My friend and fellow regular columnist for CLAIMS magazine, Ken Brownlee, likes to say that when he was a risk manager, his job specialty was pickles and jams. Very clever! I wish I had thought of that.
If risk managers deal in pickles and jams, that probably goes double for claim professionals. The daily challenges of claim professionals involved working with people who have gotten themselves into pickles and into jams, trying to extricate them from both.
I have often likened claims adjusters to first responders to an accident scene or to the HAZMAT crew that shows up in their special suits to clean up the aftermath of a chemical spill. They may show up to clean up the aftermath of poor risk selection decisions in some cases. They may show up to clean up the aftereffects of poor lost control decisions made by a count. In any event, it often falls to the claims adjuster to be a one-man or woman cleanup crew.
It’s summertime. Regardless of whether or not adjusters attend a county fair, there is a good chance that they are experts in pickles and jams!
Saturday, July 18, 2009
7 Ways to Incentivize Adjuster Continuing Education ...
Recently a friend at the Insurance Institute of America contacted me to ask for tips on how claim managers could incentivize claim adjusting staffs to pursue continuing education. The latter would include – but not be limited to – taking courses in the AIC (Associate in Claims) program, leading to the designation.
I don’t claim to have found THE key or solution, but I humbly offer seven tips on motivating adjusters to pursue continuing education:
#1 Make CE one component of annual performance appraisals. If you want it to get done, you have to measure it.
#2 Make CE pursuits one periodic (e.g. “coaching topic/opportunity” with reports). Repetition, repetition, rep .. Well, you get the idea.
#3 Publicly recognize and praise those who pursue AND COMPLETE continuing education.
#4. Enact/support corporate monetary rewards/incentives for CE program completion. $$$ is still a nice carrot, as is footing the bill to attend an annual conferment/convention event for employee and spouse.
#5. Provide a reasonable amount of time and reimbursement support for CE pursuit within the office.
#6. Offer CE classes or briefing sessions in-house, on Company time. Hey boss – roll up your sleeves and dust off those textbooks!
#7. Leadership by example – be involved in CE as a “boss” and make sure your reports know you value the activity!
I don’t claim to have found THE key or solution, but I humbly offer seven tips on motivating adjusters to pursue continuing education:
#1 Make CE one component of annual performance appraisals. If you want it to get done, you have to measure it.
#2 Make CE pursuits one periodic (e.g. “coaching topic/opportunity” with reports). Repetition, repetition, rep .. Well, you get the idea.
#3 Publicly recognize and praise those who pursue AND COMPLETE continuing education.
#4. Enact/support corporate monetary rewards/incentives for CE program completion. $$$ is still a nice carrot, as is footing the bill to attend an annual conferment/convention event for employee and spouse.
#5. Provide a reasonable amount of time and reimbursement support for CE pursuit within the office.
#6. Offer CE classes or briefing sessions in-house, on Company time. Hey boss – roll up your sleeves and dust off those textbooks!
#7. Leadership by example – be involved in CE as a “boss” and make sure your reports know you value the activity!
Sunday, July 12, 2009
One of the Dumbest Things I’ve Ever Heard …
D.C.’s transit system is bracing for liability lawsuits arising from a spectacular head-on crash that occurred in June 2009. The crash killed nine and injured 80. (For recent story, see http://www.washingtonpost.com/wp-dyn/content/article/2009/07/11/AR2009071102660.html)
None of this surprises me. In fact, being a claims guy, one of the first things I think about when hearing about such an event is the wave of litigation.
What caught my eye was a quote from the transit system’s former CFO and Maryland Board member Peter Benjamin. Deriding the prospect that the transit system would have to pay claims from its own funds, confident that the transit system has adequate coverage to address the flood of claims, Benjamin is quoted as saying, “The probability of having to pay enormous sums of money is relatively low. Our insurance rates will go up.”
Huh???
Sorry, but the judges and juries doling out awards could care less if your insurance rates go up. Your insurance rates going up is not check on jury awards, settlements or recoveries. It is an after-effect of those events.
It’s like saying,
“If I drive drunk and kill someone, I can’t get a big award against me because GEICO would raise my rates.”
“If my Rottweiler mauls the postman, I’m in the clear because Nationwide would jack up my premium.”
I can only hope that Benjamin was misquoted or that this comment was taken out of context. Otherwise, the Metro transit system may find itself digging into its own coffers if liabilities exceed their insurance layer. One thing is for certain – the prospect of rising insurance costs will not act as any “brake” on settlements or jury awards stemming from the June 2009 crash.
None of this surprises me. In fact, being a claims guy, one of the first things I think about when hearing about such an event is the wave of litigation.
What caught my eye was a quote from the transit system’s former CFO and Maryland Board member Peter Benjamin. Deriding the prospect that the transit system would have to pay claims from its own funds, confident that the transit system has adequate coverage to address the flood of claims, Benjamin is quoted as saying, “The probability of having to pay enormous sums of money is relatively low. Our insurance rates will go up.”
Huh???
Sorry, but the judges and juries doling out awards could care less if your insurance rates go up. Your insurance rates going up is not check on jury awards, settlements or recoveries. It is an after-effect of those events.
It’s like saying,
“If I drive drunk and kill someone, I can’t get a big award against me because GEICO would raise my rates.”
“If my Rottweiler mauls the postman, I’m in the clear because Nationwide would jack up my premium.”
I can only hope that Benjamin was misquoted or that this comment was taken out of context. Otherwise, the Metro transit system may find itself digging into its own coffers if liabilities exceed their insurance layer. One thing is for certain – the prospect of rising insurance costs will not act as any “brake” on settlements or jury awards stemming from the June 2009 crash.
Monday, July 6, 2009
Revisiting CEO Review of High-Dollar Claims
In April, the Claims Coach blogged about Evan Greenberg of ACE adopting the practice of personally reviewing all claims of $1 million or over, posing for discussion whether this was a good idea or a waste of a CEO’s limited time. One anonymous follower of the blog offered the following perspective:
“I could see the claims manager submitting a report to the CEO of a company in regards to claims reserved at or over $1,000,000. but the CEO reviewing these high $ claims? If he has limited or no claims experience himself, the poor adjuster is put in the position of give the CEO a `claims 101’ lesson (not an enviable position) and trying to justify everything he did- his investigation, damage control, evaluation, reserve recommendations. Please, let’s leave this up to the claims professionals!”
“Reviewing” covers a lot of ground. Maybe it’s one thing of a CEO wants to review each million-dollar claim. It’s another thing if the adjuster cannot consummate a settlement because the CEO hasn’t gotten around to reviewing the file.
Can you imagine being the claims rep at a judge-ordered settlement conference trying to get through to the CEO by phone for additional settlement authority while the Big Cheese is at a Board Meeting or on a flight to the coast?
“I could see the claims manager submitting a report to the CEO of a company in regards to claims reserved at or over $1,000,000. but the CEO reviewing these high $ claims? If he has limited or no claims experience himself, the poor adjuster is put in the position of give the CEO a `claims 101’ lesson (not an enviable position) and trying to justify everything he did- his investigation, damage control, evaluation, reserve recommendations. Please, let’s leave this up to the claims professionals!”
“Reviewing” covers a lot of ground. Maybe it’s one thing of a CEO wants to review each million-dollar claim. It’s another thing if the adjuster cannot consummate a settlement because the CEO hasn’t gotten around to reviewing the file.
Can you imagine being the claims rep at a judge-ordered settlement conference trying to get through to the CEO by phone for additional settlement authority while the Big Cheese is at a Board Meeting or on a flight to the coast?
Thursday, July 2, 2009
Ape Liability (Continued)
http://www.claimsjournal.com/news/east/2009/07/02/101919.htm
Now the victim of the enraged chimp “Travis” says she feared the ape due to its size, temperament and its tendency to damage its own cage. Charla Nash was attacked by the animal in February and was disfigured to the point where doctors at The Cleveland Clinic performed a face transplant.
Nash has filed a $50 million liability lawsuit against the chimp’s owner, Sandra Herold of Stamford, CT.
The Claims Coach speculates that Herold’s homeowners insurance coverage is triggered and that there is no way the homeowner’s liability policy limits remotely approach $50 million. The Claims Coach is not a lawyer, but is aware that often strict liability is applied to owners of wild animals, though legal counsel for Herold maintains there was no way for anyone to predict that the ape would inflict injury.
Notwithstanding those comments, it is tough to imagine that the homeowners liability carrier would not – at some point – tender its policy limits to try to get this case settled. The Claims Coach cannot imagine that the defendant would chance such a case to a dice-roll in front of a jury.
Given the horrific nature of the injury, the national publicity the case has garnered , the strict liability for injuries from domestically-kept wild animals – even the most stalwart and hard-nosed adjuster might think twice about trial and make a push to settle such a claim.
Now the victim of the enraged chimp “Travis” says she feared the ape due to its size, temperament and its tendency to damage its own cage. Charla Nash was attacked by the animal in February and was disfigured to the point where doctors at The Cleveland Clinic performed a face transplant.
Nash has filed a $50 million liability lawsuit against the chimp’s owner, Sandra Herold of Stamford, CT.
The Claims Coach speculates that Herold’s homeowners insurance coverage is triggered and that there is no way the homeowner’s liability policy limits remotely approach $50 million. The Claims Coach is not a lawyer, but is aware that often strict liability is applied to owners of wild animals, though legal counsel for Herold maintains there was no way for anyone to predict that the ape would inflict injury.
Notwithstanding those comments, it is tough to imagine that the homeowners liability carrier would not – at some point – tender its policy limits to try to get this case settled. The Claims Coach cannot imagine that the defendant would chance such a case to a dice-roll in front of a jury.
Given the horrific nature of the injury, the national publicity the case has garnered , the strict liability for injuries from domestically-kept wild animals – even the most stalwart and hard-nosed adjuster might think twice about trial and make a push to settle such a claim.
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