I was chatting with someone the other day who shared a story of a European health insurer. Their decision-making in claims looked only at the validity of the claim and nothing else. This of course created a situation where good (and very profitable customers) could be treated correctly but ineffectively – such as one member who had paid over $30,000 in premiums and had not made a claim in 10 years who had a $500 claim denied.
The first problem is that there are two decisions here – is the claim valid and should we pay it? While many organizations treat these as one and the same they are clearly not. We might decide a claim is invalid but pay it anyway based on customer history, lifetime value, potential to churn or something. We might decide it is invalid but not worth the expense of litigating or investigating and so on.
Being thorough about the decisions involved and being holistic when identifying the rules and data that drive the decisions can help you avoid this kind of situation.