Can you buy intelligence and become smarter?
A deeper look at CCC’s ability to let the data tell the storyWHERE TO LOOK
With the economic challenges inherited by the insurance industry in 2008 moving us into 2009, industry analysts are seeing a significant amount of scrutiny in regard to budget and planning, resulting in a flattened level of new technology. There are, however, projects that are getting started or carrying over from 2008, and we know a majority of them have a hardened focus on process improvement. According to a recent report published by The Tower Group, 66 percent of the nation’s insurance carriers identified their number one priority as the aggregation of data and information to help streamline processes.
The auto claims line of business will likely be looking to improve customer satisfaction and policy retention. As auto insurance premium growth continues to slow and claim frequency is in decline, it is also important for insurers to have the ability to ‘right-size’ organizations and decide where it makes the most sense to use resources. For that to happen, there needs to be a substantial amount of usable data to keep users constantly apprised of each step in the claims handling process. However, the pursuit of any initiative will be rigorously vetted to make sure its investment brings a substantive ROI.
So, where is a good place to start and how? Carriers are looking for a robust, visible business solution that can provide intelligence around the claims-handling process that allows them to isolate problem areas and monitor and measure improvements. Ad hoc methods to gain such information exists; however, the results are often very time-consuming and do not provide a clear way to create and compare multiple benchmark measurements. What is needed is an integrated solution that can easily open a window to that information.
THE RIGHT TOOL FOR THE JOB
CCC Intellisphere® Insurance Reporting is designed to help maximize the vehicle claims decision-making process. Users can look at their KPIs from the collision estimating, reinspection, salvage, total loss subrogation and audit processes and have the powerful ability to identify and address potential problem areas before they surface. In addition, users can compare performance against local market industry data. Regardless of the level of its analytic sophistication, carriers can access the information needed to manage cost and gain claims processing efficiencies. With literally hundreds of variables across multiple subject areas, users can look at different facets of the workflow to identify these potential issues.
Finding Target Areas
The following analysis highlights a merged CCC Intellisphere report that looks at collision estimating, audit and re-inspection information. Carriers having the ability to identify problem areas, monitor, and measure improvement can implement action plans to reach objectives like improving customer satisfaction, and ultimately policy retention. Reports are accessible through the CCC portal, and can be sent to recipients in Adobe® Acrobat® PDF, Microsoft® Excel® spreadsheet and HTML formats. The report (See Figure 1) can identify what region or regions may have higher than usual cycle times, which ones could benefit from updates of guidelines, or may be experiencing high supplement frequency.
CCC research shows that traditional areas of focus include:
> Repair bottlenecks, negatively impacting cycle times
> Anomalies in the audit process that can lead to an unusually high supplement rate
> Abnormally high labor or repair costs for selected categories
CCC Intellisphere® Insurance Reporting—The Payoff
To get a clearer indication of the impact CCC Intellisphere offers, CCC conducted a comparison of high- and low-frequency users of the solution. We believe that companies using CCC Intellisphere can achieve more efficiency.
With heavy CCC Intellisphere users among medium market carriers, vehicle appraisal statistics show that they have average lower labor costs over a three-year period. The ability to gain deep levels of process insight opens up the opportunity for time-saving improvements. In fact, the savings difference ranges between $80 and $200 per claim (depending on the size of the carrier). In the example to the right, the difference was approximately $80 per claim (See Figure 2).
Carriers with a clear picture of the repaair process reduced overall supplements. Larger carriers frequently using CCC Intellisphere reduced their supplement dollar amount on an average of $200 per claim (See Figure 3).
Aggregating these multiple benefits has a sizable impact on the total repair cost. Research looking at medium market carriers that were heavy CCC Intellisphere user (versus light usage carriers) showed an average difference of more than $350 per claim (See Figure 4).
THE BUILD VS. BUY QUESTION
CCC Research shows that building an individual, customized data warehouse solution has the potential to present significant pitfalls and creates large challenges to internal IT organizations.
Some of these disadvantages include:
Cost: Over its lifespan, data warehouses can have high costs, as data warehouses are usually not static, and have a high maintenance expense.
Relevance: They can get outdated relatively quickly, with the possible pitfall of delivering suboptimal information to the organization.
Functionality: There is often a fine line between data warehouses and operational systems. Duplicate, expensive functionality may be developed, or functionality may be developed in the data warehouse that, in retrospect, should have been developed in the operational systems and vice versa. (Wikepedia, Business Intelligence, 2009)
These disadvantages and challenges create a heavy toll on internal budgets and are running counter to the ROI requirement of a successful IT project. According to 2009 research found in Business Intelligence Best Practices: Data Warehousing ROI—Justifying and Assessing a Data Warehouse: “Building a data warehouse is a complex, expensive and time-consuming task. Depending on a warehouse’s scope, it may require seven-digit expenditures, and take months to initially develop and years to become fully enterprise-wide in its scope. There is no assurance that it will be successful, because many data warehousing projects are over budget, behind schedule, fail to live up to expectations or ‘belly up’ completely.”
According to a 2007 article published by allbusiness.com, more than half of all business intelligence (BI) projects are either never completed or fail to deliver the features and benefits that are optimistically agreed on at their outset. While there are many reasons for this high failure rate, the biggest is that companies treat BI projects as just another IT project. Analytics and business intelligence solutions should be more than a system; they should have a strategy with a vision that aligns with the organization’s business goals.
A WAY FORWARD
Choosing a strategy with a service provider mitigates these risks, and focuses on the value of analytics, versus its high costs. The Tower Group in its “Business Drivers, Strategic Responses and IT Initiatives Report for 2009” calls out the pursuit of software as a service as part of the industry’s top 10 issues. According to this report, a primary factor in directing carriers to look externally is the high demand placed on the development and maintenance of internal expertise, tying up internal IT resources and limiting scalable capacity. In terms of dollars spent for a company wishing to build and maintain a data warehouse is extremely high, exceeding an average of $3 million annually. The median ROI of a custom application is 104 percent, whereas the ROI of packaged analytical tools averages 140 percent – representing a substantive benefit.
With its continual development, CCC offers clients the ability to utilize the industry’s largest claims data set– information that has been cleaned, processed and aggregated—with the goal of optimizing internal processes. As proven innovators for nearly 30 years, CCC’s warehouse and data services capture more than 50 percent of all automotive claims processed nationally. In addition, CCC can provide clients the ability to report, analyze and mine the data in an automated fashion through an active interface or receipt via a proactive email option.
Why CCC?
About CCC Information Services Inc.
CCC brings together what matters most—insight to make the best decisions, connections into the largest auto claims network and superior productivity through an innovative single platform.
Founded in 1980, CCC is the nation’s leading provider of advanced software, workflow tools and enabling technologies to the automotive claims and collision repair industries. Its client base includes more than 350 insurance companies and more than 20,000 repair facilities. CCC also delivers the most comprehensive, best-in-class industry insight by leveraging data captured from the millions of transactions processed through its network, and the forward-looking, trusted advisor perspective of its people. You can find out more about CCC Information Services Inc. by visiting the company’s web site at www.cccis.com.
©2009 CCC Information Services Inc. All rights reserved. CCC Intellisphere is a registered trademark, CCC and the CCC logo are registered service marks, and vision for the road ahead is a trademark of CCC Information Services Inc. Microsoft and Excel are registered trademarks of Microsoft Corporation in the United States and other countries. Adobe and Acrobat are trademarks of Adobe Systems Incorporated in the United States and/or other countries.
