Outcomes, Effectiveness, People: A Conversation with QBE the Americas Chief Claims Officer Dean Harring

By 000983 – September 27, 2010

The Inside SPOT: An Interview with Dean Harring, the Chief Claims Officer for QBE the Americas

The Inside SPOT profiles our industry leaders and executives. In these discussions we explore how these dedicated leaders began their careers and how they see the industry today. In this interview, Dean shares his astute insight into the industry and its development. Like many claims professionals, Dean did not necessarily seek out claims as a career, but once in he stayed for life.

The Claims SPOT: Where did you grow up? What part of the country?

Dean Harring: in New England, in the suburbs around Boston.

The Claims SPOT: When you were younger, what did you want to be when you grew up?

Dean Harring: I always did well in school, and because I was the first in my family to go to college, my parents really had their hearts set on seeing me become a doctor. So I was a pre-medical student in college and I graduated with a degree in Biology, planning to pursue a career in medicine or dentistry.

The Claims SPOT: Tell us about your first claims job

Dean Harring: After college, I applied to graduate school (Dentistry), but I needed to earn a living while my application was being considered. Liberty Mutual in Boston had trainee positions open in both Claims and Underwriting.  Not knowing much about either, I took the Claims job because it came with a company car and I needed a car!

The Claims SPOT: What was the most unusual claim you ever worked on?

Dean Harring: I’m not one of those Claims guys who loves to tell war stories about claims, but I will tell you about a formative claims experience I had early in my career.

I went to college in Maine, and I started my Claims career as an outside adjuster in southern Maine.  Back then, back before Special Investigation Units were first formed, before fraud scoring software was invented, adjusters were the front line in the fight against insurance claim fraud.  We were trained to recognize indicators of fraud and to look for them as we handled claims.

One Saturday I drove by the home of a fellow who had been collecting workers’ compensation benefits for several months because of a back strain. There he was, on top of his house, re-shingling his roof. I watched for a while as he climbed up and down a ladder, carrying bundles of shingles and tools, then I pulled into his driveway.  I had handled his claim from the beginning, we had met face to face many times, and he knew why I was there.

I asked him how his back was feeling.  “I’m actually feeling much better—I think I’m just about ready to get back to work,” he offered, without missing a beat.  And the next week he went back to work.

That experience helped me understand the impact active claims management can have on loss costs.

The Claims SPOT: What was the best result you remember achieving as a claims handler?

Dean Harring: One of the unfortunate realities of claims handling is that almost every day involves interacting with people who have had bad things happen to them. The corresponding upside, of course, is that claims handlers are usually in a position to help those folks recover and get back to life as usual. I remember a claim involving an elderly woman who had a fire at her home.  She tearfully told the television crew at the scene that she felt very alone. A few hours later she told her agent that her insurance company’s claims response had been so quick and so thorough that she didn’t feel alone anymore. That’s a good result, as far as I’m concerned.

The Claims SPOT: When did you realize that you wanted to stay in claims and make it your profession?

Dean Harring:  I was hooked within the first 90 days and I can honestly say I’ve never looked back.

To me, Claims work offers an intriguing and appealing mix of investigation, legal and medical analysis, psychology, strategy, negotiation and project management. Every claim is a unique case study featuring different fact patterns, personalities, agendas and challenges.

If you’ve seen the classic 1944 movie Double Indemnity you may remember Edward G. Robinson as a tough talking, cigar smoking claims manager telling a young recruit that a claims man (claims handlers were all men then, of course) is “…a doctor and a bloodhound and a cop and a judge and a jury and a father confessor all in one…”  How could anyone resist that combination in a job?

Incidentally, I’ve had no second thoughts about dental school, either. After all, how many happy dentists do you know?

The Claims SPOT: What do you think are the biggest roadblocks for people entering the profession now?

Dean Harring:  Recruiting claims talent can be challenging. The claims management operating environment now is much more complex and unforgiving than it was when I started in the early-1970s.  In many ways claims jobs are also more narrowly focused, since specialization tends to produce better claim outcomes. Yet claims people are still routinely developed through on the job training that looks very much like an apprenticeship process.  Unfortunately, claims career opportunities often seem puzzling and unattractive to folks outside the business, but that’s a road block that can be addressed through better marketing and communication.

The Claims SPOT: When you got your first management job, what was your biggest concern? How did that change as you moved up through management ranks?

Dean Harring: My first concern was transportation related, because my company car was taken away once I was promoted so I had to buy a new car!

My biggest concern, however, was the mental and emotional shift I needed to make in order to be successful, i.e., shifting from being one of the team to being the team leader.

I had held many leadership positions outside of work (in the Boy Scouts, at school, in athletics, at church, in my college fraternity, etc.) but I never really had a management position so it was all new to me.  It didn’t take me long to realize that managing a team of claim handlers was more challenging and more rewarding than managing a portfolio of claims.

Moving up requires taking chances, stepping out of your comfort zone, enhancing your awareness, adjusting your levels of work,  refining your strategic vantage point and fine tuning your communication and networking style.  My most powerful learning experiences have come in situations where I championed a course of action that challenged the status quo, because those change management challenges were intense, highly pressured, and very public. Each of them helped me move forward confidently to the next challenge.

The Claims SPOT: What do you see as your primary charge in your current role?

Dean Harring: I run a claims management organization that is focused on loss cost management, operating efficiency and effectiveness, service and reputation, stakeholder communication and the attraction and retention of a high quality workforce. Our goal is to create and maintain a “no surprises” operating environment so competence, awareness and communication are critical.

The Claims SPOT: If you could look into the future, what do you see claims organizations in the future looking like?

Dean Harring: It’s interesting how the basic tasks involved in handling a claim are still pretty much the same now as they were many years ago, but the processes involved in accomplishing those tasks are quite different.  Automation, business rules and decision support systems have streamlined processes such as intake, triage, assignment, vendor management, fraud detection, evaluation, and recovery.

When it comes right down to it, though, Claims handlers make hundreds of critical decisions every day, and those decisions ultimately determine how effectively loss costs are managed. So it makes sense to keep pushing towards an operating environment in which a claim handler has all of the information and decision support he or she needs to make the right decisions, at the time the each decision needs to be made.

Virtual claims operations are already in place in some parts of the world, of course, and they are becoming a reality here as companies invest in modern claims systems.

The Claims SPOT: What are your thoughts about the role of technology in claims today? Is there too much of it? Does it create challenges? Opportunities? Does it take away from strong claims handling skills?

Dean Harring: Technology is just another tool to get the job done as far as I am concerned.  When it is used to streamline processes, provide expert decision support, deliver “just in time” information, detect analytic trends or even monitor performance, I welcome it.  Does it take away skills? Probably not to any greater extent than calculators and spreadsheets have taken away our arithmetic skills.

The Claims Spot: Is there a particular innovative technology that you’ve seen in the claims industry that you think is absolutely game-changing? That really impressed or surprised you?

Dean Harring: No, but I think there are at least a couple of game changing opportunities out there for someone to exploit.

First, there are three major components to loss costs:  unallocated expenses (salaries, rent, etc), allocated expenses (outside attorneys and appraisers, etc), and loss dollars paid to insureds or third parties.  At most companies the expenses stack graphically into a triangle.  The top of the triangle (the smallest part) represents unallocated expense, the middle (some multiple of the unallocated total) represents allocated expense, and the bottom (the largest part) represents loss dollars paid to insureds or third parties.

Managing loss costs means managing all three components of the loss cost triangle. The components are dynamically inter-related so, for example, fewer dollars spent on unallocated expense may translate into more dollars in allocated or loss. Fewer dollars spent on legal defense may increase loss dollars paid to third parties. Since the challenge is to manage total loss costs, claims operations need to incur the most effective combination of unallocated and allocated expense in order to produce the most appropriate level of loss payments to insureds and third parties.  If someone came to me with a process or technology that would help me identify and maintain the optimal mix of expense types for my business, I would be a very interested customer.

Second, the on-the-job, apprenticeship model used to develop claims handlers takes too long and costs too much. I think it’s time to create a fast track development model that maximizes interactive technology and simulation scenarios to condense the process.

The Claims SPOT: If you were giving advice to claims executives in today’s environment, what would you stress? What should they be focused on?

Dean Harring: I would urge them to focus on four things:

1. Outcomes.  Process and technology are interesting, but if they don’t help produce better outcomes in loss cost management, compliance, customer service, stakeholder communication or reputation then they are a distraction.
2. Efficiency and effectiveness.  An efficient process minimizes waste, expense and effort. An effective process produces a desired outcome.  Understand the difference. In a Claims operation, the time to focus on gaining efficiency is sometime after effectiveness has been demonstrated. After all, why try to become more efficient at something that isn’t being done effectively?
3. People. Claims management is a knowledge business and claims handlers are knowledge workers who are critical to the claims management process.  Figure out how to attract, develop and retain the best.
4. No Surprises. Claims operating surprises are trouble and should be avoided. Runaway verdicts, fines, penalties, bad faith exposures, etc.  These surprises have a few things in common:

• They are not happy events
• They involve financial pain and possibly bad publicity
• They generate a firestorm of activity (fire drills), second guessing and finger pointing
• They chew up resources and time as you try to figure out what happened and why
• They reflect poorly on management.

The Claims SPOT: Are there any specific “keys to success” that you’d recommend to a brand new claims professional just entering the industry? What should they always be focused on?

Dean Harring: New claims handlers need to develop a unique basket of skills and characteristics in order to be successful, but I think two of the most important are inquisitiveness and integrity.

It’s also important for new claims professionals to realize that while claims handling is a critical part of the insurance business, it is still only one part of a much larger product and service delivery system.  I got involved in industry education very early in my career, and by earning my CPCU and CIC designations I learned a lot about the insurance business and networked with many people who worked in business critical areas outside of claims.  Those experiences and contacts enabled me to develop a broad “system” perspective of the business, and I know that perspective has created opportunities for me in my career.

The Claims SPOT: Thank you very much for your time. As a last question, and on a lighter note, is there anything about you that very few people know on a personal level that you’d be comfortable sharing with our audience? Any interests or hobbies or likes or dislikes that few people know about you?

Dean Harring: I’m a watercolor painter. I belong to the Smith Island Art League in North Carolina and I’ve sold several paintings at their shows. I think it’s great fun to show people a picture of one of my paintings and then tell them they can’t see the original because it’s in a private collection somewhere!

The Claims SPOT: Thank you again!

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Dean is currently the Chief Claims Officer at QBE the Americas. He has held a number of extremely influential claims management positions, including Executive Vice President of Claims and Operations at GAB Robins, Founder & Principal of Claim Diagnostics, Executive Vice President at CNA, Executive Vice President at Zurich, to name just a few. Among his other responsibilities, Dean also currently serves on the Advisory Board of the Council on Litigation Management.