Saturday, February 16, 2008

Coping with the “R” Word … and it’s not Risk

It’s “R” as in recession.

Many economic pundits predict that the American economy will drift into recession in 2008. Others believe that the economy is already in one. Put aside temporarily whether they are right or wrong. (One pundit once said that, if you took all the economists in the world and laid them end-to-end, they would still point in every direction…).

Assuming the Cassandra’s are accurate, we can speculate on six areas of impact for claim professionals:

  • Tough economic times might produce an uptick in insurance claims, as folks with marginal claims have a heightened financial incentive to collect from insurance
  • Increased insurance fraud, for the same preceding reasons. (Perhaps a favorable time to be positioned in an SIU)
  • Less economic growth may equal lower sales which, in turn, lower insurance premiums. This might increase pressure on insurers to squeeze expense ratios by trimming claim staff and foregoing referrals to outside TPA’s
  • Companies may belt-tighten and view a full-time risk management job as a “frill,” eliminate the job and outsource the role to their insurance broker
  • Possible spike in workers compensation and employment practices claims if companies enact sizable workforce layoffs
  • Claim managers may be under greater pressure to “rank and yank,” shedding departments and staffs of performers viewed as marginal or lacking in growth potential

What other “claim fallout” do you see from an economic recession?

Another follow-on question is, how can savvy claim professionals “recession-proof” their own jobs and careers? We will tackle that issue in a forthcoming blog post.

Friday, February 1, 2008

Steamed at Claimant’s Counsel? Write Right!

"That @#$# claimant attorney! And that ^&*% adjuster at XYZ Mutual!!!"

When writing to claimant/plaintiff counsel or to another insurer toward which your interests are adverse, strive to keep the tone both courteous and professional. Your relationship with the opposing attorney or carrier may impact the efficiency – and transaction cost (read: attorney fees) associated with the claim.

Cultivate a positive relationship that lets the claim develop with a focus on your insured’s or client’s interest, not the adjuster’s personality. While “chumminess” is unnecessary (and night be seen as unprofessional), cooperation and politeness will further the prompt resolution of the claim on its ,merits without the cost and headaches that policyholders can endure when adjusters needlessly spar or let their egos get the better of them.

The content of the adjuster’s communication to the opposing lawyer or insurer hinges on the purpose of the communication. A letter conveying a settlement offer has one tone. A letter responding to a deadline might have another. A message transmitting information should be concise and polite.

Never write a letter or email to the claimant/plaintiff attorney or to another insurer that you wouldn’t want a jury or the policyholder to see!