Claims Leakage Solutions

Claims leakage is the industry's polite term for paying more than a claim is worth. It is real, it is measurable, and most of it is preventable.

The drivers of leakage are well catalogued: inadequate coverage analysis leading to improper payments, missed subrogation opportunities, excessive litigation spend on cases that should have settled earlier, reserve inadequacy that delays intervention, and medical cost management that is not deployed on applicable claims. Each driver has a different root cause and a different operational fix.

The carriers who have made meaningful progress on leakage have approached it systematically: baseline measurement of leakage by type and line, root cause analysis to distinguish adjuster skill gaps from process gaps from system gaps, and targeted interventions with outcome measurement to confirm the fix worked.

The challenge is that leakage reduction requires honest self-assessment. Organizations that attribute leakage to adjuster performance alone miss the systemic contributors that produce it across the entire book regardless of individual skill.