For a long time, claims leaders have looked to Cycle Time as the default Key Performance Indicator (KPI) for checking if their claims operation runs smoothly. It’s straightforward: you measure how long it takes to close a claim from start to finish. Shorter is better, longer means something’s broken. Simple enough, right?
Here’s the thing, though: cycle time doesn’t tell you the whole story.
Cycle time has a blind spot that becomes critical once volumes rise, channels multiply, and teams are asked to do more with the same headcount. It measures how long a claim stays open. It doesn’t measure how much work it actually takes to move it forward.
When Two Claims Aren’t Really Equal
You can have two claims that both close in 10 days. On paper, they look identical. But behind the scenes? One sailed smoothly from intake to settlement with barely any intervention. The other one? It got stuck three times, bounced between different adjusters, needed constant follow-up, and somebody probably muttered “not this one again” at least twice.
Those claims aren’t the same. But the cycle time KPI treats them like they are.
That’s why more claims teams are starting to pay attention to a different metric alongside cycle time: Active Work Time per Claim. Instead of just tracking how many days elapsed, active work time measures something more valuable: the total minutes of human effort spent across the claim lifecycle. This measures every minute adjusters actively spend working on a claim: data entry, document review, communication drafting, system searches, decision-making.
Many teams also track a complementary metric: Touches per Claim, which counts the total number of handoffs, reassignments, and manual interventions required to move a claim forward. High touch counts often signal workflow friction, unclear ownership, or missing automation.
Together, these metrics reveal what cycle time can’t: the true operational cost of your claims process.
Why This Matters: Most Claims Are Just Waiting
The reality is that most of a claim’s lifecycle is waiting. Waiting for documents, for the customer to respond, for approvals from managers or vendors.
During all that waiting, your adjusters aren’t doing anything on that claim. They’re working on other claims, as they should be.
But then you’ve got those other claims, the ones that eat up time in a thousand little bites. Reading through email chains to piece together what happened. Re-uploading documents because they didn’t attach correctly the first time. Fixing data entry mistakes. Explaining the same situation to three different people because it got reassigned twice.
From a staffing perspective, those idle days don’t really cost you anything. But those constant small tasks? They add up fast. You can make your cycle times look great and still have completely overwhelmed adjusters and a higher error rate that leads to leakage, if the work itself is fragmented and inefficient.
What Active Work Time Actually Reveals
When you start measuring active work time, you stop guessing where capacity goes. You see which parts of the workflow create unnecessary effort and which types of claims quietly consume far more resources than they should.
Common drivers of high active work time include:
- Sorting shared inboxes to determine which adjuster should handle what
- Entering the same information multiple times across systems
- Rework caused by reassignment or missing information
- Searching across systems to reconstruct claim context
- Drafting similar emails and letters that should be templated or automated
Once you can quantify effort, you can have a different conversation internally. Not “Why did cycle time go up?” but “Why did this category of claims require twice the human effort this month?”
Here’s what really matters: it shows whether your experienced adjusters are spending their time on the things that need judgment and expertise, or whether they’re stuck doing administrative cleanup.
Where Modern AI Claims Tools Change the Equation
This is where modern AI claims tools become practical. The biggest impact isn’t “AI closes claims faster” as a headline. It’s that AI reduces the coordination work humans do just to keep claims moving.
Instead of relying on adjusters to notice what’s ready, what’s missing, or what’s stuck, these AI tools continuously track claim state, communication flow, document completeness, and task dependencies. When required inputs arrive, they trigger the next action automatically. When information is missing, they request it directly. When a task can progress without judgment, it does. This prevents claims from stalling simply because no one noticed they were ready to move forward.
Advanced AI tools, like Clive™, Five Sigma’s Multi-Agent AI Claims Expert, reduce active work time by maintaining continuity. Documents are summarized as they arrive, key facts are carried forward, and routine decisions are executed consistently according to insurer-defined rules.
The adjuster steps in where you actually want them: judgment calls, exceptions, negotiation, and customer moments that require experience.
The result? Lower active work time per claim and fewer touches per claim. Less effort, fewer handoffs, more capacity for your team.
What Claims Leaders Gain by Tracking Active Work Time
Cycle time is still a KPI you keep. You need it for customer experience, compliance, and leadership reporting. But active work time is the KPI that explains operational reality, especially when you’re trying to protect adjuster capacity and reduce friction without cutting corners.
If cycle time is the external clock, active work time is the internal truth. It tells you where work is expanding, where your process is leaking effort, and what’s worth fixing first.
How to Get Started
You don’t need perfect data to start. Begin by sampling a typical week:
- Pick 20-30 closed claims across different types
- Have adjusters log active work time for each (or estimate from system timestamps)
- Count the touches per claim (reassignments, manual interventions, handoffs)
- Compare high-effort claims to low-effort claims with similar cycle times
The patterns will emerge quickly. You’ll see exactly where capacity is bleeding and which process improvements would have the biggest impact.
FAQs
Q: Can active work time be reduced without replacing existing claims systems?
A: Yes. You don’t need a full rip-and-replace to reduce effort. AI layers can sit on top of an existing claims management system and automate intake, document handling, and coordination work while keeping your existing controls and workflows intact.
Q: Can active work time help prioritize automation initiatives?
A: Absolutely. It’s one of the clearest ways to decide what to automate first because it shows where human effort is actually concentrated. If 40% of active work time is going to inbox triage and manual routing, that’s your starting point.
Q: How does this relate to the “touches per claim” metric some teams already track?
A: Good question. “Touches per claim” traditionally counts handoffs and interventions. It’s a useful indicator of workflow complexity. Active work time takes it further by measuring the actual minutes spent, not just the number of interactions. Both metrics together give you the complete picture: how many times people touched the claim and how much effort each touch required.
