November 16, 2018

Archives for October 2013

A Pictorial Lesson in Halloween Risk Management

Flying Witch

Adjusters — DON’T Start Your Work Day by Checking Email!

Here is a radical tip for many adjusters and other claim professional’s:  do NOT begin your day (or work day) by opening up your email manager and checking your email. 

Check email

Why?  This is a good way to get you distracted and off-track from what you want to accomplish early in the day.  Instead, set aside specific times during the work day to get into and then get out of email.  Maybe every other hour, on the hour.  Perhaps once at mid-morning, once at mid-day, once at mid-afternoon and finally at the end of the day. 

This latter point is crucial.  Once you check email and knock out some replies, do not leave your email manager open.  This applies regardless of whether you use Outlook, Lotus Notes, Gmail, Thunderbird or some other system.

I recently read a quote by marketing specialist Chris Brogan that really resonated with me:  “Email is the perfect system to deliver other people’s priorities to your attention.”  This, he explains, is why he resists the powerful temptation to start the day by checking email. 

Forgoing this start of day ritual puts YOUR priorities and intentions at the forefront.  It makes it less likely that other people’s priorities will derail your best intentions.  In our always-plugged-in world, the seductive siren call of checking email “just one more time” is powerful. 

Resist it.  Like any new habit, it will take time to retrain yourself. 

(I need to sign off for now.  In ten minutes, it will be time for me to check my email….)

“What are the biggest productivity barriers to adjusters in today’s claim departments?”

Recently, I posed this open-ended question on the claims management forum of LinkedIn.  (Incidentally, this group now has over 13,000 members and is a terrific sounding board for discussions regarding management of claims. If you are not a member, please join!)

Productivity

Over a dozen claim professionals weighed in on the issue. Let me summarize and distill the feedback, in no particular order:

            *  Busy-work.  misguided managerial focus on requiring adjusters to waste time on activities that add little or no value

            *  Lack of self-discipline

            * Intrusive “repeater” calls.  phone calls from the same policyholder to three times a day, which forces you to stop would you are doing to assist them

            *  E-mail interruptions and excessive meetings

            *  Excessive workloads. One person lamented the expectations of high closure ratios with more files being dumped on desks, almost to the point of impossibility

            *  Being reactive instead of proactive and strategic, always playing catch-up and losing the ability to be strategic with time and effort

            * Personal disorganization in not having a system to keep all claims flowing patiently at different stages of the process

            *  Dysfunctional metrics that foster competition within claim departments, where the focus becomes less about servicing insured or claimant needs but rather attaining high scores on quarterly reports

            * Time mis-management

The point:  a large part of claims management is or should be supervisors and managers periodically assessing barriers to productivity within the claims office.

In some cases, the analysis may lead to Pogo’s saying that, “We have met the enemy, and he is us.”

Management can unwittingly create procedures and bottlenecks that thwart adjuster productivity. Of course, there has to be a balance between necessary procedures and efficiency.

Nevertheless, an ongoing process for effective claims supervision and management is to determine what barriers exist within the claim department that create “drag” on the adjusting staff and to consider ways to remove those friction points. For starters, there may be merit in periodically polling and formally taking the temperature of the claims staff as to what procedures and features of the job or work environment get in the way of been doing an efficient job at investigating, negotiating and evaluating claims.

For adjusters who feel overwhelmed by the volume of e-mail, there may be a need for periodic tutorials and coaching sessions on managing this electronic communication.

If adjusters feel hounded by the same policyholders or claimants calling again and again, management should look at those situations, develop case studies and strategies for adjusters to see what can be done to preempt such calls.

If the claim department culture is one of numerous meetings which adjusters find unproductive, consider shorter meetings, more tightly focused meetings with prepared agendas, or less frequent meetings.

These are all tactical approaches in response to adjuster concerns that barriers for their ability to efficiently and effectively handle claims.

Surprisingly, this informal poll did not cite social media and Internet web-surfing as productivity barriers. Many management teams seem to harbor the suspicion that adjusters with on-the-job Internet access will mis-use this freedom to shop at Amazon.com or to post Facebook statuses.

The take-away here, however, is for management of any claims office to view as part of their job the role of identifying and, if possible, eliminating barriers to adjuster productivity.

It goes beyond consciousness-raising, however, beyond the awareness comes the follow through and action item to identify each one of those barriers and see if they can be eliminated or worked around. In some cases, this may not be possible, but at least management has given it thoughtful consideration.

(Fortunately, none of the individuals nominating sources of productivity barriers cited LinkedIn polls or discussion forums!)

While this blog post comes to an end, the dialogue continues. What do YOU see as the primary obstacles or barriers to claim department productivity? Feel free to post here or reply directly to kevin@kevinquinley.com

5 Tips for Negotiating First-Party Property Claims

Against the backdrop of stalled budget talks and government shut-down, we can see an example of unsuccessful negotiations in Washington D.C.  Adjusters are thrust in the role of negotiator frequently, as part of their jobs. 

Negotiate

            Claim negotiating nuances arise between third- and first-party claims, subtleties which the claims rep should observe.  The negotiating context is different with each.  Let us examine some the special contextual factors which distinguish first-party claims.  Appreciating these factors will help claim representatives steer clear of potential land-mines in negotiating such losses. 

            #1 Be flexible.  One initial consideration:  with first-party claims, you may have to be a little more flexible.  Reason: you have a contract with the individual with whom you are negotiating.  He or she is the person helping to pay your salary via premium payments.

            #2.  Give the insured the benefit of the doubt when possible.  For gray area cases, you may have to bend over backwards, giving the insured the proverbial — and literal — benefit of the doubt.  You don’t think that the insured’s expenses at the Ritz Carlton constitute reasonable “additional living expenses”?  You question whether the insured needs an entire kitchen remodeling job following the grease fire?  If it is a close call, then you may need to be more yielding and swallow your doubts.  Of course, if it’s a case of fraud or blatant “padding,” then by all means dig in your heels.

            Courts are more likely to hold you to a rigorous standard of punctilio in dealing with policyholders than with third-party claimants.  While all policyholders or claimants are entitled to good faith treatment, this is not a black-and-white issue.  There are subtleties and gradations of good faith (and bad faith!).

            #3.  Act in good faith and beware of the bad faith boogeyman on first-party claims.  In other words, you do not have the “general damages” component in first-party claims which you typically have in third-party losses.  Insureds do not claim pain and suffering, unless they file a bad-faith lawsuit against you, in which case they can seek extra-contractual damages.         This is an important area, for bad faith is much more prevalent in first-party than in third-party claims.  Courts often say that the adjuster or insurer has a higher duty of care to the premium-paying policyholder than to a third-party claimant.  In some states, third-party claimants cannot bring bad faith actions.  Thus, on first-party claims you must take any bad faith threat very seriously and make sure that you dot all “i’s” and cross all T’s. 

            #4.  Be prepared to negotiate.  The adjuster’s negotiation of first-party and property claims is strengthened by knowledge of the FACTS, a good investigation and a firm command of the insurance coverage and policy provisions.  Preparation cures most ills when it comes to claim negotiations.

            #5.  Be alert to high-profile situations.  Be alert to cases of unusual sensitivity, where adjusting property claims will involve special considerations.  Such circumstances might include:

            *  claims made by celebrities or semi-famous persons

            *  claims made by VIP accounts, long-standing accounts or big premium payers

            *  claims made by individuals who are in media or politics, and who could make your life miserable if they feel they are being mistreated

            *  claims involving employees of the insurer (due to the touchiness of these situations, some insurers decline to write coverage on the property of their own employees),

            Use these tips to navigate first-party property losses, whether you’re handling a house fire or water damage claim. 

            Q:  What tips or techniques have YOU found effective in negotiating first-party property losses?  Post here or share your thoughts offline at kevin@kevinquinley.com   

 

Roll of the Dice Makes White and Williams’ “Coverage College” a Winner

You might think that attending an insurance law conference would be [YAWN…] the most boring experience in the world. But what if you could win $25,000 at the event?

Coverage College

This was the carrot that the Philadelphia-based law firm of White and Williams dangled at its recent annual “Coverage College” at the Philadelphia Convention Center. At the end of the day, registrants could sign up to toss dice and — if they had six straight rolls with the words “White and Williams” facing up, they would win $25,000.

Over 650 insurance professionals from 130 different companies attended the October 3rd event, the seventh offered by White and Williams. This was my second visit and I must say that this is a terrific continuing education forum. White and Williams run it with Swiss-watch efficiency and offer an interesting and eclectic menu of breakout sessions as well as general/plenary sessions.

I attended an excellent breakout session on when the company is on the hot seat.” This featured a variety of clips from actual video depositions, demonstrating what not to do. (Hilarious, UNLESS you are the lucky deponent whose performance is being postmortemed.)

For the second straight year, however, the capstone and final presentation was from an invited policyholder lawyer, typically the loyal adversary of the likes of White and Williams and the type of law firm that sues insurers.  The presenter was William Passannante of the ubiquitous Anderson Kill firm, a heavy-hitter in pro-policyholder coverage litigation. Passannante presented on specific mistakes that he sees insurance companies make in coverage litigation that get them in trouble.

Here is a sampling of mistakes made by insurers, leading to bad faith claims:

            1.Ignoring exposure to attorney fees in many jurisdictions. I.e. if you contest coverage and LOSE, you not only have to pay the claim and coverage counsel’s fees, you also get to pay the policyholder’s legal fees. 

            2.Being unaware of what the adjuster said about the coverage issue before coverage counsel was hired.

            3. Trying to “wall off” loss adjusting activity by moving all claims handling to attorneys.  Trying to keep the claim file privileged by immediately assigning coverage counsel can be an uphill battle, according to Passannante. 

            4.  Failure to notify the policyholder of a reduction in coverage.

            5.  Inexplicable delay in claim handling.

            6.  Forgetting that your adversary in a claim situation is your customer.

            7.  Failure to notify plaintiffs in bodily injury cases, pursuant to state laws and some jurisdictions.  (If you reserves rights or disclaimed coverage, did you inform the third-party claimant?)

            8.  Reviewing the law when convenient rather than reviewing the law in other states that could arguably be the jurisdiction for the case.  (Assuming that one state’s law will control when a case can be made that a different state law applies.)

            9.  Asserting prejudice due to late notice without any basis.  (Not all delays are prejudicial and courts are often very exacting in making the insurer prove prejudice.)

            10.  Denying a claim that the company is advertising as a covered loss at the same time.  Passannante had a case where this really happened — where the insurer’s print ad touted as covered the very claim for which it was contesting coverage.  “Don’t the marketing and claims people ever talk?” Passannante asked.

            11.  Reserving coverage rights when not needed, thereby creating Cumis-type situations and relinquishing control of defense counsel.  What are the odds of prevailing on coverage versus the real risk of relinquishing some control over case defense by creating the insured’s right to separate/independent counsel? 

            12.  Failure to keep the insured informed of developments in defense of the case.

As a parting gift of Conference “swag,” the host firm gave each attendee a “Magic Eight-Ball” to use in answering the eternal question that adjusters ponder, “Is it covered?”  Shake the ball vigorously, and you get answers ranging from “Don’t Bet on It” to “Indications Say `Yes.'” (To make it truly realistic, answer options for future Eight-Balls might include other helpful advice adjusters receive from insurer coverage counsel such as, “It Depends,” or, “Need More Research.”)

At seven years old, the W&W “Claims College” has become a distinct brand.  (In fact, rumor has it that three SEC schools are trying to add easy “W’s” to their 2014 Fall football season by scheduling home games against the “Claims College.”)

If you get a chance to attend next year’s “Coverage College,” GO!

Who knows — you might win $25,000.  And if some lucky insurance person does roll the dice successfully for the prize, don’t feel sorry for the White and Williams firm for having to plunk over the money.

They bought insurance to cover that contingency. 

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