This year, more progressive claims organizations will change the status quo of their claims management business operations by embracing broad cost-cutting initiatives and efficiencies derived from mature “emerging” technologies.

In every claim, there is a settlement process in which the carrier proposes a settlement to the insured and the insured party needs to sign off on a number of documents to effect the settlement. For those situations where carriers have (or would like to have) centralized claims processing, there is often a remote transaction that takes place to settle the claim. There is generally interest on both sides to settle the claim faster.

Settlement proposals with associated powers of attorney, waivers and other documents are often sent by courier mail to the insured party, who then reads, signs, and mails back the documents to the carrier in a prepaid return envelope, thus effecting the settlement.

Switching the claims settlement process from paper to an electronic format requires either the setup of expensive and complex online portals with password access or an e-mail-based electronic document signing service. The challenges with both of these methods revolve around concern for recipient acceptability and a strong desire to minimize the overall complexity, use of passwords, and technical requirements that have to be met by the recipient. It is critical to ensure that the resulting electronically signed documentation has the physical appearance of a wet-ink signature on paper so that any insurance commissioner or government body involved in auditing or in the property transfer process will not question the validity of e-signatures on the electronically signed documents.

While electronic commerce laws permit great efficiencies for business transactions by permitting use of electronic signatures, the unfortunate reality is that, nearly 10 years after adoption of the Federal E-Sign law, many transactions are still conducted via paper and wet-ink signature despite the tremendous cost savings and business transaction time efficiencies afforded by electronic signatures. It appears that, for the most part, industry contracts are still executed by paper-and-ink or faxed-and-scanned signatures due to either a lack of knowledge of the e-signature laws or adjudication concerns regarding e-signature laws in the event an e-signed contract becomes the subject of a legal challenge.

With new technology available, hardcopy, mail, courier, standard e-mail and faxed-back contract sign-off can be converted to electronic signature while avoiding the complexity and maintenance cost of Web portals. Special e-mail services now permit the claims adjuster to verify the insured party’s address by telephone. While on the phone, settlement documents to the insured party can be transmitted by e-mail in a manner that permits the insured party to apply a handwritten, mouse-scripted signature onto the appropriate signature areas of settlement proposals, government forms, lien/title transfer documents, and power of attorney agreements. These provide proof of e-mail content, delivery, time stamp verification, and signature.