KPI Benchmarks : Claim Settlement Cycle Time (P&C)
- Benchmark Range
- Benchmark Average 16.7
- Benchmark Sample Size (n) 25
* Is High or Low Best: Low is Best
KPI Details : Claim Settlement Cycle Time (P&C)
Property & Casualty (P&C) insurance claim settlement cycle time measures the average amount of time required to settle and close an insurance claim, from first notice of loss until settlement. This KPI is extremely important, from both a customer experience and loss control perspective. Extended settlement cycle times may be an indicator of claims leakage (i.e., losses paid out are higher than they should/could be), which impairs the organization's profitability and standing with shareholders. Furthermore, lengthy claims cycle times are a leading driver of customer turnover. Major factors that drive longer claim settlement cycle times include poor claims triage procedures (i.e., claims not prioritized properly, routed to improper adjusters, etc.), lack of inbound data quality (e.g., claims submitted with missing information, etc.), subpar claims adjuster training and high turnover among adjusters.
KPI Best Practices : Claim Settlement Cycle Time (P&C)
- Assign complex claims to more experienced processors
- Proactively communicate with customers throughout settlement process
- Define acceptable levels of claims backlogs based on predictable historical closure rates
KPI Calculation Instructions Claim Settlement Cycle Time (P&C)?
The calendar dates of two events are used to derive this KPI: (1) the date that the policyholder notified the insurance company of the loss (i.e., first notice of loss, or FNOL), and (2) the date that the claim was formally closed and settled by the insurance company. A FNOL typically occurs over the phone, or through an online/electronic claim submission portal. The date of settlement is considered the date on which the claim is formally closed (approved or denied), and any payment is scheduled to be made to the appropriate parties (i.e., policyholder, repair vendor, etc.). The steps between these two start and finish dates (FNOL and settlement) typically include claims investigation, estimate, adjustment and negotiation (if required). Include only property and casualty claims in this calculation.
KPI Formula :
(Sum of P&C Claims Settlement Cycle Times) / Total Number of P&C Claims Settled
Property & Casualty Claims
This workflow template illustrates the process by which property and casualty insurance claims are received, processed and approved/denied. Purchase and download this template in PDF, Visio...
Type : Workflow Template
Process Participants : Claims Adjustor, Claims Manager, Claims Processor