An annual claim closing ratio is based on how many actual claim files we received and opened within a stated time period and compares it to how many existing claim files we closed during the same stated time period. We go by fiscal year, which is October 1 through September 30. Claim files are any legal disputes, contract disputes, any 3rd party property damage, any 3rd party bodily injury liability, any auto accident, any lawsuit, a 1st party City-owned property damage, and any 1st party City-owned property damage needed for repayment from an at-fault negligent other 3rd party person or entity (sometimes referred to as Subrogation). 1st party refers to the City and City employees and 3rd party refers to other than the City or other than a City employee. It is a direct measure of our efficiency and effectiveness in delivering customer service performance, internally and externally, related to claim matters regarding the City and its employees. The higher the percentage, the more timely we have conducted and concluded our handling of claims to provide customer service to people internally and externally. An annual claim closing ratio measurement is a well-established guideline, although unpublished for legal reasons, as an acceptable best practice guideline measurement within the insurance claim handling industry to reflect the customer service provided by a claim adjuster or claim department.

This measure allows us to see how efficiently and effectively our department section is responding to new claim submissions and on-going claim file handling from a customer service perspective. Claim file handling consists of receiving a new claim submission (internally and externally), the adjuster receiving the new claim submission, the adjuster setting up the new claim submission within Origami Risk (our RMIS, or Risk Management Information System, where claims are documented), contacting the parties involved in the claim, documenting the file with statements, reports, pictures, estimates, invoices, conversations, letters, and any other required information in order to make a determination about the legal responsibility and coverage required or owed by the parties involved in the claim.

It is based on the number of claims closed divided by the number of new claims received and set up in Origami for a reporting period, our measure is based on our fiscal year. For instance, 100 closed claims/95 new claims received and set up in origami = 105% Closing Ratio. A percentage of 100% or greater means we closed more files than we received. This reflects that our adjusters are actually conducting the customer service required to open, investigate, document, make a determination on legal liability, and close a file during the reporting period. A percentage less than 100% can mean that either the adjusters are not properly handling and closing files timely, efficiently, and effectively or that the claim submission count is going up and we might need to consider hiring additional adjusting staff to handle the heavier work load.

Our Target is 100% closing ratio. It is an ongoing measurement of our effective customer service and efficiency in claim file handling. If we are at or near 100%, anywhere between 97% and up, then it shows that our adjusters are handling the new and older claim files as expected. We also compare this ratio to our prior year to see any improvement in our services and trends in claim submissions.

Data Source Details & Calculation Information:

Data for this KPI comes from Origami Risk Database, which is accessed by named users only. Currently only members of Risk Management have access to this database.

To download data:

1. Login to Origami Risk Database with proper username and password.

2. Select the Reports tab at the top of the page and scroll down to select reports named: New Claim Report – Monthly J and Closed Claims - Jason.

3. Run reports as a pdf or excel spreadsheet. I prefer an excel report so I can cut and paste the required information, if needed.

4. Download the reports. They are saved on Jason Barksdale’s desktop under a folder named Performance Review FYxx (the xx is based on the current fiscal year, i.e. FY17).

5. The actual amount of new claims opened and the actual amount of claims closed stated in each report are then transferred over to an excel spreadsheet found in the Performance Review FY17 folder titled: Performance Office Information 2017.xlsx (it is also set up and saved as new for each fiscal year thus updating the title with the fiscal year). This is where the measurements are saved according to each individual adjuster. The total amount combined for all adjusters for the opened and closed claims are found under columns AA and AB for the associated month. The combined numbers for the month are then transferred to the ClearPoint data sheet 408775. It is a ratio based on the number of Closed Claims divided by the number of Opened Claims (example: 23 Closed Claims / 25 Opened Claims = 92% were successfully closed in comparison to newly opened).

Series, Formula, & Target Information:

On the ClearPoint data sheet, laid out by month within the fiscal year, Column B captures the amount of Closed Claims for that month; Column C captures the amount of Opened Claims for that month. This measure shows our percentage of customer service by verifying if the adjuster is working to resolve and close existing claims.

Column B was changed to “Total # of received claims entered timely from audit each month.” Column C was changed to “Total # audited each month (for claims entered).”

The calculation is (Column B/Column C = %) or Column B – Total # of claims closed in month / column C - # claims opened in month. If 23 claims were closed / 25 were opened = 92% were successfully closed in comparison to newly opened claims.

Targets:

There is a target of 100% of the claim files to be successfully closed in comparison to newly opened claims.

High variance is 100% or greater.

Low variance is 95%, which is based on a 5% decrease from the high variance. If less than 100% is regularly occurring, then a diagnosis to an issue needs to be addressed.

Evaluation:

The high variance percentage is attainable if the adjuster is properly working all new and existing claim files regularly towards a resolution. The measure reflects the level of efficiency, customer service, and work done by the adjusters in claim handling and moving them to a resolution and closing. If the monthly ratio is regularly below 100%, then it means the adjuster claim inventories are rising and further review of why needs to be addressed: could be a lack of follow up/best practices being applied, poor documentation and customer service, or simply a large influx of claims that may require additional staffing needs to accommodate the larger incoming claim loads.