The prevalence of paper-based claims processing systems contributes to lower profitability for Property & Casualty companies through a variety of factors, including:

• Duplicate Payments. The payment of duplicate services performed on the same date of service often goes unnoticed unless the provider reimburses the payor for that amount. More often than not, the payor fails to notice such overpayments, potentially costing insurers millions of dollars.

• Excessive Claim Handler Personal. More claims equals more paper. More paper requires more claim handlers. Instead of achieving economies of scale over a fixed employee salary base, P&C companies continue to see claims handler per employee remaining flat or declining.

• Fraud. Handling 200 claims at a time and having a limited time period to review these claims, eliminates the ability to devote the time necessary to investigate fraudulent behavior. Furthermore, without a system which can automatically detect such signs as unusual gaps in treatment, invalid treatment codes and unrecognizable health care providers, the identification of fraudulent signs is left to the ability of the individual claim handler to manually detect and cross reference information across multiple sources and large paper based files.

• Late Payment Penalties. P&C companies are subjected to fines based on payments not made in a legislative compliant time period. By the sheer volume and labor-intensive process of paper based processing, legislative compliance is nearly impossible without the further susceptibility to duplicate payments and fraud.

• Business Tracking Inabilities. Other than maintaining and updating manual records, P&C companies have no means by which to track business performance in selected areas of the claims operations. This inhibits the ability to identify and improve underperforming areas of the business.

• Excessive Property & Equipment Expenses. As additional paper claims and employees are added, more offices and storage facilities are eventually required to house records and expand claims departments.

• Lost Premiums. With low customer service capabilities and slow payment times, the likelihood of lost customers and lost premiums is high.