Archive for May, 2011

Great companies don’t simply improve; they redefine their respective industries

While internal benchmarking is a great tool for self improvement, what does it tell you about your standing in the industry?   In simplest terms, consider the football team that was averaging 240 yards of offense per game, a 10% increase over last season’s performance.   On the surface, the year to year increase looks impressive.   But what if the league average is 310 yards?  Now the results don’t look so impressive.     

The same holds true in claims where insurers are notoriously good at benchmarking internal data, but what happens when this data gets compared to the industry?    From cycle time and average indemnity payments to recoveries and expense costs, there is certainly no shortage of possible metrics.   The bigger question is whether they are being used effectively. 

When measuring results, there are key drivers of success.   Measuring internal improvement is a good first step, but certainly not the final step to gauging improvement.   If 5% of all collision claims were closed with an assessment of comparative negligence last year and the number is 10% this year, this is indicative of positive internal improvement.  But what if the industry wide number is 20%?  What if beta improvement projects showed a potential for 30% or more? 

To truly take the leap to success, an organization must set big, audacious goals.     What good is a winning record if a team misses the playoffs or championship?  The goal should be winning it all, and from this winning at all costs mentality will come a renewed focus on process improvement. 

A few years ago I coached a football team that went undefeated, scored 239 points and gave up 12.   This team wasn’t the biggest or fastest or most intimidating.   They won for one reason; execution.  At every time, in every game (save two scores) this team blocked and tackled their way to win upon win. 

If a group of Pop Warner youth players can do it, think of the potential for organizations looking to gain a competitive edge in the marketplace.  

While claims may not be the gridiron, it’s important to recognize that they share many of the same characteristics.   As I discuss in my book Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary, lessons learned on the field can be invaluable when seeking organizational improvement.

As Vince Lombardi once said, “Winning is not a sometime thing, it is an all time thing.  You don’t win once in a while, you don’t do things right once in a while,  you do them right all the time.  Winning is a habit.  Unfortunately, so is losing.”

When benchmarking, a portion of winning is what is done internally.  A greater portion is what is done against the competition.   Great companies aren’t ones that simply improve themselves; rather, they are ones that redefine their respective industries.  

Think of an industry and the first name that comes to mind.   It is usually the company that sets the bar, or the company that is at the bottom of the barrel.   While there are exponentially more in between, the reality of the human psyche is that people focus on the best and the worst.  

Southwest Airlines, FedEx, Home Depot, Wal-Mart and Apple all share the distinction of being in Fortune’s most admired companies.   These are companies that have redefined their respective industries and developed loyal followings.   

Perhaps what is most striking is the success that industry leaders have had in a relatively short period of time.   More often than not, those redefining industry aren’t the entrenched and established, but rather those with bold new visions.  

So when considering how best to approach benchmarking,  consider what you are trying to accomplish.  Is it better customer service, reduced cycle time, improved indemnity, reduced costs, increased recovery or a combination of many things?  

Rather than looking at internal results, focus on what industry leaders are doing.   What differentiates the best, worst and marginal performers?   Often, it comes down to people, processes and technology.  Benchmarking will establish where a company is today, but it won’t necessarily drive results.  Rather, it is the leveraging of these three critical components of the organizational foundation that will take a company from ordinary to extraordinary, while simultaneously driving results. 

While perfection may not be attainable, chasing it will result in excellence. – Vince Lombardi

Christopher Tidball is an insurance consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Organization From Ordinary to Extraordinary.   To learn more, please visit www.christidball.com or e-mail chris@christidball.com.

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May 26, 2011 at 3:45 pm Leave a comment

The Boys of Summer

Cleveland Indians - CollageWhen Manny Acta took on the role of managing the Cleveland Indians he was faced with a team that perpetually resided in the AL Central basement.   He didn’t take his role lightly either, seeing the talent that could be a contender if only the team could focus on fundamentals. 

The Cleveland Indians don’t have a lot of household names; at least not yet.   Shin-Soo Choo,  Fausto Carmona and Astrubal Carrera continue to shine, as they enjoy this year’s journey from anonymity to celebrity in front of the crowds now packing Progressive Field. 

What the Indians of 2011 are doing is nothing more than following the rules that will take an organization from ordinary to extraordinary.   Like a professional baseball team, claims organizations can enjoy the same success by sticking to the basics; in other words blocking and tackling on the fundamentals to get the job done. 

While many pundits critical of the Indians point to their lack of statistical leaders, the seemingly miss the point that the Tribe leads in the most important statistic; games won.   By executing on fundamentals, the end result will take care of each and every statistical category.   The same holds true in the claims organization, where a calibrated approach to providing an accurate end result will address every other metric currently measured during the life of a claim. 

Far too often, organizations can get hung up on these types of measurements.   From timely contacts and inspections to cycle time and subrogation referrals, there are an infinite number of metrics that can potentially be measured.   In some instances they can be beneficial, in others they have unintended consequences.   Consider the example of a carrier requiring 48 hour “inspections” where field adjusters would take pictures over tow yard fences, write incomplete estimates, fail to get agreed prices and face a 30% (or higher) supplement rate; yet the metrics showed vehicles consistently inspected within 48 hours. 

By focusing on the end result, or the quality of the output, these types of metrics are addressed.   During my tenure leading the quality assurance program at a Top 10 P&C carrier, we achieved success by shifting the paradigm from piecemeal success to the totality of the results.   As the paradigm of the organization changed, so too did the quality of the work product.   In the end, this improved severities, increased customer satisfaction and drove customer retention.    For the boys of summer, it’s called playing Wahoo baseball; for the rest of us it’s focusing on the fundamentals to achieve results. 

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Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   His claims career has spanned twenty plus years in roles ranging from adjusting and managing to quality assurance and executive leadership.   To learn more, please visit www.christidball.com or e-mail chris@christidball.com  

May 24, 2011 at 7:52 am Leave a comment

33 ways to use LinkedIn for business

Is your LinkedInaccount mostly sitting idle? You can do so much more with it than simply look up contacts: find gigs, sell products, expand your networks, grow your business and gain free publicity.

Here are 33 ways to use LinkedIn more effectively.

  1. Fill out your profile completely to earn trust.
  2. Use widgets to integrate other tools, such as importing your blog entries or Twitter stream into your profile.
  3. Do market research and gain knowledge with Polls.
  4. Share survey and poll results with your contacts.
  5. Answer questions in Questions and Answers: show expertise without a hint of self-promotion.
  6. Ask questions in Questions and Answers to get a feel for what customers and prospects want or think.
  7. Publish your LinkedIn URL on all your marketing collateral, including business cards, email signature, email newsletters, web sites and brochures, so prospects learn more about you.
  8. Grow your network by joining industry and alumni groups related to your business.
  9. Update your status examples of recent work.
  10. Link your status updates with your other social media accounts.
  11. Combine your social media approach: when someone asks a question in Twitter, respond in detail on LinkedIn and link to it from Twitter.
  12. Use the search feature to find people by company, industry and city.
  13. Start and manage a group or fan page for your product, brand or business.
  14. Research your prospects before meeting or contacting them.
  15. Share useful articles and resources that will be of interest to customers and prospects.
  16. Don’t turn off your contacts: avoid hard-sell tactics.
  17. Write honest and valuable recommendations for your contacts.
  18. Request LinkedIn recommendation from happy customers willing to provide testimonials.
  19. Post your presentations on your profile using a presentation application.
  20. Check connections’ locations before traveling so you can meet with those in the city where you’re heading.
  21. Ask your first-level contacts for introductions to their first-level contacts.
  22. Interact with LinkedIn on a regular basis to reach those who may not see you on other social media sites.
  23. Set up to receive LinkedIn messages in your inbox so you can respond right away.
  24. Link to articles and content posted elsewhere, with a summary of why it’s valuable to add to your credibility.
  25. List your newsletter subscription information and archives.
  26. Find experts in your field and invite them as a guest blogger on your blog or speaker at your event.
  27. Post discounts and package deals.
  28. Import vCards and contacts from other applications to find more connections.
  29. Export your contacts into other applications.
  30. Buy a LinkedIn direct ad that only your target market will see.
  31. Post job listings to find qualified talent.
  32. Look for connections related to a job you want.
  33. Find vendors and contractors through connections.

(Thanks to Webworkerdaily for providing these great suggestions for this post.)

For more information on how to our innovative bottom line solutions can instantly improve your revenue stream, stop by www.christidball.com.

May 20, 2011 at 7:20 am Leave a comment

From the gridiron to the boardroom blocking & tackling is the key to winning

Have you ever picked up a claim file and just sort of scratched your head at the events which transpired during the life of the claim?  During a recent audit of a large P&C carrier, I had a number of such situations as I pondered steps that could have been taken to achieve a more accurate outcome. 

It’s not that this should have come as any surprise, as much of my career has involved claims management, quality assurance and process improvement.   It’s just that basic quality should be such an integral part of the claims process that gaps in handling are the exception, and the rare exception at that.

While the focus of this article is claims-centric, the steps to success certainly transcend any particular type of organization.   In fact, basic blocking and tackling is the fundamental building block upon which success can universally be achieved. 

To better understand the concept of accuracy, consider that the result is largely determined before the claim ever happens.   To put this in perspective, let’s use the analogy of the winning football team, where the foundation for winning is set before the game even begins. 

They key to success is fourfold:

1-      The Players– More than any single component of success, the players are critical to quality.  Certainly things like workflow and technology are important, but lacking a talented pool of players is the single biggest stumbling block to achieving success.  

2-      The Coaches– Of equal importance are the coaches.  All the talent in the world cannot effectively execute without tactical direction and a strategic vision.  

3-      The Process– Once the team has been assembled, there is a process that must be adhered to.  Just as a successful football team leverages a dynamic playbook and innovative coaching, the successful organization will leverage the dynamic end to end process and dynamic leadership.  

4-      The Outcomes– These are the byproducts of effective blocking and tackling.   Far too often, processes are managed by exception rather than rule.   If the process is refined, the outcomes should speak for themselves with exceptions remediated through a philosophy of continuous process improvement. 

As discussed in my book, Re:Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary, bringing these concepts from the gridiron to the boardroom enables organizations to achieve excellence.  By focusing on the fundamentals of claims, insurers have the ability to streamline and refine processes in such a way that will ultimately give them a competitive edge in an increasingly competitive marketplace. 

From the first notice of loss to ultimate disposition, recognizing in the potential for errors is critical in defining the workflow.   Accuracy begins on day one, with all pertinent information being obtained and followed up on.   It is here where many gaps begin to rear their ugly head.

Consider the lack of information often obtained, be it phone numbers, tag numbers or insurance details.  To put this in perspective, nearly 40% of files reviewed for missed subrogation opportunities routinely turn up information.  

As the claim progresses, consider the gaps that develop from failure to complete timely estimates, missed opportunities on LKQ and aftermarket parts, improper damage calculations or overlooked joint tortfeasors.  

With carriers doing more with less, other unintended consequences are lurking in the shadows with 15% of all claims being closed with a missed subrogation opportunity.   Even in claims where subrogation has been identified, errant liability decisions have played a role in reducing the optimal settlement.  

While opportunities abound to improve quality, the good news is that success can be achieved inexpensively.   By focusing on basic blocking and tackling, it is possible to calibrate an organization so that outcomes are in sync, rather than widely divergent.  

It is through the calibration process that total quality is measured, as opposed to a piece meal approach.  As an analogy, consider the auto manufacturer that measures a variety of parts to ensure that they were made properly.   At the end of the assembly line, the car looks nice but it doesn’t start.   Wouldn’t it have made more sense to measure the totality of the output? 

The same holds true in claims.  While benchmarking is a necessary tool, it is even more critical to make sure what is being benchmarked makes sense.   While adjusters may strive to exceed expectations, such as timeliness of contacts and inspections, they may falter when it comes to recovery, estimating or settlement opportunities; leaving significant sums on the table annually.   Wouldn’t it make sense to measure to totality of the product, which will ultimately drive results throughout the life of the claim. 

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Christopher Tidball is a claims consultant and the author of Re:Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   His career has spanned more than 20 years for multiple top 10 P&C carriers in roles ranging from claims adjusting and management to quality assurance and leadership.   To learn more please visit www.christidball.com or e-mail chris@christidball.com.

May 19, 2011 at 12:55 pm Leave a comment

Chasing perfection to attain excellence

Driving organizational consistency is arguably one of the greatest challenges facing any claims organization. From indemnity and expense trends to corporate culture; consistency, or lack thereof, ultimately defines outcomes. Given the importance, what is it that so many companies are mired with inconsistency?

Certainly this isn’t for lack of trying. From state laws, rules, regulations, mandates, caselaw and procedure manuals, there is a bevy of information that should point everyone in the right direction. Arguably, following protocol should be no different than a quarterback telling the running back to execute a 3-6 dive on a third and one.  Like football, what looks good on paper may not always reflect the challenges of reality.

Just as a running back has to think on his feet, so do those executing on day to day decisions.  Organizations win because they consistently execute basic blocking and tackling. Whether it’s the Ohio State Buckeyes on the gridiron, Southwest Airlines in the air,  or the executive in the corner office,  decisions are made that drive results. Is every decision going to be right? Of course not, but winning organizations also have a knack for learning from mistakes.

As I discuss in my new book, Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary, attitude plays a pivotal role in driving consistency. The simplest way to achieving this is by hiring the right people at all levels of the organization. Herein lies the problem; just who are the right people and how do you find them?

I recently had a claims executive from a large insurer lamenting that he couldn’t hire people fast enough. While getting seats filled was a priority, bigger problems were emerging as their turnover rate hit fifty percent and quality results fell through the floor. All the procedure manuals in the world won’t drive consistency in that type of hectic environment. But what will happen are poor hiring decisions that rush unqualified candidates into production roles. Taking the time to find the right people shouldn’t be a luxury; it should be part of the successful business model.

Also remember that consistency is not always good. Consider those who pick random data points and consistently strive to simply meet a number. Ask yourself, what good is looking at 100% of all cars in 24 hours if there is a 50% supplement rate? Rather, the truly successful will strive for consistent outcomes that benefit all stakeholders, both internal and external.

During a recent meeting with a health insurer, I was questioned as to why they should alter their business practices to improve subrogation results when they were enjoying a year of record profits. While the existing processes may be a benefit to the internal stakeholders, they came at the expense of policyholders who saw premiums increase 15% during this same time period. While this may be sustainable in the short term, it is not an effective business model. Rather, it creates a tremendous opportunity for competitors to improve internal workflows while gaining market share as the result of decreased premiums.

 It simply isn’t possible to drive consistently excellent outcomes without the right paradigm for success. Instead of focusing on “what we do right”, stress “what we do wrong” which will allow organizations to take tremendous strides towards success. To succeed there needs to be consistency of purpose, process, technology, goals and people. The latter are what will transform the organization from ordinary to extraordinary. This winning paradigm can be all consuming to the extent that those executing on the basics not only accept change but embrace it.

While perfection may not be attainable, consistently pursuing it will lead to excellence. The road to success begins with an end to end process that focuses on the totality of the product rather than singular, often meaningless, points of data. As discussed in Re-Adjusted, this organizational calibration is the foundation upon which perpetual success can be built.

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Christopher Tidball is a claims consultant and author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary. His rules for success have been featured on MSNBC, CBS Market Watch, ABC, Yahoo Finance, Career Builder, Kiplinger’s and the Wall Street Journal. To learn more about taking your organization from ordinary to extraordinary, please visit www.christidball.com or e-mail chris@christidball.com.

May 16, 2011 at 9:21 am Leave a comment

Setting the stage to identify staged accidents

Staged accidents often have an insured and claimant working in conjunction with one another.  In some cases the vehicles will have evidence of mutual contact, such as paint transfers.   In others, two previously damaged vehicles are used to perpetrate the fraud.  More often than not, the at fault vehicle will have an assigned risk or minimum liability policy and an insured who readily admits fault.  

A common variation on the traditional staged accident is the “phantom vehicle” that struck the insured late at night, in a remote location.   The scenarios may involve rear-end impacts of claims of being pushed off the road into an object, such as a tree or light pole.   Rarely is there a police report, unless it is required by statute to file an uninsured motorist claim.  

Generally, the staged accident is arranged by a “capper” who is nothing more than a middleman or broker between claim parties and attorneys.   Typically, the capper will find willing participants who will use their own vehicles, or borrowed ones, to stage the accident.   Rarely will there be any witnesses.  

The capper will give each party a fee of a few hundred dollars, as well as a “script” of statements to make to the insurance company.   In many instances the parties are all known to one another, often residing in the same household, or at a minimum in the same neighborhood.   

Once the stage has been set, the “accident” occurs and it is called into the insurance carrier and the “injured parties” are placed with an attorney, who often is a willing accomplice.   The attorney, in turn, refers the “injured” to medical providers for “treatment”. 

By this time, the claimants have all been paid their fee, or at least a down payment.   They have signed retainers and have checked into the medical clinic where they have filled out sign in sheets for the duration of their treatment, which of course has yet to occur.  

At a given time interval, the clinic provides all medical records to the attorney who submits a demand to the insurance carrier.   The insurance carrier reviews the demand, negotiates a settlement and sends a check to the attorney, who in turns negotiates down the medical bills with the doctors and pads his own take even further.  

It’s a simple scheme, and one that I became all to familiar at the outset of my claims career in South Central Los Angeles, an area notorious for insurance fraud.   It is also one that can come unraveled if carriers conduct a proper investigation!

As with any investigation, it is imperative to speak with all parties to the claim.   In person statements are best, as it requires face to face contact and the adjuster can quickly see if a script is being used.   It is also best to separate all parties.  If a claim is legitimate, then most certainly being separated will have no impact on the statements, as all versions will coincide.    If a claimant pulls out a script, the adjuster should take it prior to commencing the statement.  Again, if a claim is legitimate, there is no need for a script.  

Questions should be extremely detailed.   Beyond dates and times, there should be detailed descriptions of the loss location.   If the police were called, ask for a physical description of the officers.   Did EMT respond?  An ambulance?  What hospital were they taken to?   When it comes to treating providers, ask for descriptions of the medical facility, treating providers, medical equipment, modalities performed and even the route taken from the claimant home to the doctor’s office.  

There should be a detailed description of the accident itself, including the direction in which they were sent in relation to the force.  Remember, an occupant will always go towards the direction of force which is often left out of the script.  

The vehicles themselves should be inspected by the same person and measured for damages.   If two vehicles strike, then there will be evidence such as metal striations to indicate the principal direction of force and paint transfers.    A white car striking a silver one doesn’t leave red paint transfers!

Backgrounds, including index bureau searches, should be conducted on all parties and both the doctor and attorney should be checked through the appropriate state agencies for any prior shenanigans.   Link analysis technology is also a great tool for determining prior relationships between parties.

While these cases can be difficult to prove, it is exponentially easier to get attorney’s to drop them if they get the sense that the investigation is causing the scheme to unravel.  After all, there are plenty more unwitting insurers out there to pursue, so why mess with those who are going to make things difficult? 

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Christopher Tidball is an insurance consultant, freelance writer and author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary!  He shares his claims experiences as an adjuster, manager, Quality Assurance Director and Process Leader with others in the industry to assist them in improving productivity, performance and results.  To learn more, please visit www.christidball.com or e-mail chris@christidball.com if you are interested in learning about innovative solutions guaranteed to give your organization a competitive edge in the marketplace.  

May 13, 2011 at 10:53 am Leave a comment

Subrogation workload: How much is too much?

An often debated question among claims executives is how to properly staff an organization.   Arguably, one of the most challenging of the positions to properly staff is that of subrogation adjuster.  Given the varying degrees of complexities involving recovery operations, this can pose quite an organizational challenge.    So what should a claims organization do?

The simple answer to the question is that it depends;  but the first answer is never base staffing on pending.  It is a self fulfilling prophecy as there is little incentive to close files.   “Hey, if I get to 500 then I won’t get any new.”  Rather focus on new with an emphasis on disposition and quality. 

Other critical questions that need to be answered are:

  • What type of subrogation is being pursued? Auto, Property and workers’ compensation will have different models.  
  • What is the average tenure of the adjuster? 
  • What is the complexity of the claims?
  • What percentage is insured versus uninsured?
  • What is the average time of referral from date of claim payment?

These are just a few of the factors that play into effectively staffing an organization.   In my experience managing claims organizations, and now working with a variety of insurance carriers, the best results are obtained with the following 9 box model and several critical questions.

 

1. Staff subrogation adjusters obtain the best results when limited to claims where insurance has been identified and the claimant carrier is a member of inter-company   arbitration.   In this subset, claims with no dispute should be placed into a Fast Track unit where at least 10/day should be no problem.  

2. Claims with disputes should be placed into a more tenured unit, such as an arbitration unit, so that attempts to settle can be made and if unsuccessful the arbitration contentions can be filed.  Typically, these cases are more complex and assignments may be half of what Fast Track can effectively handle.

3.  Claims identified as uninsured, or as non Arbitration Forums members, are often best handled by business partners with an expertise in tougher collections who have the resources to effectively recover in this challenging environment.  During my tenure as a claims manager I found that keeping tougher collections in house simply doesn’t work as they are recognized by adjusters as impediments to other goals and often find their way off diary or to the bottom of the workbasket.   Getting these claims out the door on day one increases recovery exponentially and actually is cheaper for the carrier than handling them in house. 

4.  Push for a 100 percent disposition ratio without sacrificing quality and pending doesn’t become an issue.  If you get 100 new, then you should close 100.  Provide rewards and incentives for better results.  A properly calibrated organization will increase both disposition and quality. 

5.  Measure closed with no recovery to balance out disposition metrics, which when taken alone,  can drive bad behavior.   In post mortem audits it is not uncommon to find 15 to 20% of files closed prematurely and with a missed opportunity.  

6.  Focus on quality over quantity.   Yes, production is important but it is equally important to have staff in place that can effectively investigate and aggressively negotiate settlements.  By having a solid QA process in your organization you are assured of substantially increasing your bottom line and the QA results should definitely be part of the annual PE, with each stakeholder being held accountable for results. 

*****

Christopher Tidball is a claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He spent more than than twenty years in various claims, process and executive roles with multiple leading insurance carriers, including Progressive, AIG and 21st Century.  His proven success combines dynamic experience with Six Sigma methodologies to identify opportunities, optimize workflows, gain efficiencies and boost results.  To learn  more, please visit www.christidball.com.

May 9, 2011 at 6:54 am Leave a comment

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Chris Tidball is a claims and revenue management consultant and author of the "20 Essential Rules" series of self and organizational improvement books. You can ask him a question at chris@christidball.com

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