Tag Archives: Communications

Breaking Those Competing Commitments To Change

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Volunteer! Business metaphor

Even the most supportive team member can derail organizational change

Change is always difficult in an organization. For a myriad of reasons people resist being taken out of their comfort zone and asked to take on new tasks or modify old ones. It is for this reason that “we’ve always done it that way” is such a comforting way of doing business (see my article 15 Excuses For Not Changing And 5 Reasons To Change The Way We Make Change). But good organizations need to change to keep up with new customer demands, competitive pressures or just to grow and remain efficient.

In life change happens and people adapt. In business change happens and people react. Those who are resistant to change are usually easy to spot and equally as easy to manage and therefore rarely derail a change initiative. However, it is the person that generally supports change and outwardly appears to be working for the implementation of a new initiative that can sometimes harbor a “competing commitment” that can have a more deleterious impact on the success of a new initiative.

The unknown hidden agenda

I know this comes as no surprise to all of you savvy managers, but yes there is a psychological reason that people don’t actually effectuate change despite good intentioned efforts.

Harvard Graduate School of Education lectures Robert Kegan and Lisa Lahey state in their article, The Real Reason People Won’t Change, that “even as they hold a sincere commitment to change, many people are unwittingly applying productive energy toward a hidden competing commitment” causing change initiatives to fail. In fact, they go on to state, “competing commitments cause valued employees to behave in ways that seem inexplicable and irremediable….” These valued employees aren’t deliberately trying to undermine change but rather there is an underlying hidden agenda that conflicts with their stated desire to support the initiative.

According to the authors, competing commitments stem from deep rooted beliefs or underlying assumptions that are formed early in life.  Understanding those underlying beliefs and identifying the “big assumptions” will help to break down those hidden barriers.

I had a client, Joe, who was the head of claims for a large organization.  Joe was one of the biggest supporters of a large change initiative to reorganize and modernize the operation. Joe’s management style was to take on work that should have been done by subordinates. He had a very difficult time delegating, and even when he did, he would often re-do the work to ensure it was being done correctly.  Joe knew the organization had problems with technology, staffing and most importantly the ability to deliver consistent results.  As initiatives in the project were designed, Joe was supportive and helpful in identifying problems and offering ways to change and improve the organization.  However, as a particular project was being implemented suddenly Joe would be unavailable or would find a reason why the change he supported, and agreed to, wouldn’t work. Joe’s competing commitment was that the work couldn’t be done if he didn’t do it. His underlying big assumption was if he delegated the work and it was done wrong it would show that he truly didn’t have the management skills to warrant his position.

Joe was someone who started as a field adjuster and worked his way up through management. He worked with many around him that had formal training or advanced degrees and Joe felt the best way to succeed was to become the expert on certain issues and hold them close to ensure his value. This underlying belief system was subconsciously impacting his ability to make change.

Manager = Psychologist = Results

So how does one break the underlying big assumptions?

Whether you realize it or not, part of being a good manager is developing skills akin to a psychologist.  You have to listen, be empathetic to the issues, and help to provide solutions and coping mechanisms to elicit results. Kegan and Lahey give three steps managers can take to help break through and employee’s resistance to change. This is not some quick hit magic pill and takes time and energy to achieve results.  Each step is designed to help draw out what drives a person to be adverse to change.

Step 1 – Diagnose the competing commitment

Digging up a competing commitment will take a small commitment of its own and a few hours to to realize there is another voice countering an employees desire to make things work. The authors suggest these questions be worked through:

  • What would you like to see changed at work, so you could be more effective, or so work would be more satisfying?
  • What commitment does your complaint imply?
  • What are you doing, or not doing, to keep your commitment from being more fully realized?
  • Imagine doing the opposite of the undermining behavior. Do you feel any discomfort, worry or vague fear?
  • By engaging in the undermining behavior, what worrisome outcome are you committed to preventing?

Step 2 – Identify the big assumption

Big assumptions are the elephant in the room within your subconscious.  It is fairly understood and can be identified but often hard to make the connection to the actions a person takes.  “People often form big assumptions early in life and then seldom, if ever, examine them.” One way to understand the big assumption is to invert the competing commitment. Like Joe who couldn’t delegate because he felt the work wouldn’t get done would have a big assumption that would be that if he didn’t do the work it won’t be done right and people would discover he didn’t have the skills to manage.

Step 3 – Test – and consider replacing the big assumption.

Sounds easier said than done. However the trick here is to get the employee to understand their big assumptions and test them as situations come up. From there, the employee can try and behave differently and try and replace those assumptions holding them back.  Changing deep rooted behavior is obviously the goal but even getting an employee to understand and test these assumptions will have a positive impact on a projects success.

It’s worth the trip

Kegan & Lacey point out that “while primary commitments nearly always reflect noble goals that people would be happy to shout from the rooftops, competing commitments are very personal, reflecting vulnerabilities that people fear will undermine how they are regarded both by others and themselves.” Achieving success is no easy task but managers should not be deterred.  Trying to understand and get to the bottom of such competing commitments and big assumptions will in and of itself provide management with additional insight that will undoubtedly help to move the project forward.

How do you deal with stalled projects and understanding people’s resistance to change?

 

How Would Albert Einstein Approach Claims

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Albert Einstein must have been a claims manager!

As we begin the New Year it is always a time to reflect and look forward to new beginnings.  Recently an executive in my company sent along some words of wisdom from Albert Einstein. Einstein was an interesting character known not only for his scientific brilliance but also for his quick wit. He produced some wonderful quotes which I believe were directed to the claims industry.

OK maybe they weren’t written with the world of claims in mind, they are nonetheless applicable.

 “Setting an example is not the main means of influencing others, it is the only means.”

Claims departments should be leading companies in how they run their business. Claims departments are the fruits of the product being sold and when an insured buys a policy it is claims that serves up the services paid for. One of the best ways to retain and grow new customers is by “setting an example” in claims. Ensuring customer service metrics are met and exceeded and developing new ways to assist the customer is not the “main means of influencing others, it’s the only means.”

“Any intelligent fool can make things bigger and more complex…it takes a touch of genius—and a lot of courage to move in the opposite direction.”

There is a trend for more systems, more technology and better information in claims departments. I am a big supporter and believe it’s about time the industry wakes up to the power more claims data can have in making departments more efficient and providing robust information to improve the business. Regardless, providing more complexity and bigger technology solutions is not the only answer. Be a “genius” and go smaller and less complex in building and implementing claims software.  We have the technology it just needs to be used correctly.

“Not everything that can be counted counts and not everything that counts can be counted.”

This is one of the biggest claims dilemmas. We are being overwhelmed with data and that can be a good thing. Regardless, the fact that it can be measured doesn’t mean it is actually adding value to the process. Take a look at your metrics and really explore if what is being counted “counts.”  On the other side, there are things in claims that unfortunately can’t be counted perfectly. Given how climate, legal issues and other external factors change rapidly, comparing claim metrics from period to period is sometimes a difficult exercise. Regardless, striving to “count” what “counts” is what the industry needs to continue to do.

“If you can’t explain it to a six-year old, you didn’t understand it yourself.”

Wouldn’t it be great if we could all work like this? Let’s be realistic, if you can’t explain your claim to management, opposing counsel, the claimant, in an easy simplified way then you probably don’t understand it yourself and will never get to the desired outcome.  Like his quote on being a genius by making things smaller and less complex I say get to the point. It is still important to get all the facts and make sure all the “i’s” are dotted and the “t’s” are crossed, but do it in a way that will allow you to truly understand the claim and be able to explain it.

“Nothing happens until someone does something.” So go make it happen!

Claims And The Investigative Journalist And Learning From All The President’s Men

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Digging for the accurate story is a claims person’s goal

The other day I was watching All The President’s Men, the story of Bob Woodward and Carl Bernstein, The Washington Post reporters who broke the Watergate scandal wide open.  If you have not seen the film then please accept this as my “two thumbs up.”

What does this have to do with claims you may ask? Keep reading and you will see.

Woodward and Bernstein were investigative journalists. Their job was to uncover facts that would lead to other facts that would lead to a supported conclusion. There was a lot at stake for the Washington Post if the story was wrong, and even more at stake for the country if the story was right. The process was well laid out in the movie with the two journalists following one lead to another and researching and following up to support their eventual conclusion.  Given what was at stake, the Publisher made it clear to the two reporters that there was no story if it was only supported by innuendos and accusations and no proof. Once the support was there, the story ran and the rest is history.

Sounds a lot like a claim file to me.

It is the claims professionals responsibility to figure out what happened and then come to a supported conclusion when evaluating and settling a claim. As there was for the Washington Post, there is a lot at stake for an insured, a claimant and a company if decisions are made in haste. Getting the conclusion right or wrong can have significant financial consequences for all parties involved. Prior to spending money on claims, good claims practices dictate that there is support for the decisions to settle and pay claims. Being a claim professional is a lot like being an investigative journalist. Figuring out what happened and why is critical to making the appropriate assessment.

Technology has really helped those investigations

Unlike Woodward and Bernstein back in the early 1970’s, claims professionals have a tremendous amount of technology available to them to help figure out claims problems.  There are two great scenes in the movie that truly reflect how times have changed when it comes to conducting even basic investigations. Back in the day, even simple tasks, that we all take for granted today,  would have taken hours and multiple resources to complete.

In the movies, the reporters found a name on a check and had no idea who the person was or how to contact them. Imagine that issue today – no big deal – go online, plug in the name to Google, and presto a list of information including addresses, phone numbers, job descriptions and maybe even photographs appears in seconds.  Not back in 1973 where Bob Woodward (played by Robert Redford) is seen sitting in a room with phone books from all over the country looking for a name. Another staff person comes into the room and was able to find a photograph in what was called the “clip file.”  I can only imagine how long that took and how many resources were needed to find the photograph alone.

In another iconic scene from the film, the two reporters needed to find out what books had been taken out by a White House staff member from the Library of Congress. The two were handed boxes and boxes of slips of paper used to document the check out of books from the library. In a great piece of film making, there is an overhead camera angle of the two reporters going through every slip of paper in what would have taken hours if not days. Of course, they never found what they were looking for. Today the same task would have taken seconds.

Think about the tasks you do as a claims professional and try and imagine not being able to use even basic technology to find a name or locate a witness.

Just remember, technology isn’t everything in claims

I have always been a big proponent of good systems to enhance a claims professional’s ability to get their job done. Regardless,  claims technology should allow the claim handler to be a claim handler and free them to be more analytical and less ministerial. Unfortunately, technology has often brought more work with little relief. As more claims can be processed faster, there has been a greater emphasis on dotting I’s and crossing T’s and less on outcomes.  While it is important to accept tremendous efficiencies technology has brought to the claims process, do not forget that the true art and skill of claims is in the ability of a claims professional to analyze the information and make an appropriate decision.

Tell us your investigative journalist claims story

Promote Creative Thinking To Get The Most Out Of Your Claims Staff

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So how do you train the next leaders in claims? How about challenging their creativity!

If you do not know about TED, I strongly recommend you take a look. To quote them directly:

TED is a small nonprofit devoted to Ideas Worth Spreading. It started out (in 1984) as a conference bringing together people from three worlds: Technology, Entertainment, Design. Since then its scope has become ever broader.

I recently watched the clip below from the TED archives and was so fascinated by the concepts I just had to relate them to claims.  Good workers are sometimes all that claims departments look for and, given the nature of claims these days, it is not a bad thing. There is so much to do and so little time to do it and good workers, however you define them, are great to have. But how often are creative thinkers found and rewarded?

I am a big proponent of new ways of looking at claims and trying to get people to think out of the box (see Change Hats With Someone And Free Your Mind To Make Your Claims Operation Better and Is your claims department becoming a bus company?). With increases in technology, more claims specialization and the constant pressures on staffing, the ability to freely think, analyze and resolve claims creatively is being challenged.

Sir Ken Robinson is considered a “Creativity Expert” and led the British government’s 1998 advisory committee on creative and cultural education, a massive inquiry into the significance of creativity in the educational system and the economy, and was knighted in 2003 for his achievements. He has most recently published a book, The Element: How Finding Your Passion Changes Everything, which is a deep look at human creativity and education.

Good workers but not creative thinkers

Take a look at the video below with Sir Ken. He is truly and a dynamic speaker and the will engage you quickly.  In this clip, Sir Ken asks why don’t we get the best out of people? He argues that it’s because we’ve been educated to become good workers, rather than creative thinkers. Do you recognize that employee in your organization?

Two suggestions to help promote creativity

So how do you promote creativity? How do you get the claims staff to try new ideas? It is difficult to encourage creativity when claims have to be regimented and everything is being monitored and standardized. Regardless, there are ways to attack the creative mind to open up new ways to manage claims.

  1. Challenge staff to be more creative when looking at problems. When facing a difficult situation try and put together an old fashioned brain-storming session to allow free flowing ideas no matter how crazy. The idea here is to promote creativity and come up with new ways to solve problems.
  2. Another way to try and teach creativity is to tell war stories. Have a war story lunch and see who has resolved a claim in the most creative way. I am sure you will be surprised at how creative people are and retelling those stories will help stir the imaginations of others.

How do you think creativity plays a role in claims? What have you done to encourage free thinking?

Increasing Claims Satisfaction Doesn’t Mean Increasing Staff

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Looking At The End of the Rainbow For Your Claims Satisfaction Pot Of Gold?

Is it possible to increase claim satisfaction and decrease cost at the same time?  Many claim representatives say no.  Some view that satisfaction is driven by the ratio of adjusters to claims – having more people to handle claims means higher satisfaction, although also higher loss adjustment expense.  Some believe that higher settlement amounts result in higher satisfaction and higher loss costs.

There is some truth to these views.  If having more people means that estimates are completed earlier, calls are answered instead of going to voicemail, and checks are issued faster, then satisfaction will likely increase.  If the higher settlement amount meets, but not necessarily exceeds, previously set expectations, higher satisfaction may result.

Drivers of Customer Satisfaction In Claims

But is hiring more people or paying higher settlements required to increase satisfaction?  Let’s look at some of the key drivers of claim satisfaction from the JD Powers survey:

  • Expressing genuine concern
  • Ensuring customer is at ease with the claims process
  • Giving customers a time line and meeting it
  • Providing flexible appraisal appointments
  • Answering all customer questions
  • Managing expectations regarding the settlement
  • Returning phone calls
  • Sharing information between representatives
  • Providing proactive updates
  • Avoiding negotiated settlements

Communication and Reducing Cycle Times Are Keys

Communication and cycle time are the key themes among these attributes.  Reduced cycle time generally results in lower costs for most industries.  And, there are many ways to improve communication in the claim process that can also reduce cost.  Take, for example, claim status.  In many companies the process goes something like this:

  1. Customer calls agent to inquire about claim status
  2. Agent calls claim adjuster because he or she can’t access that information in the system
  3. Agent calls customer

This is a simplified process that doesn’t reflect the phone tag that usually occurs.  Still, a minimum of three calls are required to answer a question that might have been answered on the first call.  Better yet, if the information were available online, no calls would have been required, saving agency and claim adjuster time as well as telephony costs.

There are many other examples of ways to reduce cost and improve customer satisfaction at the same time:

  • Automated email or voice updates on claim status to minimize inquiry calls
  • Expanded capacity in drive-in claim centers to reduce usage of field adjusters, a more expensive and lower satisfaction option
  • Earlier identification of total losses, typically a low satisfaction claim, to reduce storage and rental costs and overall cycle time
  • Work load balancing across claim offices to ensure timelier claim handling and increase staff utilization
  • Increased usage of non-exempt staff for inquiry calls as well as back-office functions to free up adjusters for more complex issues
  • Automation of any part of the claim process that results in reduced cycle time for the customer and reduced adjuster time

Clearly, having the right level of staffing and meeting customer expectations regarding settlement are important to maintaining or improving customer satisfaction.  But hiring more people or paying more than required will not necessarily increase satisfaction unless the fundamental communication and cycle time requirements are met.  Insurers would be better off focusing first on those opportunities that improve customer satisfaction and reduce cost at the same time – creating a “win-win” – as opposed to throwing money at a satisfaction goal, with negligible economic benefit.

How do you increase satisfaction without increasing staff?

The Claims Writing Workshop: Write How You Speak! Just Leave Out The Color Commentary

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Don’t make your claims writing complicated when you can keep it simple!

I was startled by a claims manager who shook his head sorrowfully and told me, “It’s terrible. All my adjusters write the way they speak!”

I thought, “How strange. Writers should write the way they speak.”

When I asked the manager what he disliked about writing that sounds like human speech, he said, “The writing is too colloquial, too disorganized — like stream of consciousness — and it doesn’t get to the point.”

Well, colloquialism and slang are not called for in claims writing, but natural, simple writing that sounds the way one human being would speak to another is certainly preferable to the legalese and jargon that permeates so many claims letters.

As for lack of organization, it’s true that speech is a more spontaneous medium than writing. No one expects us always to talk in full sentences or get to the point instantly or not digress occasionally in a conversation. Writing does require a plan and should get to the point quickly. This “plan of action,” meshed with the warmth and color of human speech, yields the best writing.

Leave out old-fashioned phrases, clichés, or pompous phrases

Anyone who has ever dictated a letter has had to confront the sounds of old-fashioned phrases, clichés, or pompous phrases that they have written. Suddenly, there may be a moment of awareness that what has been dictated is a far cry from how you would have expressed the same thoughts in a conversation. So “writing the way you speak,” with obvious caveats, is good advice.

If you hear yourself ramping up small words into big ones, ask yourself why you are doing this. Are you trying to sound “businesslike”? Are you showing that you have been educated and know these big words? Are you parroting what an attorney just wrote to you? None of these reasons justifies using noticeably
stodgy or cliché language in a letter.

I think that many managers believe that “writing the way you speak” opens the floodgates to colloquialism, slang, and careless punctuation that may be used in e-mails will be used when writing to insureds, attorneys, and claims commissioners.

But e-mail is a separate entity from a business letter. It occupies a place somewhere between the informality of speech and the relative formality of a business letter. You might not always use a complete salutation (e.g., “Dear Mr. Wheeler” in an e-mail, but you would certainly use one in a letter. You might skip the closing (e.g., “Sincerely,”) in an e-mail, but don’t try it in a business letter.

Don’t Intimidate

The harshest criticism of claims letters is that they are intimidating. This has several unpleasant side effects. First, an intimidated insured might well call an attorney just to decipher the letter. Second, the letter’s tone can be so abrupt, formalistic, or threatening as to cause an insured to fight back harder or at least to slow up the claim handling. Third, if the adjuster writes a convoluted letter that also happens to break with the company’s idea of proper claims handling, a judge or jury will be less forgiving because they will react as much to the letter’s language as to the details of how the claim was handled.

So, write using the model of speech’s simplicity, directness, and warmth. Just don’t  mirror speech’s unplanned distraction and tendency to ramble.

How Do You Effectively Manage A TPA? Speak Up And Be Active!

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Become The Squeaky Wheel To Actively Manage TPA Outcomes

As claim practitioners, most of us are familiar with what to look for when we shop for a third-party claim administrator (“TPA”).  One recent discussion on this blog cited such elements as claims systems, data reporting capabilities, and quality control (6 Essential Elements When To Explore When Choosing A Third Party Administrator).  While such things are important, we often overlook one basic factor that is key to the success of our outsourcing venture: ownership of the TPA relationship. Here I’m not speaking in financial terms, but, rather, about a fully-dedicated partnering approach by the insurer or self-insured corporation to managing TPA performance.

During my career where I have managed and audited hundreds of unbundled claim programs, I have been frequently struck by the dearth of oversight exercised by insurers and corporation over TPAs.  Too often the attitude of the buyer of claims services is that it is the TPA’s problem if claims are not handled appropriately or losses are under-reserved. While such an arms-length approach may appeal from a contractual perspective, it does not fully consider the potential impact of TPA performance (or non-performance) on program profitability and relations with reinsurers, regulators, and other stakeholders for which the buyer remains responsible and ultimately bears the brunt for better or worse.

In my experience, the risk of sub-optimal TPA performance, and the resulting ills, declines with buyer oversight of the TPA.  Moreover, TPAs generally prefer to work with an insurer or self-insured that wants to work with them and remain involved in the claims process.  This enables the TPA to better understand and respond to client needs and requirements and is less likely to lead to unacceptable outcomes for the client and conflicts between the parties.

How to stay squeaky

With respect to individual claims, insurers and self-insureds should pro-actively provide feedback on the claim actions undertaken by the TPA, propose strategies for future claims handling, review case reserve adequacy, and ensure the TPA remains focused on claim disposal.  At a “big picture” level, TPA performance data should be periodically reviewed for consistency with claims service requirements, claims best practices, and financial goals.  Performance issues should be surfaced, and solutions identified and quickly put into action.

Getting the most from TPA relationships is just as much up to the buyer as it is the TPA. We can avoid the situations that lead to finger-pointing if we take responsibility and become an active business partner with our claim service providers.  This is just another example of the squeaky wheel getting the grease.

Absence of procedures to notify reinsurance is a basis for bad faith

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Recently I was discussing bad faith and notice procedures with attorney Phil Loree Jr., an expert on reinsurance and arbitration issues and author of the the Loree Reinsurance and Arbitration Forum blog.  I thought this was a timely conversation as it reinforced the concepts regarding procedures and the potential risks when they are not in place. As with my recent post regarding the breakdown of procedures in a insurance agent’s office, the cost of failing to have proper policies in place was at issue (see my article Failing to document files can be costly).

Phil reminded me of the seminal case of  Unigard Security Insurance Company Inc v. North River Insurance Company 4 F3d 1049 (1993). The case established the rule that an insurance company can be held to have committed bad faith for lack of notice to a reinsurer if there was a showing of recklessness or gross negligence. The court found that the failure to implement a policy to notify reinsurers could be an example of a willful disregard of the risk to the reinsurer and would be considered gross negligence.

Unigard and the proposition of bad faith

A high level of good faith is owed to reinsurers

The Court in Unigard first began by defining the level of good faith owed by an insurer to their reinsurer:

“…the duty of good faith requires the ceding insurer to place the reinsurer ” ‘in the same [situation] as himself [and] to give to him the same means and opportunity of judging … the value of the risks.’ ” [citation omitted] …Nevertheless, because information concerning the underlying risk lies virtually in the exclusive possession of the ceding insurer, a very high level of good faith–whether or not designated “utmost”–is required to ensure prompt and full disclosure of material information without causing reinsurers to engage in duplicative monitoring. [citation omitted]. The question, then, is what good faith requires of a ceding insurer in the notice context.”

The establishment of the bad faith standard

The court continued to establish a standard for bad faith that is differentiated from simple negligence:

“… we do not think simple negligence in not disclosing a material fact constitutes bad faith. … Virtually every material non-disclosure will be the result of at least negligence, and, if bad faith and negligence are equated, no showing of prejudice would ever be required.

We thus think that the proper minimum standard for bad faith should be gross negligence or recklessness. If a ceding insurer deliberately deceives a reinsurer, that deception is of course bad faith.”

Lack of procedures alone can be deemed reckless

With the standard established as gross negligence or recklessness, the court discussed how the failure of implementing proper notification procedures was essentially a reckless act:

“However, if a ceding insurer has implemented routine practices and controls to ensure notification to reinsurers but inadvertence causes a lapse, the insurer has not acted in bad faith. But if a ceding insurer does not implement such practices and controls, then it has willfully disregarded the risk to reinsurers and is guilty of gross negligence. A reinsurer, dependent on its ceding insurer for information, should be able to expect at least this level of protection, and, if a ceding insurer fails to provide it, the reinsurer’s late loss notice defense should succeed.”

To have procedures or not, that is the question

There is an ongoing debate in the insurance industry about maintaining claim policy manuals as a potential risk in a bad faith action. The view is that if you have specific written procedures, and your claims staff does not follow them, then that could be used against them in a bad faith action. Here a court specifically states that failing to have procedures could be considered bad faith in the reinsurance notice situation. Recently, Claims Magazine discussed the very topic in an article by Kevin Quinley, Putting Procedures In Writing (Claims Magazine, 1/5/2010).  I agree with the general proposition from the article:

In terms of bad-faith worries and claim manuals, it is often better to explain one miscue than to tell a judge or jury that the insurer has nothing in writing for claim personnel to use as their guide, and that there are no minimum performance requirements.

Whether in the Unigard example above, or in the recent award against the agent I previously commented on, failing to have procedures or follow them can have a costly outcome. Claim handlers need some kind of guidelines to understand expectations, and to establish a baseline to measure performance. When handlers are trained on good practices, and are measured on those practices for compliance through and internal review or audit program, risks are diminished.

Focusing on good claims practices will not only lower exposure to bad faith, but will help reduce leakage, lower expenses and improve customer service.

Better claim reports can help improve producer/carrier communications (take our poll)

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Why do producers feel it’s like talking through tin cans when communicating with carriers?

Sam Friedman, National Underwriter Editor-in-Chief, recently wrote in his blog (A View From the Press Box) about the need for carriers to improve communications with Producers. Mr. Friedman was discussing the Producer Satisfaction Survey of 1,596 qualified agents and brokers by Deloitte’s Insurance Industry Group—conducted in partnership with National Underwriter (read more at Producers Seek More Input).  Improved producer carrier relationships can be a competitive advantage to help increase profitability in tough economic times. According to the survey, a key differentiator for carriers to attract more business from their producers is in the areas of claims handling and technology.

I believe that there are two areas in claims that add to communication breakdowns:

  • Poor technology creating limitations
  • Failing to use existing technology

Most modern claims systems can create automated customized reports. Producers should be able to ask for specific reports and have them electronically scheduled for delivery. If a carrier cannot provide this service it is because their technology is not up to speed or is not being used correctly. The reality is most claims departments fail to use their existing claims systems to their fullest capabilities. At the very least automated reporting should be available to include regular loss runs and trending reports, as well as notification of significant claim events. Often all you need to do is just ask for what you want.

There are of course many steps that can enhance producer/carrier relationship as it relates to claims. From the carrier side, producers assisting in getting information from insureds, promptly reporting losses and helping with deductible issues are just a few. Carriers can work with producers to provide prompt detailed reports which will benefit both parties through improved risk selections and better underwriting.

Suggested steps:

  • Agree on a suite of basic reports to provide producers monthly including loss runs and overall summary metrics that can show loss trends
  • Establish an agreed upon significant claim event report (reserve change, trial date, discovery deadlines, etc.) for prompt notifications
  • Automate reports to run and send on regular intervals

Better reporting will go a long way to improving relationships, and can only help increase profitability and enhance service to the policy holders.

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