a high degree of control over how much and what kind of information is included; certain fields are required, for example. After the accident information is described, the claimant submits the form, calling the Create Insurance Claim Notification enterprise service, which will create an Insurance Claim Notification business object and send the data to the insurance company. The claimant also has the option of printing or saving the form on his or her local computer.
The claims agent would then see that the document is awaiting review. The agent can then go to his work list or inbox to begin the review of the claimant's FNOL. The claims agent opens the form and then checks the data for consistency and completeness.
If the form is not complete, the claims agent can reject the FNOL and send it back to the claimant for further processing. This can be sent as an email, or on paper. It does not require an enterprise service operation.
In this instance, the claim agent approves the FNOL. Once the approve button has been pressed, the request is processed in the back-end system. The Insurance Claim Notification business object and the Confirm Insurance Claim Notification Creation enterprise service operation are utilized.
Now a notification that the FNOL has been received and processed can be sent to the claimant. The Confirm Insurance Claim Notification Creation enterprise service operation notifies the back-end system to process this request. In this asynchronous use case, the notification may take the form of a printed letter, a phone call, or another method as determined by the insurance company.
Use Case 4: Synchronous Insurance Claims Notification
In this mode, all of the steps that take place in the asynchronous mode (as in use case 3) are repeated, but when the claimant sends the data to his insurance company, a message, in the form of either an email or a direct response from the insurance company's web site, would be returned immediately to confirm receipt of the data.
For claimants who are familiar with paying bills online, this would most likely be a message sent out that says something along the lines of "We have received your information, and it has been processed." And since it is synchronous, it would happen in real time in the back-end system of the insurance company. It is not the creation of a claim, but is simply the Create Insurance Claim Notification enterprise service operation that is informing the claimant that the form has been processed in real time by the back-end system.
Future Directions for the Insurance Claims Handling ES Bundle
Currently, the Insurance Claims Handling ES bundle handles finding and reviewing insurance claims as well as the insurance claims notification process. Future ES bundles may provide enterprise services for processing insurance claims.
Furthermore, one can envision many other possibilities for extending SAP for Insurance using enterprise SOA. Here are just a few, which represent separate ES bundles delivered with Enhancement Package 3:
- Legal Reporting: Many countries have enacted legal and regulatory changes that require the insurance industry to do legal reporting. One feature common to all these changes is that they place high demands on internal and external reporting. Solutions may be specifically developed link data from various back-end sources in order to make reporting more efficient and easier. See the Insurance External Reporting ES bundle for more information.
- Fraud Investigation: Business rules can alert insurance companies to potential fraud by identifying suspect claims and routing them to special investigative units. These could be linked to third-party services dedicated to identifying fraudulent claims. See the Insurance External Claims Investigation ES bundle for details.
- Connection to Document Vendors: Some states in the U.S. still require that forms be submitted on paper. Document vendors could be used to provide these forms. Integrating the SAP for Insurance with popular document and content management applications through the use of services is another obviously useful extension of enterprise SOA. See the Insurance Document Vendor ES bundle for more information.
The Insurance Claims Handling ES bundle uses an xApp based on the ACORD standard to achieve connectivity between the insurance agency web portal or system and the SAP Claims Management back-end system.
- SAP ERP 6.0
- SAP enhancement package 1 for SAP ERP 6.0 (for insurance claims notification functionality)
- SAP enhancement package 4 for SAP ERP 6.0 (for finding and reading claims information)
- SAP Claims Management
- SAP NetWeaver Process Integration (formerly SAP NetWeaver XI)
Related ES Bundles
- Insurance Policy Issuing and Underwriting
- Insurance Document Vendor
- Insurance External Reporting
- Insurance External Claims Investigation
- Insurance Credentialing
- Insurance Billing and Payment
SAP and SDN Links
- SOA Homepage on SDN
- SAP for Insurance
- SDN blog about ACORD
- "Easy as Enterprise SOA - Servicing a Better Idea", a SAP INFO article by Eat Media founder Ian Alexander, highlights how the different standalone applications in enterprise SOA "work to provide insurance companies specialized solutions and services."