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Claims Leakage Control. Unique, Detailed and Independent. “In a competitive insurance market, controlling claims costs is vital.”. Traditional in-house audits may not be the answer. Do you measure claims leakage? . If so, is the process independent?. What is Claims Leakage?.

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claims leakage control

Claims Leakage Control

Unique, Detailed and Independent

“In a competitive insurance market, controlling claims costs is vital.”
  • Traditional in-house audits may not be the answer
  • Do you measure claims leakage?
  • If so, is the process independent?

What is Claims Leakage?

  • Claims Leakage is the loss of time or money from current claims practices and procedures
  • CMC’s Claims Leakage Program measures all aspects of claims cost management from smallregular issues to major over payments.
  • Claims costs are the single largest cost of running an insurance company.
  • Why do insurers often only measure their claims service in terms of productivity levels and customer service?
  • CMC’s Claims Leakage Program - improved profitability without additional costs or infrastructure.
benefits of reducing claims leakage
Benefits of Reducing Claims Leakage

Reduce claims spend - every claim dollar saved = $1 profit

  • Compare saving just 2% of claims cost with the effort and expense required to otherwise achieve a 2% increase in net profit
  • Reduced claim expense =
    • Positive impact on RI costs
    • Positive impact on regulatory capital requirements
  • Compliance Benefits for claims practices
  • CMC has previously detected Claims Leakage levels ranging from 0.2% to a massive 41%
  • Typically leakage levels of 2% -10% of untapped savings have been found

What profit improvements can you make from reduced claims leakage levels?

about claims management consulting pty ltd cmc
About Claims Management Consulting Pty. Ltd (CMC)
  • CMC was launched in 2000 to provide high quality claims management services to the Insurance Industry
  • CMC’s aim is to be a major reference point on claims cost control and claims service quality.
  • CMC services are suitable for insurers or any organizations handling claims
  • Mark Rayner (Director) has more than 35 years of experience in Insurance Claims Management including National Claims Management roles
  • Mark is a Claims Leakage identification specialist with extensive experience in claims audits
why cmc s leakage program
Why CMC’s Leakage Program?
  • CMC’s Claims Leakage reviews:
    • Specialize in reviewing all general insurance classes
    • Use a purpose built claims leakage database that has been designed by an insurance claims professional
    • Provide a detailed and accurate measure of claims leakage within claims practices
    • Demonstrate where operational changes or training needs to be implemented to improve claims outcomes
    • Becomes the catalyst for positive change and improved operations and claims costs
basic steps
Basic Steps

Agree Terms

of review




of result




On site



data and sampling
Data and Sampling
  • Details of recently finalised claims are collected
  • Using CMC’s database selection process a precise extract of claims is undertaken for review
  • 150 claims are selected to accurately represent all recently finalised claims
  • The strict selection criteria is vital to ensure an accurate reflection of all recently finalised claims
  • This method is far more reliable than a random file selection process
on site claims review
On Site Claims Review
  • An extensive review of the 150 claims is then conducted by the CMC Representative and a senior local claims handler, using our leakage questionnaire
  • The questionnaire asks over 70 questions of each claim reviewed based on the following common areas of claims leakage:
  • The results of the review are shown by product, leakage severity, leakage frequency, cost band and in the above categories
  • We comment on every leakage found and those where there is potential for leakage to occur
on site claims review 2
On Site Claims Review 2
  • CMC works closely with the senior claims executive you nominate as your project leader to ensure we understand your claims systems, processes and procedures.
  • This not only speeds up the file review process, but also ensures it is tailored for your business and produces meaningful results that accurately reflect the leakage outcome.
  • Throughout the process, leakage areas identified are discussed with your nominated project leader.
  • As a consequence, staff involved in the reviews see the leakage first hand and often become “champions” for anti-leakage practices and procedures.
analysis of the results
Analysis of the results
  • File review data is entered into our database on site
  • This enables constant monitoring throughout the process and enhanced areas of focus where trends are identified
  • Once the File Review is completed and all results have been determined and analysed, we provide a detailed report
  • The report contains:
    • an executive summary
    • a detailed commentary on leakages identified
    • recommendations for leakage control and reduction
    • a comprehensive set of leakage reports
case study 1
Case Study 1
  • Scope: Large Australian insurer with a significant commercial portfolio. CMC reviewed their large specialty commercial portfolio in all states
  • Results: Identified claims leakage in all state offices. In one state we were able to identify a massive 41% leakage level due to an absence of recovery processes and checks
  • Action: Recommendations included major process changes which when implemented resulted in immediate improvement in portfolio profitability
case study 2
Case Study 2

Scope: Large Personal Lines insurer requested review of Motor and Home claims Australia wide

Results: Able to identify leakage percentage by state office in both motor and home portfolios ranging from under 1% to over 9%

Action: The implementation of just one of CMC’s recommendations to change motor damage assessing methods in one state resulted in saving of over $1.7M in the first twelve months

This saving represented a significant reduction to the average motor vehicle claims cost

summary cmc s claims leakage program
Summary CMC’s Claims Leakage Program:
  • Is a powerful, robust yet flexible tool that can be modified to meet the individual needs of each and every client.
  • Introduces claims leakage benefits without affecting customer service
  • Determines the priorities for improvement in claims procedures and training
  • Enable strategies to be developed that WILL positively effect results.  

Real results – Real savings

Mark Rayner. Mobile:+61 403 434 204 Office: +61 2 9874 2727