What creates quality in the claims handling function? It’s a combination of consistency and good market conduct.
Claims effectiveness: What’s the cost of quality?
Loss Economic Opportunity (LEO) is defined as the savings potential associated with achieving quality in claims handling, due to:
- Consistency in claims handling.
- Good market conduct.
- Consistency in applying company procedures.
Accenture derives LEO through a comprehensive, fact-based review of claims cases. Our analysis of LEO has shown that there are systematic challenges with consistently applying best practices.
What does this mean for the claims organization? While it depends on the specific line of business, the savings potential can be quite tremendous. As shown in Figure 2, the savings can range from 3–5 percent, and even up to 18 percent.
So, you tell me. What’s the cost of quality?