Accenture experience suggests that insurers that successfully execute at the intersection of Claims and Procurement can improve loss ratios by 1-3 percentage points, dropping millions of dollars to the bottom line. However, rather than winning at the crossroads where the two areas converge, insurers spend their time debating their respective areas of responsibility.
In order to drive sustainable value and continuous improvement over time, Claims and Procurement need to reset their mindsets and together build a model that coordinates their operating principles from a strategic perspective. Decision-making, governance, process ownership and performance management—among other factors—should all be unified.
When Claims and Procurement work together, insurers create competitive differentiation and drive economic value. In tandem, the strongest vendor relationships are rewarded and strengthened, and customers experience an improved and more engaging claims process.
This approach, sustained through operating model changes, will help insurers actively move toward improved loss ratios. In the case of one carrier, such measures resulted in over $100M reduction in loss.