Traditional vs. Digital Claims Management: Which Is Right for Your Organization?

Insurance claims management is not a new practice. What changes over time is how it is done. As technology advances, more organizations are moving from traditional, manual methods to digital claims management. But is digital always the right choice? In this article we compare the two approaches, look at what each one means in day-to-day claims work, and help you decide which is right for your organization.

Claims always deserve careful handling: whatever a claimant is filing for, they are not in a good situation, and the way the claim is managed shapes how quickly and accurately they are taken care of.

What is traditional claims management?

Traditional claims management relies on manual processes for intake, document handling and communication. After a claimant files a claim, an adjuster contacts them, looks for evidence, visits the place where the loss happened and gathers proof. Once submitted, the claim moves between people on paper forms that carry policy details, expiration dates and supporting information, and every copy has to be printed again.

Every piece of information is typed by hand into the insurer's database, and every time something changes the claimant has to be told by phone or email.

Some organizations still work this way, but the method is time-consuming, prone to error and costly.

What is digital claims management?

A claims management system is software that an adjuster or claims handler (or an automated process) uses to gather and process information about the policy and its coverages, the claim and the claimant, and to evaluate the circumstances of the claim.

Claims management software is often powered by technologies such as artificial intelligence and data analytics, which help insurers improve the customer experience while reducing costs and turnaround time. It supports straight-through processing, quicker settlements and rule-based auto-adjudication, and it removes many of the operational inefficiencies of legacy systems, along with their maintenance and training costs.

Because information is captured once and shared across the system, the errors that come with re-typing data are reduced. Communication is centralized too: adjusters, brokers and claimants work from the same record instead of chasing each other across channels.

Key differences between traditional and digital claims management

The benefits of digital claims management

• Automation: Digital tools automate repetitive tasks such as document generation and data entry, so claims adjusters can focus on higher-value work.

• Lower turnaround time: Digital claims management reduces processing times, so insurers can respond to claimants faster and improve the customer experience. Software processes and analyzes claim information at scale and presents it in easy-to-read reports and dashboards.

• Higher productivity: Automating the claims process takes routine work off your staff, improves accuracy and helps avoid costly mistakes. Automation and data analytics support adjusters, administrators, third-party administrators, risk managers, claims accountants and fraud specialists, and help detect and prevent fraud when settling claims and processing payments.

• Centralized data: Claims, vendors, insureds and all their documents live in one place, which removes the manual back-and-forth of finding information and saves time and money.

• Data accuracy and integration: Digital platforms integrate with other systems, which improves data accuracy, reduces redundancies and strengthens compliance. Software also catches errors the human eye misses and makes it simple to run reports and see the full status of every claim, which is where good claims analytics starts.

Which is right for your organization?

In the comparison between traditional and digital claims management, digital solutions offer clear advantages in efficiency, accuracy and scalability. They also free your team to focus on complex claims and on the people behind them, instead of on paperwork.

Why choose Terra for digital claims management?

Terra's platform offers a comprehensive digital claims management solution with automation, compliance tracking and powerful analytics. Alongside claims, Terra lets you manage insurance policies and coordinate ancillary services through its service marketplace, so your team works from one platform.

By moving to digital, your organization can increase efficiency, reduce costs and improve customer satisfaction. If you're looking to modernize your claims process, Terra's digital claims management system is designed to meet your needs.