October 16, 2021

Practice Tip #8: Prepare Upper Management for Dynamic Claim Scenarios

Last week, we discussed the dynamic environment in which product liability claims unfold and evolve. That has certain operational implications for adjusters who handle these claims. This is particularly true with regard to dealings with upper management.

Bad News

Let’s face it, we all want to be in the position of delivering good news to the boss. No one favors delivering bad news to higher-ups. Like it or not, fair or unfair, there is a tendency in the corporate world to shoot the messenger and to associate failure with the person who delivers the unwanted message.

Resist this temptation and tendency.

Don’t sugarcoat things for upper management by giving rosy assessments. Let them know that many factors which are uncontrollable and unforeseeable could change reserves, case value and resolution strategy. Err on the side of over-communicating with management.

Create a paper trail so no one can ever say, “You kept us in the dark!”

When it comes to case outcomes here, success has a thousand fathers but failure is an orphan. 

That orphan will most likely be YOU, not the underwriter who wrote the account.  The underwriter will likely have already collected his or her bonus for meeting those ambitious premium growth goals. And boy, did they add that premium! Unfortunately, it came at the cost of writing some marginal accounts which are now spewing claims like a fire hydrant. Well — you can’t have everything, can you?  But that’s your problem, right?

So, consider all internal constituencies on the org chart that should be apprised of major case developments or emerging loss trends.  Do more than consider, communicate. Do it in various means and document. If this sounds like a CYA, cover-your-ass strategy, then so be it.

Wouldn’t you rather have the problem of delivering good news to the boss after setting grim expectations than delivering bad news after painting a rosy picture?

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