[00:00] The greatest success comes from having alignment and collaboration before losses even occur.

[00:08] Paul Lucas: Hello everyone, welcome to Insurance Business TV and a special edition as we meet one of the industry's foremost leaders. That man is Robert Fleckenstein. He is vice president of GTS operations at Crawford & Company and he is leading a reorganization within delegated authority at the firm. Rob, welcome to Insurance Business TV.

[00:27] Robert Fleckenstein: Thank you, Paul. Pleasure to be here.

[00:28] Paul Lucas: So, you have actually spent close to 15 years focused on London market business, indeed going back to your independent adjusting days in 2011. So, how has the concept of delegated claims authority changed over that period and indeed what's driving insurers to treat claims as a strategic function now rather than a back office one?

[00:49] Robert Fleckenstein: That's a great question, Paul. So, over 15 years and obviously from my perspective as an older, not old, claims adjuster, I've seen a lot of things change over the years from things being more centered on what an independent adjuster wrote on his report to the need for more data-driven strategies.

[01:15] What has ultimately happened over the years is you could be the best adjuster in the nation, but if the way you are doing that job is not presented in the way that the data needs to speak to it, it's almost a moot point. So, that's driven a lot of changes when it comes to the governance of data, the data in and of itself and not just whether or not a claim has resolved amicably, but more so how was it resolved? Was it consistent? Was it handled in a fashion that's in line with what is required on a particular program and so on and so forth.

[01:49] So, to date, I would have to say that the success with these changes is driven by how that data is captured not just from the onset of the claim, but throughout and how that's ultimately presented to the clients.

[02:04] Paul Lucas: Speaking of changes, you're tasked with streamlining the operational approach to London market. So, what does a genuine one market London model look like in practice and where do US claims handling realities still create friction with perhaps those London expectations?

[02:21] Robert Fleckenstein: Another great question. Well, as the lead, but also do want to say as a part of a team accomplishing this because it is quite a monumental task for Crawford here. We're 85 years old and function in 70 countries. So, have a lot of employees and a lot of resources available.

[02:39] But what a model ultimately looks like is a streamlined unified approach to our clients in which no matter what claims office at Crawford or what particular adjuster or TPA examiner is receiving that claim, it's going to be a consistent experience for all of our clients.

[03:04] That's a lot to accomplish considering the amount of employees we have, but not only that, working in a very fragmented regulatory industry here in the US when it comes to insurance. You have different requirements at the state levels. So, a lot of different things. You would not necessarily handle a claim the same way in North Carolina from different milestones and time frames as you might in Louisiana or Wyoming and so forth.

[03:31] So, it allows us that area of opportunity to partner with our clients, come alongside them, which is typically very well received, especially with Lloyd's and London markets and domestic as well, to educate to our level as the boots on the ground of what exactly those specific requirements are state to state, venue to venue, litigated claims, coverage issues, things like that.

[03:56] So, bringing all of those things together, coordinating them, again, claims is a strategic business function. So, it's important for us to coordinate all of those different elements and provide that seamless experience to our clients.

[04:16] Paul Lucas: Let's just zoom in a little bit more on those gaps, if you don't mind, as gaps between London market underwriters and US claims teams. Which gaps have you seen perhaps cause the most disruption on complex or catastrophic claims? And how should firms go about closing them?

[04:33] Robert Fleckenstein: Quite frankly, in my experience, it has a tendency to be more informational gaps than they are gaps created by capabilities or incapabilities.

[04:45] Going back to what I was saying previously about things being driven by data, and you could be the best adjuster, but if you are not communicating as clearly as possible, that is going to create a problem, and that is ultimately going to create those gaps. So, quite frankly, in one word, for lack of a better way of putting it, visibility is ultimately just going to be what's going to close those gaps.

[05:08] Because the more visibility as claims professionals we'll be able to provide to our clients, the more we're going to be able to close those gaps, because we are able to ultimately communicate in a way that everyone preemptively understands what's going on. I personally believe that the greatest success comes from having alignment and collaboration before losses even occur.

[05:36] Paul Lucas: Let's zoom in a little bit more on that visibility topic as well, because governance and transparency are increasingly shaping captive and specialty risk programs. So, from your vantage overseeing large complex TPA and captive operations, what does stronger governance actually require in terms of data, reporting, or indeed process change?

[05:58] Robert Fleckenstein: Quite frankly, I truly believe it is turning claims into a strategic partnership by turning it from reactive into an actual tool for predictive analysis and things like that.

[06:12] So, the visibility allows us to look back and look forward and be able to catch trends, identify things potentially before they actually happen, which obviously gives greater visibility to our clients for them and their business and their business decisions.

[06:33] It's the collaboration that is ultimately going to bring about greater partnerships with our clients.

[06:44] Paul Lucas: Makes sense. And of course data has become absolutely at the center of importance right now as well. So, just talk to us about that. How is data-driven decision-making changing the way that captive programs are structured or managed? And indeed, what should risk managers be asking their claims partners for that perhaps they weren't asking say 5 years ago?

[07:06] Robert Fleckenstein: It's changing claims from a reactive environment to a very proactive way of managing risks. So, risk managers really should be asking their partners as claims professionals for data analytics, which again, speaking previously about how important data is, relationships also are just as important.

[07:29] So, the marrying of the data that's being captured to provide those analytics as well as conversations, predictive insights, things like that from local experts in the area, claims adjusters. It creates an environment that I think is pivotal to where you have claims and underwriting operating in a unified practice towards the same outcomes.

[07:54] So, it allows people to have a better sense of not only what has happened in the past using those analytics and things like that, but also allows real conversations to happen about what could potentially happen in the future and what are some things that can be done to maybe prevent certain types of risks and losses, but then also to be better prepared.

[08:15] Paul Lucas: And in the next few years as well, obviously you've got 15 years under your belt. You've seen a lot of change in that time, but what do you expect the biggest structural shift in how London market claims authority is delegated and managed in the US? What do you expect that shift to be and indeed what should insurers or captive owners be doing now to prepare for it?

[08:34] Robert Fleckenstein: I think the shift is going to continue in the direction that has kind of been evidenced over the years. Like you mentioned, 15 years watching that need for data increase exponentially over and over again so that some of the things we've talked about can be accomplished with data analytics and predictive insights.

[08:55] So, I think that's going to continue. I truly believe delegated authority, TPA programs and so on and so forth are going to continue to exist. However, I believe the governance and oversight of those things are going to continue to increase in significance.

[09:14] So, what should risk managers, carriers and so forth be asking from their partners? I think it would be important for them to ensure that they're partnered with companies or firms that are going to be able to provide those data needs as time continues to progress.

[09:28] And those who are going to be able to look ahead and be on the front lines of not just waiting to be asked, but providing insights that they believe would be useful to carriers or other entities.

[09:43] Paul Lucas: Yeah, great insights. No doubt an interesting time ahead as well. Rob, huge thanks for your time today. And of course, remember for more interviews with the insurance industry's leading names, keep it right here on Insurance Business TV.

[09:56] [music]