Evolution of the DRP toSelf–Managed Claims

PerformanceGateway

Mike HaswellPaul Barry

Ed Schneider

Business Problem that Needs to Be Solved: How can we increase customer retention while

reducing our LAE?

• By providing our customers with a claims processing portal• By motivating our vendors to perform as well as our best

employees

How do we do this?

• Implementing Self-Managed Claims

DRPs Are Here to Stay

Appraisal Method• Staff 50%• DRP 35%• IA 10%• Other shop 5%*• Self-Service 0%*

*Future trend expected to see Self-Service and Other Shop options rise

Profitability & Technology

Intelligent Technology Outcomes•Drives costs down•Drives retention up

Efficient Technology Benefits• Improve use of adjusting resources• Reduce administrative work• Allow resources to focus on core competencies

• Improve compliance & consistency

Macro Trends

Program Management: Carriers continue the trend to manage DRP shops almost like they do employees • True Self-Management: As relationships evolve, carriers are increasing

the use of self-management where the shop handles all aspects of the claim• Leading edge companies handle up to 15% of auto claims through self-managed

programs

MSO Focus: Concentration of claims to MSOs continues to increase due to single point of contact, issue resolution and service level agreements

Out-of-Network Assignment: Assignments to any shop in the country in low penetration markets and customer choice scenarios

Macro Trends

Catastrophe Management: Increasing focus on building DRPs with an eye towards handling CAT claims

Scorecard: Carriers are relying increasingly on sophisticated scorecards to drive performance

Performance-Based Assignment: Carriers are assigning claims to shops based on performance scores

Scheduling: Scheduling of DRP shops through online scheduling services

Changing Demographics

Self-Service Full-Service Valet service

Customers are demanding options and choices  

Technology Drives Expectations

“15 seconds can save you 15% or more”• Translation:

• You should expect technology to drive your auto insurance costs down

• Technology should provide you with instantaneous access to the information you need to make your own decisions

Technology Can Add More Value than the Personal Touch

Consumers want to control their own experienceWhat does this mean for you?

• Consumers will take responsibility for tasks you currently provide

• Opportunity to differentiate your company by making the technology available to consumers• Cut costs• Rarely disappoint

Impact on Claims Industry?

Changing Vendor Model

Rigorous selection processes

Clear goals and objectives

Best Practices

Structured training

Performance audits

Feedback/Performance Reviews

Treat Vendors Like Employees

Impact on Claims Industry?

Suppliers want to control their own destiny• Compete for your business on an open playing field

What does this mean for you?• Shops will focus on how to deliver against your goals

What does this transformation require?• “Will I receive more referrals next week based on how

well I am performing this week?”

Performance-Based Assignments

Are you likely to go to a travel agency to make travel arrangements? Do you use a service like Orbitz or

Expedia instead? Orbitz and Expedia provide

performance-based data:• Customer reviews• Pricing• Photos• Distance• Availability

Industry TransformationImagine this: Policyholder:

• Takes picture of damage with smart phone• Reports claim on downloadable app• Uploads photos• Locates highest-performing body shop• Schedules the repair and rental car• Receives status updates on smartphone• Receives electronic customer satisfaction

survey covering insurer, body shop, parts and rental car company

• Receives customized electronic warranty

Industry TransformationImagine this:

Body shop chosen based on:• Peer comparison with industry

wide data• Start date (due to integration with

shop’s management system)• Distance from policyholder• Filtering for specific criteria

• Based on profile data that shop self-maintains online

Significance of Peer Comparison

“Will I receive more referrals next week based on how well I am performing this week?” This requires an insurer configurable scorecard

• Consolidates supplier data

• Consolidates industry data that you may not have access to

One Comprehensive Scorecard that Drives • Real-Time Performance-Based Assignments

This will motivate them to deliver against your goals

Significance of Peer Comparison

“Will I receive more referrals next week based on how well I am performing this week?”

Body shops work from a single platform to access insurer scorecards on a weekly basis• Identify how they’re performing

against what is important to you

This will enable them to deliver against your goals

Evolution of Supplier Management

Level 1Vendor List

• Supplier List• Locally Managed

Level 2Centralized Admin

• Supplier list• Managed by a 

National/Regional Admin

Level 3Network 

Management

• Centralized Admin• Program Terms & 

Conditions• Metrics/Reporting

Level 4Performance Management

• Centralized Admin• Program Terms & 

Conditions • Best Practices• Training & Testing• Compliance Audits• Scorecard

Requirements

Ability to send electronic assignments to any shop

Access to industry performance data on all shops

FNOL referral software that automatically identifies the best vendor based on an algorithm balancing performance, capacity and distance

Performance-Based Assignments