I just read an article in Business Week (4/20/09, “One Greenberg’s Pain is Another’s Gain”) about Evan Greenberg, one of the sons of industry titan and former AIG potentate “Hank” Greenberg. Evan is CEO of ACE Insurance Company. What caught my eye was a sentence in the article that states that ACE’s Evan Greenberg still reviews every claim of more than $1 million.
This stopped me in my tracks. I’m not quite sure what to make of this.
On the one hand, it paints a picture of the fully engaged CEO. I’m not sure what kind of claim valuation background, if any, Evan Greenberg possesses. I would imagine that it is extremely rare for an insurance company CEO to exhibit this level of engagement with high ticket claims.
On the other hand, part of me thinks that a CEO is likely under-qualified to make reasoned assessments of claim liability and evaluation. Is this truly the best use of a CEO’s limited time and attention? Can you imagine being the claims adjuster at a mediation 1000 miles away, needing settlement authority above $1 million in having to call back to the Home Office and try to get the CEO of the company on the line?
Good luck!
So there you have the ACE template: the CEO reviews all claims above $1 million.
Is this a best practice or is it a distracting and pointless drain on the time of a chief executive officer who should be more engaged in managing the forest than the individual trees?
Saturday, April 18, 2009
Wednesday, April 15, 2009
IKEA Gets no Discount on This Jury Award
“You know what the word `IKEA’ really means when translated from Swedish?” asked comedian Jay Leno recently.
The answer: “Cheap particle board.”
Though the audience laughed, it is likely that few IKEA personnel are laughing over a recent jury hit that the retailer just took in the Washington D.C. area.
A Fairfax County (VA) woman was just awarded $3.2 million in damages for injuries she suffered in 2006 when a 350-lb. stack of countertops fell on her in one of IKEA’s Woodbridge, VA stores. The plaintiff, Xiaolie Zeng, suffered four fractures of her pelvis and alleged permanent injuries.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/14/AR2009041402882.html
Fairfax County, VA -- which happens to be my home – is not known for having excessively liberal juries. From a defendant’s point of view, it is considered a fairly favorable jurisdiction. If you have a choice locally to be a defendant in Washington D.C. or Fairfax County, you definitely want your case in Fairfax County. This is no Robin Hood, “rob the rich to pay the poor” area.
It sounds as though liability here was pretty clear. The customer had been looking for a table, but did not find one that she liked Near the Exit, she stopped at the “As Is” section of leftover or bargain items but did not touch any of them. A stack of four particle-board counter tops and inside door collapsed on Ms. Zeng.
Given the clear liability, it is hard to see why IKEA did not settle the case and let it go to a jury. The article says the special damages were about $150,000. We do not know the plaintiff’s pretrial demand. Perhaps it was so high that IKEA felt that, even with a finding of liability, it stood a good chance of doing better than paying the demand.
That demand may be looking better now.
The answer: “Cheap particle board.”
Though the audience laughed, it is likely that few IKEA personnel are laughing over a recent jury hit that the retailer just took in the Washington D.C. area.
A Fairfax County (VA) woman was just awarded $3.2 million in damages for injuries she suffered in 2006 when a 350-lb. stack of countertops fell on her in one of IKEA’s Woodbridge, VA stores. The plaintiff, Xiaolie Zeng, suffered four fractures of her pelvis and alleged permanent injuries.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/14/AR2009041402882.html
Fairfax County, VA -- which happens to be my home – is not known for having excessively liberal juries. From a defendant’s point of view, it is considered a fairly favorable jurisdiction. If you have a choice locally to be a defendant in Washington D.C. or Fairfax County, you definitely want your case in Fairfax County. This is no Robin Hood, “rob the rich to pay the poor” area.
It sounds as though liability here was pretty clear. The customer had been looking for a table, but did not find one that she liked Near the Exit, she stopped at the “As Is” section of leftover or bargain items but did not touch any of them. A stack of four particle-board counter tops and inside door collapsed on Ms. Zeng.
Given the clear liability, it is hard to see why IKEA did not settle the case and let it go to a jury. The article says the special damages were about $150,000. We do not know the plaintiff’s pretrial demand. Perhaps it was so high that IKEA felt that, even with a finding of liability, it stood a good chance of doing better than paying the demand.
That demand may be looking better now.
Monday, April 13, 2009
I Guess She Couldn’t Sue God
“Michigan Church Faces Second Trial Over Fall at Altar” reads the headline from the Associated Press. (For the full story, http://www.claimsjournal.com/news/midwest/2009/04/13/99550.htm). Apparently Judith Dadd of Lansing, MI is suing her place of worship, Mount Hope Church. The suit flows from a July 2002 accident when she was overcome by the holy spirit, fell backwards and hit her head on the floor.
Her theory of liability: the church should have had an usher positioned there to catch her fall. That leads to an interesting idea, where churches might engage one “spotter” for each celebrant who is overcome with the holy spirit. The pews and aisles might be packed that way.
As a footnote, Ms. Dadd has added a defamation claim, saying her pastor has been wrongful stating that her injury was faked. Imagine that!
If you are the adjuster assigned to this claim, maybe one red flag would be the list of itemized special damages including a hefty bill from a faith healer …
Her theory of liability: the church should have had an usher positioned there to catch her fall. That leads to an interesting idea, where churches might engage one “spotter” for each celebrant who is overcome with the holy spirit. The pews and aisles might be packed that way.
As a footnote, Ms. Dadd has added a defamation claim, saying her pastor has been wrongful stating that her injury was faked. Imagine that!
If you are the adjuster assigned to this claim, maybe one red flag would be the list of itemized special damages including a hefty bill from a faith healer …
Sunday, April 5, 2009
“Michael Clayton” and the Tao of Claim Defense
OK, so I'll confess don’t get to the movie theaters much.
($11 a ticket PLUS $8 popcorn? Are you kidding?!) But the wife and I watch plenty of movies on DVD, courtesy of Netflix. I know that time-wise I’m behind the curve here but last night I finally got around to watching and enjoying “Michael Clayton.” I had not realized that the movie centered on a product liability case, a class action involving a weed-killer and a mythical Nebraska-based company called U-North.
Some highlights of the plotline which may interest those in the claims realm:
• Bad documents can sink your defense (though how did these stay suppressed and secret so long?)
• Lead defense counsel strips down to his underwear during one plaintiff’s deposition (lending a whole new meaning to the phrase, “legal briefs”). Also, why did the lead defense counsel in this role have to be played by Tom Wilkinson instead of, say, Charleze Theron, just to pick a name at random.
• Defense firm of Kenner, Bach & Ledeen dances a jig when it hits 30,000 billable hours on the defense of the carcinogenic weed-killer. Yippee!
• Product defendant plays hardball on a whole new level.
OK, it’s Hollywood. I get it.
Nevertheless, if you work in the vineyard of liability claims, you may get a hoot out of “Michael Clayton.”
($11 a ticket PLUS $8 popcorn? Are you kidding?!) But the wife and I watch plenty of movies on DVD, courtesy of Netflix. I know that time-wise I’m behind the curve here but last night I finally got around to watching and enjoying “Michael Clayton.” I had not realized that the movie centered on a product liability case, a class action involving a weed-killer and a mythical Nebraska-based company called U-North.
Some highlights of the plotline which may interest those in the claims realm:
• Bad documents can sink your defense (though how did these stay suppressed and secret so long?)
• Lead defense counsel strips down to his underwear during one plaintiff’s deposition (lending a whole new meaning to the phrase, “legal briefs”). Also, why did the lead defense counsel in this role have to be played by Tom Wilkinson instead of, say, Charleze Theron, just to pick a name at random.
• Defense firm of Kenner, Bach & Ledeen dances a jig when it hits 30,000 billable hours on the defense of the carcinogenic weed-killer. Yippee!
• Product defendant plays hardball on a whole new level.
OK, it’s Hollywood. I get it.
Nevertheless, if you work in the vineyard of liability claims, you may get a hoot out of “Michael Clayton.”
Monday, March 30, 2009
Claim-Handling woes are prominent in Consumer Insurance Gripes
According to a recent study by the National Association of Insurance Commissioners, claim disputes and problems figure prominently among the reasons for consumer complaints. The top five reasons behind insurance complaints in 2008:
Claim delays 19.1%
Claim denials 18.4%
Unsatisfactory settlement/offer 14.2%
Premium & rating 4.7%
Cancellation 4%
What types of insurance generate the most claims?
Accident & Health 36.9%
Auto 36.7%
Homeowners 11.8%
Life & Annuity 9.5%
Commercial Multi-Peril 1.9%
Claim delays 19.1%
Claim denials 18.4%
Unsatisfactory settlement/offer 14.2%
Premium & rating 4.7%
Cancellation 4%
What types of insurance generate the most claims?
Accident & Health 36.9%
Auto 36.7%
Homeowners 11.8%
Life & Annuity 9.5%
Commercial Multi-Peril 1.9%
Monday, March 2, 2009
Why Adjusters Matter!
Peter Crosa is the President of his own independent adjusting company and private investigation firm based in the Tampa, Florida area. Among other things, he writes a periodic blog titled, “An Adjuster is What an Adjuster Does.” Lots of good stuff in there! There are very few people in the industry that I read and then kick myself, saying, “Boy, I wish I had thought of that!”
Peter falls into that skill category.
Recently, Peter’s missive discussed why claims adjusters fulfill a positive societal role. It is one of the best -- perhaps THE best – “Big Picture” perspective I have ever read on why claims people have reason to be proud and to hold their heads up high with regard to their chosen profession.
Too many times claims people have a permanent inferiority complex. I confess that I have often referred to claims as the Rodney Dangerfield’s of the insurance industry. I say that more as a description rather than legitimizing that sad state of affairs. Nobody entered the claims business for its prestige, high pay or cache during cocktail party introductions.
If as a claims adjuster you ever wonder whether you are making a difference by doing your job, please consider and ponder the following excellent articulation as to why adjusters matter. The following segment is reprinted with permission from Peter Crosa:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
What have you given back to society? Is your community better off because you’re in it? If you’re an adjuster, the answer is yes. Here’s why.
You are given the responsibility to investigate and adjudicate contractual obligations and torts between citizens. Every claim you resolve before a law suit is filed, saves the cost of a trial. The cost of a trial includes the cost of the courtroom facilities and utilities, salaries of the courtroom staff, attorneys, jurors, witnesses and experts. It saves the time, sometimes several days, of the lives of countless people that would have participated in the trial.
So, just in case you ever feel embittered, embattled and unappreciated; just in case you get the feeling your supervisor is ready to throw you under the bus at any moment; and just in case you feel like adjusters are the un-loved step-child of the insurance industry, remember what an adjuster does.
And don’t forget to pat yourself on the back every now and then for a job well done; for being equitable and ethical. You do make a difference in this world and so does the adjuster sitting next to you. Pat them on the back too. That’s what an adjuster does.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Well said, Peter and Amen!
Peter falls into that skill category.
Recently, Peter’s missive discussed why claims adjusters fulfill a positive societal role. It is one of the best -- perhaps THE best – “Big Picture” perspective I have ever read on why claims people have reason to be proud and to hold their heads up high with regard to their chosen profession.
Too many times claims people have a permanent inferiority complex. I confess that I have often referred to claims as the Rodney Dangerfield’s of the insurance industry. I say that more as a description rather than legitimizing that sad state of affairs. Nobody entered the claims business for its prestige, high pay or cache during cocktail party introductions.
If as a claims adjuster you ever wonder whether you are making a difference by doing your job, please consider and ponder the following excellent articulation as to why adjusters matter. The following segment is reprinted with permission from Peter Crosa:
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
What have you given back to society? Is your community better off because you’re in it? If you’re an adjuster, the answer is yes. Here’s why.
You are given the responsibility to investigate and adjudicate contractual obligations and torts between citizens. Every claim you resolve before a law suit is filed, saves the cost of a trial. The cost of a trial includes the cost of the courtroom facilities and utilities, salaries of the courtroom staff, attorneys, jurors, witnesses and experts. It saves the time, sometimes several days, of the lives of countless people that would have participated in the trial.
So, just in case you ever feel embittered, embattled and unappreciated; just in case you get the feeling your supervisor is ready to throw you under the bus at any moment; and just in case you feel like adjusters are the un-loved step-child of the insurance industry, remember what an adjuster does.
And don’t forget to pat yourself on the back every now and then for a job well done; for being equitable and ethical. You do make a difference in this world and so does the adjuster sitting next to you. Pat them on the back too. That’s what an adjuster does.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
Well said, Peter and Amen!
Monday, February 23, 2009
Two Insurers Make Business Week List of “Top 25 Service Champions”
Business Week just featured its annual ranking of the nation’s top 25 “Customer Service Champs.” (Number One: Amazon.com). What caught my eye though was that two insurance companies made the list.
Weighing in at #2 -- in hot pursuit of Amazon, was USAA.
Coming in at #15 – Amica Insurance Company.
It is hard to tell how much claim service entered into these rankings. The commentary on USAA was that it handled 150,000 “cat” claims in 2008, twice its average. It enjoys a 96% retention rate, so it must be doing something good in the claims area.
Amica is lauded for investing in new technology to speed claim processing. It also notes Amica’s investment in staff and its employee turnover rate which is a measly 7% per year.
Claim service appears to be one path toward becoming a service champion!
Weighing in at #2 -- in hot pursuit of Amazon, was USAA.
Coming in at #15 – Amica Insurance Company.
It is hard to tell how much claim service entered into these rankings. The commentary on USAA was that it handled 150,000 “cat” claims in 2008, twice its average. It enjoys a 96% retention rate, so it must be doing something good in the claims area.
Amica is lauded for investing in new technology to speed claim processing. It also notes Amica’s investment in staff and its employee turnover rate which is a measly 7% per year.
Claim service appears to be one path toward becoming a service champion!
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