4 Areas Of Concern From The Latest Insurance Executive Conference

Posted on December 12, 2012 by Marc Lanzkowsky

Gaze into your crystal ball and predict the issues of the past year to be addressed in the coming one!

It’s that time of year. The top 10 lists, the reflections, the can I possibly attend another holiday party and survive through to New Years? Well I will not give you a top ten list but I will list out 4 key issues that seemed to highlight the sentiments of the speakers at the 23rd annual Executive Conference recently held in New York.

The title of the conference was “Driving Growth in the Life and Property-Casualty Insurance Markets.” The annual event brought together several key executives in both the Life, Health and Property & Casualty Insurance arena. This year the audience heard from the likes of Starr Insurance, Endurance Specialty, Aspen Insurance, Lincoln Financial, ING, and Zurich Global Life among others.

Nothing too shocking with these 4 issues to address

While the topics of discussion varied from panel to panel, a set of themes emerged from the various discussions. When looking back over the last year, and forward into the future, it seems that there were consistently 4 areas that these business leaders seemed to be concerned about. Each issue impacted each company differently, however, the the themes permeated throughout the program.

Technology and the use of data. A somewhat mixed statement about technology seemed to emanate from the various speakers. On the one hand it was acknowledged that the industry lags behind in adopting and using technology. Many companies still are working off antiquated systems that could use an overhaul. On the other hand it was noted thatthe industry is filled with valuable data that needs to be analyzed and used to improve outcomes. Companies that can use their data more effectively will have a critical differentiator in the future. Predictive analytics and modeling will be the key to increasing underwriting profit needed in these times of continued low interest rates.
Climate change and catastrophes. With the conference so close to the events and location of Sandy, the talk of underwriting and managing CAT losses was on the mind of many. There is a clear belief that climate change has affected weather patterns and will continue to create larger storms for the foreseeable future. The importance of getting the appropriate rate for risks, being better prepared from a continuity perspective, and looking to opportunities to underwrite new risk and innovative risks were just some of the topics discussed. Some of the issues around CAT management also related to governmental intervention that effectively re-wrtie contracts making it more challenging to underwrite.
Increased regulations. Solvency II, the fiscal cliff, the impacts of Dodd-Frank legislation, Systemic Risk (systemically important financial institution (SIFI) designation), the Federal Insurance Office’s (FIO), unclaimed property, tax compliance with SSAP 101 and FATCA are just some of the many potential compliance issues that could increase costs and expose companies to additional fines for non-compliance. While the general feeling was increased regulation was not going to change the industry for the better, the need to deal with changing regulations was going to have a real impact.
Social media as in customer relations as well distribution. Social media is here to stay and many have begun to address how to use this medium in both dealing with customer complaints or improving customer relations. There was a clear acknowledgement that social media can be the genesis of grass roots negative campaigns unless managed correctly. A few panel members spoke of how they have created new ways to communicate with customers and create more positive images around their products and services.

Looking ahead to 2013

I think the themes expressed by the insurance leadership at the conference need to be dealt with in the foreseeable future. Addressing technology and using data analytics will be the key to building productive, profitable and efficient organizations. That is all well and good, but the industry must also work to improve its image. For some reason the message gets lost that during castrophe’s the industry rapidly pays out billions of dollars in a relatively short period of time without any complaints. Adopting social media and engaging customers will help.

The future seems bright to me and I am looking forward to another year.

What do you think are the key industry issues from 2012 and what needs to be focused on for 2013?

3 Perspectives On The Use Of Social Media In The Claims Investigation Process

Posted on October 25, 2010 by Marc Lanzkowsky

A LinkedIn group discussion produces some interesting views on using sites like Facebook to investigate losses

Around February 2010 the following question was posted on LinkedIn on the Insurance Professionals Group discussion board:

Is anyone using social networking sites (like Facebook and LinkedIn) to investigate claims?

Over the next 9 months it has generated over 80 comments on the subject. Now I would have thought using social media, as a regular part of the claims investigation is a no brainer, however, there were some interesting posts on the subject.

Generally, claims adjusters, attorneys and investigators are all using social media websites to help learn more information about claimants. It is generally believed that these sites can provide valuable information that can help mitigate damages. In reading the various comments, it was interesting to see how different groups, attorneys, claims professionals and investigators, saw the benefits of these types of investigation.

1. Lawyers – A great help during cross examination

Attorneys felt that public postings on Facebook and other similar sites are great sources of information that can be used to cross-examine a witness at the time of trial or at a deposition. As one attorney put it:

The importance of this information cannot be overstated although there are potential pitfalls, particularly on the ethical front. The bottom line is jurors and other fact finders really respond to this evidence, in my opinion, and thus it will continue to have an impact on litigation for as long as social medial remains popular.

As another lawyer said there is no difference between mining information online and surveillance and is a necessary tool to assist defense counsel to glean whether the claimant is telling “the truth of the matter asserted.” Collectively, attorneys addressed the admissibility of these types of postings and how courts are addressing privacy concerns.

2. Claims Professionals – Cheap Surveillance

Many claim professionals commented on the value of using these sites to gain additional information and as a tool to help prevent fraud. An overriding issue, however, were corporate systems blocking access to claims professionals to these sites. Nonetheless, many claims professionals in those situations simply conducted their investigations from their home computers.

One claims professional was adamant that looking at claimant’s facebook was an invasion of privacy and would tarnish the insurance companies reputation. He felt that looking into “people’s personal affairs is a serious lack of respect, and almost criminal.” I have to say I can’t agree with this one. If the information is publicly accessible on the web then it is reasonable to assume that it will be looked at. Privacy settings can enable users of social media to determine what people can and can’t see.

The ability to glean some basic information that can help claims professionals essentially “triage” which cases need further investigation or surveillance is a great money and time saving tool. Throughout the comments there were stories of how claimants postings ran contrary to the presented claims and formed that basis to allow claim handlers to conduct further investigation which led to a mitigation or denial of a claim.

3. Investigators – Aggressive in their approach

This group is the most aggressive about using social media to learn more about claimants. So much so that some, I believe, may be crossing the line a bit. Some investigators spoke of trying to get around privacy settings by be-friending a claimant or setting up dummy profiles to gain access. Many in the discussion collectively frowned upon this type of action. Additionally, these actions were seen as a violation of many of the Terms of Service that govern the use of these sites.

If your investigator is gaining access in this manner it may be worth establishing a policy with the investigator as to how much is acceptable. There are means to seek court orders to disclose this type of information and I would recommend following that route before taking more “clandestine” approaches. The company may be exposed to privacy violations if their agents are breaking privacy settings and gaining information inappropriately.

Don’t pass up the opportunity

Claims handling is about assessing the loss, establishing a proper reserve and moving the matter to a fair and prompt resolution. I believe strongly that conducting reviews online of claimants is an essential and reasonable method to learn more about the claims being presented. As long as the information is placed in the public domain I believe it to be fair game.

Having said the above, be aware that a Google search and Facebook profile may not always be what they purport to be. I have heard of cases where someone would create false profiles on LinkedIn for the very purpose of throwing people off. It is important that if you are going to take a strong position, or claim a fraud, that the evidence be supported by more than a Google search.

Do you see any concerns in using social media to investigate claims?

Social Media And Claims Investigation: Do You Know About Foursquare?

Posted on June 28, 2010 by Christian Stegmaier

It’s amazing what you can learn online to help your claim

Undoubtedly, you’ve read plenty of articles or have been to numerous presentations regarding the use of social media to investigate claimants. At this point, the novelty of Facebook and MySpace has worn off. The same can be said about Twitter. Everyone knows at this point to take a look at those platforms when searching a claimant’s background. Enough said. However, seemingly with every new day comes a new social media application. One relatively new application that you should also take a look at during your claims investigation is Foursquare.

What is Foursquare?

Foursquare is a web and mobile application that allows users to connect with friends and update their location. To use the application, a user must register at foursquare.com and create an account. This account records the users’ activities from there on.

Foursquare started out in 2009 with limited availability in only 100 worldwide metro areas. In January 2010, Foursquare changed their location model to allow check-ins from any location worldwide. As of March 2010, the service had 500,000 users. As June 2010, Foursquare has closed in on 1.3 million users in June 2010. Thus, this is an application that is quickly picking up adopters.

Foursquare is part game, part micro blog, part status-update tool, and part vehicle for sellers of goods and services to award customer loyalty. “Checking in” via Foursquare at venues can lead to special offers and deals from a participating venue. “Checking in” can also lead to “badges” for users, which are displayed on the user’s Foursquare profile. An example of a Foursquare badge includes the “Crunked” badge, which is awarded for checking into four bars/clubs in a given night.

Users can choose to have their Twitter and/or their Facebook accounts updated when they “check in.” Alternatively, users can opt not to publish their “check ins.” Nevertheless, all activity – whether published or not – is recorded on the users’ Foursquare account.

How looking to Foursquare can help investigate your claim

Accordingly, in the course of claims investigation, an enterprising analyst can search a user’s Facebook account, Twitter account, or Foursquare account to investigate the users’ Foursquare activity. To so, the attorney would either need access to an open Facebook and Twitter profile, or alternatively, have access to the users’ login and password information for each of these accounts. Getting access to login and password information may likely only come once a claim enters litigation. At that point, defense counsel can either issue a subpoena to Foursquare or attempt to secure the data via interrogatory.

A real life claim example

The value of Foursquare can be realized in a very tangible way when investigating a user and his or her activities. For example, here is a recent Twitter feed of someone in Columbia, South Carolina on a recent Friday night using Foursquare:

I’m at Salty Nut (2000 Greene St, Columbia). https://4sq.com/5qUeGw about 7 hours ago via foursquare from Five Points, Columbia

I just unlocked the “Crunked” badge on @foursquare https://4sq.com/c93hnL about 7 hours ago via foursquare

I’m at Pavlovs (2000B Greene Street, Columbia). https://4sq.com/aLjSsL about 7 hours ago via foursquare from Five Points, Columbia

I’m at Dr. Rocco’s (801 Harden St, at Greene St, Columbia). https://4sq.com/bzIMAA about 8 hours ago via foursquare from Five Points, Columbia

I hate stupid mofos downtown who try and fight. I’m not as drunk as you, and therefore I will beat your about 8 hours ago via UberTwitter

Greene and Harden Streets are in Columbia’s “Five Points” area, which is home to many bars and nightclubs frequented by students at the nearby University of South Carolina. The locations where this user stated he was “checking in” on Foursquare are all college bars.

In this feed, we know this: the user visited numerous bars in Columbia’s Five Point areas and stated he is “drunk.” Imagine if this user later was involved in an incident where injuries occurred, which later becomes a claim to the carrier. If he were the prospective defendant involved in an automobile accident (and an insured of the carrier), we’d know we have the makings of a tough claim. If he were the prospective plaintiff alleging a claim against the carrier (e.g., he got into a fight with an insured later that night), we’d likely have the beginnings of a compelling comparative negligence defense.

Other things that can be learned by Foursquare

An additional use for Foursquare is finding out what a claimant has been up to since an incident giving rise to a claim. Imagine this claimant gave a recorded statement or testified in deposition that he or she had been devastated by his or her accident and couldn’t go out and enjoy life. What do you think the value of the claim would be when his or her Foursquare profile revealed routine “check ins” to Starbucks, the local mall, and other places that demonstrated that perhaps life wasn’t so bad for the claimant? Every little bit helps when investigating a claim such as this. The chance exists that Foursquare can help you find out more about a claimant’s post-accident lifestyle.

Bottom line: Don’t forget Foursquare when investigating a claimant’s social media activities.

You Can’t Wait Till The Last Minute To Improve You Operation – Planning Starts Now!

Posted on June 22, 2010 by Marc Lanzkowsky

Don’t let the lily pads take over the pond. The time to deal with the problem is now.

I had the pleasure of recently attending an executive summit presented by ACS A Xerox Company in Hartford Connecticut. The conference theme was centered on insurance issues and looking forward to 2015. It was a great meeting with executives from a variety of insurance companies and industries.

Looking to the future is a difficult task, especially when day-to-day issues make it hard to stop and be strategic. Unfortunately, trying to plan for the future takes time, and thinking it can be put off will only create larger problems.

Before you know it that little issue will grow into a big one – the lily pad problem

James Hatherly, one of the guest speakers at the conference, gave a great analogy about putting off minor issues. James is the author of Daring to Be Different, A Manager’s Ascent To Leadership and he discussed the importance of having to think about problems sooner rather than later with the following story:

One morning a farmer observed that a lily pad had sprung up on his pond. The following day there were two lily pads, and on the third day there were four. Since they did not seem to be doing any harm he took no action. However, the number of lily pads continued to double every day until the pond was completely covered on the thirtieth day.

James questioned the audience as to how long did it take for the pond to be covered 50%? Or even 25%? The answer was that the pond was 50% covered on the 29th day and 25% covered on the 28th day.

His point? Managers and executives can’t wait until the 29th day to solve problems.

With time slipping away, what should claims departments be thinking about in the next 5 years? That question, of course, will be answered differently from company to company. Regardless, there have been certain trends that exist today, being addressed by other industries, which should be looked at in today’s modern claims department.

Two suggestions for beating the lily pads to the pond

There is nothing too forward thinking about the concepts I address here. There are plenty of cases in the insurance industry where solutions have been adopted successfully. Nonetheless, if you have not addressed either of these because you felt it was not appropriate for your organization it may be time to reconsider and see how they may apply in the future.

Social Media – I know it’s the buzzword in business wherever you go. You are probably aware of the powers of social media or you would likely not be reading this blog. Twitter, LinkedIn, Facebook and a variety of other services are being incorporated into businesses more and more each day. How will the insurance industry, and more specifically claims, adopt these outlets? Will you use Twitter to tweet claims alerts to customers? Are you creating a Facebook fan page to learn more about, and solve customer problems? How about an internal social network to share claims information amongst departments and partner organizations. How can these applications make your claims department more efficient?

Mobile Technology – Everyone has a phone that can handle such an array of tasks that it’s amazing we ever functioned without them. Better bandwidth, and more coverage, allows access to an amazing amount of information from the palm of your hand. What is your company doing to adopt this technology? Are your claims adjusters able to assess claims on the road and instantly pass the information into systems for analysis? Are customers able to file a claim from their phone attaching photographs and other information like GPS locations? Will new devices, such as an iPad be used in the future claims organization? How will your organization respond to these devices? Lead or follow?

Like most industries, adopting and changing with the times can be a difficult proposition. It takes time to think of issues, come up with solutions and implement the changes. Insurance companies have added legal, compliance and regulatory concerns, to say nothing of complex, and sometimes outdated, information technology systems. Regardless, it’s not too late to address issues to create a social media or mobile strategy.

Think back five years and ask yourself how many lily pads would be on the pond had you stopped to deal with the first one on day one. The trends we see in technology, and in how people work around the world, are changing rapidly. To stay ahead of the curve, and take advantage of solutions that can help your organization, start thinking out-of-the-box now. Take a lesson from an article I wrote a few posts ago about changing hats outside your industry and see how others are adopting their operations to the changing times.

Now is the time to consider change. Before the pond gets too filled with lily pads attack the problem and look for solutions. Five years from now – you won’t be wondering what could have been.