LEAN and claims handling

Read time: 6 minutes

News & Blog Blog LEAN and claims handling

LEAN and claims handling

Barry Pappot

Barry Pappot (CChL)

Manager Continuous Improvement

Read time: 6 minutes
Remember the January storm claims? Repairs may be ongoing, but the financial side has been settled on behalf of all ‘our’ policyholders. We have been able to take all their calls and we have not relaxed our claims handling rules to deal with the deluge of claims. We owe all this to LEAN thinking. How could LEAN improve the customer satisfaction in your claims department?

In this blog you will find the backgrounds of our LEAN thinking. In the next blogs I will deal with the various aspects op LEAN in greater detail. There is no quick-fix for continuous improvement of end user satisfaction – the satisfaction of your policyholders.

Customer satisfaction and the Hoshin Kanri matrix

In the insurance industry, customer satisfaction has multiple antecendents. Waiting times, friendlyness, the speed of the settlement, correct assessment of the situation are some of those antecedents. Using the Hoshin Kanri matrix, we have set ambitious goals for all the customer satisfaction antecedents. The Hoshin Kanri matrix is a Lean instruments, in which

  • the goals for the year
  • and how to meet them

are carefully discussed.

It is is not a matter of simply entering data in the matrix. Each and every goal required a lot of discussion. All management tiers must be connected, in order fo all to focus on the same. A Lean coach supervises and inspires the discussion. During multiple sessions the management teams discuss the various parts of Hoshin step-by-step.

LEAN Hoshin Matrix example

Basic Stability: a basic LEAN principle

Having completed Hoshin, companies tend to immediately introduce projects to drive improvements. However, it is vital that changes should be introduced from a stable environment. Before we change anything in our methods, we wish to secure the quality of our services to our customers at any time. This is an important Lean mind-set.

We are confronted with changes on a daily basis. Just think of sudden peaks in our work-load due to a natural disaster. If this occurs, we still need to minimise phone waiting times. Thanks to Basic Stability this is possible, without having to hire large numbers of temps.

This is why our team managers are trained in Basic Stability concepts, such as buffers through which a growing work-load can be covered within the teams, or standardisation (standard work). Standardisation allows teams to offer consistent quality levels in their services.

Basic Stability is a relatively unfamiliar Lean subject. Nevertheless, it is the basic principle of Lean, based on which improvements can be introduced and sustained.

Small teams, large responsibilities

As the entire organisation is involved in customer services, the cooperation within small teams is intense. These small teams service customers from beginning (claim notification) to end (settlement) and have a huge responsibility. Team members help each other to service the customers uniformly and minimise waiting times. Team members receive continuous coaching to keep improving the service levels.

Steps towards quality objectives

From this stable environment, working with small teams, we grow towards our quality objectives. We keep asking ourselves: what is holding us back? This then becomes the problem to be solved. We continue this process until we have reached our target.

Brief, intensive projects help us solve each problem within a very short time. This is known as Kaizen or A3 Problem Solving and requires specific skills. The managers, or ‘quality improvers’, are, therefore, trained in these skills.

Breakthrough improvements: 20 to 30 percent

The goal is to achieve multiple breakthrough improvements in 2018. Breakthrough improvements are not limited to a few percent, but typically concern improvements of 20 – 30 percent. In Belgium, for instance, we have managed to halve our response times to customers by optimising our operational management. How? By

  • creating small autonomous teams and close cooperation
  • standard work
  • flexible use of capacity

Result: improved NPS

In 2018 we have managed to further improve our Net Promotor Score (NPS), despite the most severe storms in decades.

Questions?

If you have any questions about the Lean approach and how such an approach could help improve your claims department? Do not hesitate to contact me, or read our next blog on Lean and claims handling, to be published early October.

Quote
Basic Stability is the basic principle of LEAN, on the basis of which improvements can be introduced.
Barry Pappot
Management Coach | Lean Champion, Van Ameyde Benelux

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