– January 12, 2011
So Much Work And No Help In Sight
I hear it time and time again from colleagues all over the industry. With cutbacks many are being asked to do more with less.
This trend began several years ago as more technology was implemented into insurance companies. Gone were the support staff; why were they needed when the claims professional could do it all on their own lap-top. Gone were supporting groups like subrogation departments and litigation management assistance; why were they needed when new systems could manage it all.
More efficiency meant more time to do more work. Certainly this will translate to better results…I mean it’s supposed to right? But has it really?
I’m Not Going To Take It Anymore
The claims industry is at a crossroads and needs to change. I know you have heard this one before, but when speaking with people in the business I was reminded me of the famous scene from the movie Network where the anchorman screams out “I’m mad as hell and I’m not going to take it any more”. Check out the clip below to be reminded.
In a recent discussion that I posted on LinkedIn, I asked the question, How do you keep the claims department from become stale? (see prior posting Is your claims department becoming a bus company?). For some reason after seven months of posting I received a flurry of comments on how the industry is facing a crisis of staffing and turnover. Quoting one post on LinkedIn from John M. Beringer:
“A sad fact is the majority of adjusters rarely last for five years. That is not due to a lack of skill or commitment; it has to do with how their pending is counted, the layered management reporting; unrealistic expectations of claims management and management by edict rather than training and critical reasoning.”
While there were many wonderful responses to my question, the general feeling was that case loads have crept too high and there is a lack of emphasis on training and development. We as claims people have a knack for complaining about caseloads, however, this one is truly one that needs to be addressed. With more technology came more expectations for claims professionals to take on more administrative tasks. Departments contracted, and claim counts rose. In my opinion this resulted in an increase in indemnity and expenses (I wish I had the data to support this, but can only i have seen it the file reviews i have conducted over the past year).
In order to excel in this marketplace, claims departments will need to innovate and attract, and maintain, new talent. Unfortunately, we are not an industry that accepts change easily, and for the most part innovation, is slow and not encouraged.
Change Requires Innovation To Be Encouraged
I have quoted Serth Godin before and will continue to do so especially with pearls of wisdom like this:
“That’s not the way we do things around here
Please don’t underestimate how powerful this sentence is. When you say this to a colleague, a new hire, a student or a freelancer, you’ve established a powerful norm, one that they will be hesitant to challenge. This might be exactly what you were hoping for, but if your goal is to encourage innovation, you blew it.”
In my consulting practice (Lanzko Consulting) I am often confronted with clients that say something like “That’s not the way we do thing around here” or, more likely, “that’s how we have always done it.” Change in claims cannot happen unless the organization looks at, and breaks, the old habit of accepting the status quo. Challenging the norm has to become the new norm. Industry executives have known for years about the declining talent pool and that need for changes, yet they have taken few steps to modernize the technology, as well as the process.
Technology is a great tool, but it will never substitute the skills of a talented claims professional. Technology must be implemented into the process to assist, not hinder, claims professionals. We need to move back to a time when claims professionals can be claims professionals. We need to make the job as interesting as it can be, and not purely about automation. Without this, the profession will struggle to attract talented people to its ranks and will certainly cost companies far more in the future.
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Great article Mark!! Until organizations understand that technology has to go hand in hand with creative thinking and analysis, they will continue to experience problems and increased costs in managing and litigating claims. Moreover, organizations also need to understand that an investment in top, experienced talent will result in a decrease in costs and better claim handling.
We can find answers by studying industry leaders whose operations are characterized by high-volume, complex, customer-facing service incidents. Resolving claims in a “production line” environment is inappropriate and ineffective for both adjusters and customers. Technology is neither the enemy nor the solution. Like any tool, it is indispensible in the right situation but of limited value without proper training. Carriers need to develop and implement relevant continuing education, including
“Innovation” training, for all staff. Claim staff should have access to, and proficiency with, at least the same level of technology and problem-solving techniques that they and their customers utilize in their personal lives. Anything less will fail both constituents and prohibit corporate and personal growth.
Hi Marc,
Interesting article…
I would only like to add that as concerns Claims, any claims organization must understand that technology is only a tool. It can not make up for experienced and dedicated individuals. – The only way to attract people into the Insurance – Claims industry ( just as as with any any other industry) is to allow people be innovative and creative in their daily tasks, as well as to foster recognition when a job is well done.
Unfortunately there seems to be a prevailing attitude in most Claims departments of not recognizing the efforts of their staff. – An over worked staff with little or no incentive only leads to what is commonly referred to as ‘churn’ – that is with people leaving one company for the ‘greener pastures’ of another company or the industry altogether.
In addition, don’t forget that the lack of experienced and qualified claims professionals will only grow as the “Baby Boomers” start retiring en mass in the coming years…In fact if my assumptions are correct, every industry will be competing against every other industry for a limited pool of talented individuals.
Yet , I do not see the Insurance Industry initiating training programs for young people who are now desperately looking for jobs. — The industry will be so sorry in the future.. .
Great post Mark. Stephen I agree with your comments 100%. In fact manufacturing is an industry that we can learn a tremendous amount from. Some of the greatest innovators include Apple, Cisco, and other market leaders that have learned to leverage partnership relationships to deliver the highest level of quality, service, and mass customization. The “typical” claims process (to the extent that anything is typical) involves too many discreet components and has become more complex than ever requiring different skill sets than those traditionally found in claims departments. This includes the innovative use of technology to streamline communications, analysis, and processing. Companies that recognize this can either bring in the resources to execute these functions (unlikely in today’s push for improved underwriting results) or establish co-sourcing relationships with partners that they can work with to deliver a more accurate and efficient claims handling process. The key is getting out of your comfort zone and considering new approaches that have worked in other industries that many in our industry are not familiar with.