In 1997, Allstate Insurance Company launched a test program in Albuquerque, N.M., titled the Claim Core Process Redesign, to modify its process for assessing wind- and hail-related roof damage claims.
In May that year, initial test results suggested wild success: claim payout costs had dropped by
, yielding greater savings for the company than originally predicted. A subsequent report comparing data from before, during, and after the test confirmed sharp reductions in costs and even more dramatic gains in the number of policyholders whose claims were closed without any payment at all…