There is nothing more integral to an insurance carrier’s offering than the quality of its claims department. In fact, a recent Insurance Business America survey identified claims processing as the number one priority producers have when assessing a prospective carrier.
“Claims is not something an agent really wants to deal with because there is no good claim. A loss is a loss,” said Bud Trice, vice president of Crawford & Company’s catastrophe services group and a nearly 50-year claims handling veteran. “Bad service during a claim can only hurt the agent tremendously.”
Fortunately, carriers seem to be following through on this promise. Survey respondents gave carriers a 3.87-star rating, out of five, on their ability to adequately handle claims.
Similarly, a new Towers Watson survey of chief claim officers at US property and casualty companies finds that most (86%) feel they empower their claim supervisors with the authority to “make critical decisions and provide direction to their teams.”
However, officers also run into problems in their day-to-day duties. On average, claims supervisors spend less than three hours on reviewing claims files and nearly a quarter spend two hours or less reviewing these key documents.
Supervisors say they spend more than half their day on other activities, a product of misguided supervisor focus and conflicting workplace responsibilities, Towers Watson researchers found.
“Greater focus on reviewing claim-handler files is necessary—three hours a day is insufficient to efficiently manage claims,” said Frank Ramsay, lead on Towers Watson’s North American Claim Management practice.
“Competing priorities prevent supervisors from spending enough time reviewing the files of their direct reports. This inhibits the claim operation’s ability to deliver optimal claim outcomes and can have an adverse effect on insurers’ profitability.”
Other problems include high claim inventories, which 49% of officers identified as the primary challenge facing supervisors and an insufficient understanding of claim leading indicators and metrics (46%).
Effective supervision was named the leading factor in delivering the most value in claims outcomes, while 60% of respondents said ineffective supervision is a “key barrier to exception claim performance.”
In negotiating these and other difficulties, Trice feels agents must have greater understanding and empathy for claims officers.
“Agents should realize that we’re all doing our jobs the best way we know how,” he said. “Speaking for the industry, no one is out there intentionally making mistakes. Even a fool, in his own eyes, is right.”
