Archive for September, 2011

How benchmarking can improve subrogation results

It is often said that the devil is in the details and perhaps nowhere is this truer than the insurance claims process where benchmarking and metrics define both quality and results.   This is particularly evident in the subrogation arena; where upwards of 15% of all claims are closed with a missed subrogation opportunity at an annual cost of $15 billion dollars. 

In my experience overseeing a large organizational claims and subrogation processes, this actually strikes me as low, as it may not fully encompass cases where the adjuster settlement was based upon total liability as opposed to properly identifying comparative negligence. 

When considering benchmarks, there are time bound and results oriented metrics which all have an impact on an organizational bottom line.  The most commonly used benchmark, which dates back to the original Ward studies in the 1990’s measures Total Dollars of Net Subrogation Recoveries as a % of Total Indemnity Paid Losses for Personal Auto Collision.  This is probably the most common benchmark but is only as accurate as subrogation identification, which often lacks within carriers resulting in collectible files being closed with no recovery.   After the original study, it was concluded that high performing carriers collect about 23.7% while the total universe is at 11.6%.

In the years since, there has been some focus by carriers on improving their subrogation process which has led to an increase in recovered dollars.   According to a recent NASP benchmarking study, net recoveries to total paid collision is 27% for standard carriers and 14.5% for non standard carriers. 

A potential flaw with the current benchmarking methodology is its heavy reliance on collisions.  While 72% of recoveries are indeed related to collision, it is shortsighted to not give consideration to all line coverage’s where subrogation is a viable option, in particular UM, UIM, UMPD, PIP and Medical Payment’s.   In addition, there are even more overlooked opportunities for health, worker’s compensation and property insurance. 

Some key metrics that can be considered by carriers include the following:

  • Recognition percentage – dollars identified as recoverable from paid dollars by claims adjusters.  The key here is having a pool of adjusters who understand the concept of subrogation, local jurisdictional knowledge and having the ability to negotiate shared liability settlements.  In industry benchmarking studies, subrogation recognition generally ranges from a high of 45 files to a low of 5 for every 100 new claims.   Specific to my experience, the optimal collision referral rate, while dependent upon negligence laws, should be around 35% in a pure comparative state, 25% in a modified comparative state and 15% in a contributory state.
  • Recovery Rate – dollars actually recovered from total paid dollars.  Measure this in terms of both gross recovery as well as costs after factoring in expenses.  When factoring comparative negligence and improper referrals, the recovery rate should be somewhere in the range of 85-90%.   This requires adjusters properly identifying subrogation, assessing comparative negligence and pursuing only what they are entitled to.  
  • Recovery Rate per FTE. Include in this both the gross dollars as well as net dollars and expenses incurred.  There is a wide variance among adjusters, but a good target would be $1,000,000 per subrogation adjuster.  
  • Cycle Time- time from subrogation identification to recovery.   The industry average is about 200 days, yet the average time to issue final payment is about 10 days.   With the ability to fast track arbitrations and leverage technology, this could be compressed to well less than 100 days.   Each day that the money sits on the table there is a quantifiable impact to the actuarial triangles.  
  • Subrogation Allocated Loss Expenses (ALE) – file related expense dollars paid to recover subrogation dollars.  It makes no sense to spend $500 dollars in overhead to recover $400.  The following model exemplifies when it may make more financial sense to outsource more complex portions of recovery operations. 

  

  • Subrogation Unallocated Expenses – non-file related expense dollars paid to recover subrogation.
  • Recovery Multiple – ratio of recovery dollars to expense dollars
  • Files closed with no Recovery-Percentage of files referred to subrogation that are closed with no recovery.   While there can be legitimate reasons, carriers invariably tend to close files prematurely particularly in cases involving uninsured tortfeasors who tend to be a challenge for carrier subrogation adjusters. 

Some benchmarks that carriers could utilize to most effectively gauge their subrogation performance could also include a formula that divides total staff into total recoveries for a recovery amount per FTE.   This should be used in conjunction with disposition numbers such as total closures and cases closed with no recovery.  

When looking at the percentage of files closed with no recovery, it is critical to understand the carrier’s workflow.  Many carriers use internal adjusters, often with little debt collection experience, to pursue uninsured tortfeasors.   A good barometer of how much money is being left on the table is the frequency by which second, third or even fourth looks are sent out to the open market where a vendor will review it, often at no charge.    

While not an insurer, AT&T uses one of the most robust and effective collection strategies available.  They don’t rely on one vendor, but rather upwards of 27 vendors, that are used for secondary, tertiary and quaternary reviews.  They post all results daily, creating a climate of competition.   What carriers need to realize is that on a third review, they may recoup another 1-3%, while a quaternary review may yield an additional percentage point on top of that which is critical in a market with tight margins.  At the end of the day, what remains uncollected is sold on the open market. 

One key aspect that is not often considered in subrogation benchmarking is that of claims.   To truly understand the end to end process, the following metrics can be very beneficial in identifying opportunities to maximize recoveries. 

  • Percentage of files referred to subrogation by line coverage. 
  • Percentage of files where collision was paid but no PD was paid with no associated referral to subrogation.
  • Percentage of claims where liability was assessed at either 0% or 100% or similar moniker in claims system such as insured not at fault/insured at fault. 
  • Referral of supplementals and rental invoices to subrogation.

Many carriers will look at just a fraction of the available metrics, often focusing on those that are easily obtainable, such as bottom line recoveries or percentage of collision referrals.   This approach can have unintended consequences, such as adjusters referring to meet a number rather than doing their investigation.   The challenge with any metric is to ensure that there is quality control in place, as policing adjusters is often required to make sure that they are doing the right thing.   

Christopher Tidball is a claims and subrogation consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary to Extraordinary.   His career in claims spans two decades as a Claims Adjuster, Manager, Quality Assurance Director and Claims Process Leader.   For more information, please visist www.christidball.com or email chris@christidball.com

September 28, 2011 at 10:49 am Leave a comment

The Art of Subrogation Response

What happens when subrogation demands come in to your organization?  If you are like many in the industry, responding is not a high priority amongst adjusters.   In the eyes of many handling these types of claims, it is often viewed as being just another carrier on the other end of the demand.

In looking at what carriers are doing, there are various processes in place.   While some are effective, others are very time consuming resulting in adjusters putting these off even longer which can result in an increase in arbitration or litigation filings.  

While there are no hard and fast rules for subrogation response, there are steps that can be taken to dramatically improve results.    As I consult with insurers, it seems that there are three processes that tend to govern how these types of claims are handled. 

  1. Liability Adjuster Review and Pay- The subrogation demand goes to the liability adjuster who reviews the claim for payment.   In many cases, these “low priority” demands are simply rubber stamped. 
  2. Estimate Rekeying- In some instances, the inbound demands are sent to material damage adjuster to rekey.   While this can result in some estimate reduction, it is a time consuming process and often lacks a containment mechanism for excessive rental, diminution of value or administrative fees.  
  3. Estimate Redlining- Adjusters will review the estimate and redline certain items that stand out.  While quicker than rekeying, this solution often has limitations on effectiveness, especially when seeking out alternative parts or identifying included and overlap operations.  

In many instances, the savings found through rekeying or redlining aren’t realized when the claim is sent back to the liability adjuster to negotiate.     In a recent meeting with an insurer, they conveyed that their material damage team was reducing estimates by nearly 10%, yet when the actual payment detail was reviewed, these found savings were realized less than 1% of the time.   As is often the case, the root cause was ineffective negotiations. 

Another critical oversight is comparative negligence.    When reviewing claims in your organization, does there appear to be a disproportionate number of liability decisions at either 0% or 100%?   In my experience the answer has always been yes.  

The reality is that far more accidents than most people realize have shared culpability.  According to Jury Verdict Research, a national organization that tracks such data, rear end auto accidents accounted for only 45 percent of auto cases adjudicated, with the remainder comprised of intersection collisions, lane changes, chain reactions, and parking lot scenarios. In other words, a lot of claims where there was shared liability. 

 

As an insurer, you certainly shouldn’t expect to set a benchmark that high, as very few claims actually make it to trial. What you can do, however, is bank on the fact that if fewer than 35 percent of your collision claims are closing without comparative fault, then money is being left on the table.

Again, the challenge is to effectively train your staff to not only effectively identify opportunities, but teach them how to negotiate.  

When considering subrogation response, there are six key areas where your organization can not only benefit but gain a competitive edge in the marketplace. 

  1. Estimatics opportunities – While this can be partially accomplished by rekeying or redlining, why not take the next step and utilize automation to identify opportunities?
  2. Historical alternative parts identification – Subrogation responses can be significantly impacted by identifying if used or aftermarket parts were available on the date in history when the claimant carrier wrote their estimate.
  3. Adjust the fluff- How much are you being billed to tint paint, feather edge, cover cars and dispose of hazardous waste.    While not the bulk of the estimate, fluff can really add up. 
  4. Diminution of Value– There are rarely statutory guidelines that govern how much is owed, if anything, due to diminution of value.  After all, is there really any diminished value until the owner sells the car, discloses the accident and suffers diminshed value as a result of the disclosure? 
  5. Comparative Negligence– This is arguably one of the most overlooked aspects of the subrogation response process.   By effectively understanding the principles of shared liability, adjusters can more effectively apply the laws in their given states.   This is also an aspect of the claims process that can be measured and continually improved upon. 
  6. Loss of use- Did the claimant really need their rental vehicle for thirty days when the estimate called for sixteen hours of repair time?   The reality in many claims organizations is that rental is not well managed.   In some cases, the process of overseeing rental is even outsourced to the rental company who is in the business of increasing their own revenue, not yours.   By applying a reasonable standard, such as one day of rental for every few hours of repair, one can effectively reduce what is owed in this regard.   

As subrogation demands come in, consider the steps that are being taken to identify opportunities.   While there are many aspects of claims that can often benefit from improvement, subrogation response provides an immediate financial gain because those effectively handling this process will gain a competitive edge over those who are not.  

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary!   He is an industry veteran who has successfully developed and implemented claims and recovery processes for a wide variety of insurance carriers, TPA’s and self insured’s.  To learn more, please visit www.christidball.com or e-mail chris@christidball.com

 

 

September 19, 2011 at 12:41 pm Leave a comment

Intuition and organizational effectiveness

In the movie Beverly Hills Cop, Detective Axel Foley (portrayed by Eddie Murphy) says, “I got a hunch, okay. That’s a technique by which many crimes outside of Beverly Hills get solved.”  For those who have ever worked in a claims organization, you may consider this to be sage advice. 

From investigating claims to hiring the right people, it is the hunch, or intuition that often separates the ordinary from the extraordinary.   As I have said during business meetings, presentations and in my latest book, Re-Adjusted: 20 Essential Rules To Taking Your Claims Organization From Ordinary To Extraordinary, a career in claims isn’t for just anyone.  

After all, it takes a certain personality to overcome the many obstacles and challenges put in place by insured’s, claimants, managers, executives, shareholders, attorneys and regulators.   Having spent more than twenty years in various capacities ranging from line adjuster to management to executive leadership, I can attest to these challenges firsthand. 

But for the right people, intuition can lead to a high level of success.   After all, it is the insatiably curious who become the successful adjusters; often leading to expanding roles in the organization.   As managers, it is those who follow their hunches on hiring that builds a pipeline of talent that will give the organization a competitive edge in a marketplace far too often mired in mediocrity. 

Think of intuition as nothing more than blocking and tackling for the mind.   It is taking the step of thinking outside of the box and adopting a new paradigm that enables one to think of all possibilities.   Rather than simply following steps in order to meet expectations, it is intuition that enables people to exceed expectations by forcing them to use their intelligence in support of their propositions.  

With the football season underway, take some time to observe the action of the players on the field.   As the quarterback calls his plays, look for him to alter the calls mid stream.  This is a real life example of intuition in play, whereby his intuition is telling him to do something differently.  As he reads the defense, his intuition becomes the ally of reason enabling more effective blocking and tackling. 

The same holds true in claims, where the constantly changing dynamics, both internally and externally, can never support a static process.   In an environment, be it on the gridiron or in an office, where change is the only constant, it requires bold execution, both physically and mentally to succeed.  

According to Albert Einstein, the only real valuable thing that we possess is our intuition.   According to Dr. Joyce Brothers, intuition is reality filed just below the conscious level.   It is through the effective use of intuition that blocking and tackling improves at every level of the organization. 

Have the courage to follow your heart and intuition –
they somehow already know what you truly want to become.
– Steve Jobs

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He is a twenty plus year industry veteran who has served in functions from adjusting and management to quality assurance and executive leadership for multiple Top 10 P&C carriers.  To learn more, please visit www.christidball.com or e-mail chris@christidball.com

September 16, 2011 at 7:21 am Leave a comment

Moneyball: Hire for attitude and train for skills

As we focus on the concept of moneyball, and building a winning organization, there are certain things that money can’t buy.  Perhaps first and foremost is attitude.    There is nothing, irrespective of a person’s talent or ability, that brings down an organization faster than bad attitudes.  

Not to pass judgment on the airline industry, but consider various flying experiences that you may have had recently?  From a personal perspective, there is one airline that stands above all others.   In hearing the hiring philosophy from Southwest President Emerius Colleen Barrett, now I know why, “We spend more of our time hiring the right people for their attitude and then training them for their skills.  You need to have clear values and follow them religiously.  We turned out to be a winning team.”

In the book  Kicked to the Curb: 20 Essential Rules for Coming out on Top When Your World Has Been Turned Upside Down, the concept of negativity begetting more negativity  introduced.    Let’s face it, there are winners who focus on the positive and whiners who focus on the negative in all aspects of our life.  

Perhaps nowhere is this more obvious than at your office.  As discussed earlier in the moneyball series, organizations can be defined by A players, B players and C players.   The A players, or those destined for success, won’t be the ones congregating to complain, just as the C players won’t gather to share the highlights of the latest quarter, stock prices or new marketplace innovations?   Increasing the former and  eliminating the latter, is a critical component of developing a winning organization.  Remember, skills can be trained, attitude cannot. 

But how do you identify the right person?  Certainly pre-employment testing can be highly beneficial and is a means used by a number of industry leading companies to identify the ideal candidates.   Other companies use a targeted selection process through which a series of questions designed to elicit specific responses reflective of competence.  Still others sit down and interview the old fashioned way, asking simple questions while getting to know the person.  

All methods have proponents and detractors and none is really any better than the next.   In combination, they can prove to be a winning formula.   That said, it’s tough to get to know the person until they are in the door as tests can be gamed, targeted questions can be answered with the sought after response and everyone puts their best foot forward during the face to face interview.   While references can be contacted, it is very unlikely and often unlawful, for a person to give an actual portrayal of what an employee will be like.   

As you can see, hiring can be very difficult and as a general rule of thumb, a bad employee will make the organization worse than simply not hiring a person at all.   A consideration is that those hiring often select candidates with similar traits and characteristics to their own.   By continually focusing on proven rules for maintaining a positive attitude, it is possible to dramatically increase the chances of hiring positive attitudes as well: 

  1. Believe in the power of positive thought.
  2. Beware of those people who do not share positive thought.
  3. Be objective when analyzing your current situation.
  4. Be mindful of living a healthy life.
  5. Be a facilitator of change if negativity enters your sphere of being.
  6. Be patient with those who also seek the power of positive thought.
  7. Be kind to those seeking the power.
  8. Be aware of a greater power to whom you are serving.
  9. Become a better person.
  10. Be the light when entering a room. 

As Winston Churchill once said, “Attitude is a little thing that makes a big difference.”  It is your attitude that will define your path of your life’s journey, as well as influencing the behavior of those around you.

Chris Tidball is a corporate consultant and the author of multiple books including Re-Adjusted and Kicked to the Curb.   He is a twenty plus year veteran of the insurance industry providing organizations with innovative tools to improve their bottom line.   For more information please visit www.christidball.com or email  chris@christidball.com.

September 14, 2011 at 6:47 am Leave a comment

The Desire To Succeed

As discussed in yesterday’s blog, Moneyball,  or the art of sabremetrics,  takes center stage  in the upcoming movie that portrays the  real life saga of Billy Beane and the Oakland A’s.   But is there more than just money that leads to the success of the A’s as Beane implements a formula to use statistics to create a winning team of under appreciated talent?

Throughout the course of this week, we are going to take a look at what creates a winning team.   Certainly money plays a role, but as Beane  proves, it doesn’t always buy success.   What must come with money, and arguably more important, is the desire to succeed.  

Looking around your own industry, or organization, consider those who have succeeded and what inspired that success?  Without fail, the one characteristic that stands above all is an internal drive, or desire for both self improvement and organizational improvement. 

In Re-Adjusted: 20 Essential Rules To Take Your Organization From Ordinary To Extraordinary, I share my experience from a few years back while coaching a Pop Warner youth football team.   These weren’t the fastest kids, or the strongest, or the most athletic.  Yet they ran the table to an undefeated season, giving up points in only one game.   The overriding factor was a desire to win.  

These same characteristics describe organizations that have succeeded, where employees at all level seek out new and innovative ways to become better individuals, contributors and team players in the name of success.     

In claims this desire becomes a little more complex, as success must also be driven by an insatiable curiosity.     It is this desire to always ask “who, what, where, when, why and how” in order to achieve optimal outcomes.  

This desire isn’t something that can be bought, but rather is a characteristic of those who are destined to succeed amid the challenges of modern day claims organizations.     It is this desire that should be sought during the hiring, or acquisition process, that should never equate tenure with desire, talent or ability.  

As coaching great Vince Lombardi once said,  “The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.”  It is this lack of desire that hamstrings success

Of course this desire for success must start at the top, where a culture of exceeding expectations is borne.   Consider the success of industry leaders such as Southwest Airlines, Apple or Honda, that have gone from ordinary to extraordinary and examine the dynamics of what makes their organizations great.   At the core are their people, lead by both a management team and a culture where success is driven by melding outstanding products with a never ending desire to provide  an incredible customer experience.  

The recipe for success isn’t that difficult.   The biggest challenge is finding the ingredients, or people who have the desire to take your organization from ordinary to extraordinary.  

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He is a twenty plus year industry veteran who has served in functions from adjusting and management to quality assurance and executive leadership for multiple Top 10 P&C carriers.  To learn more, please visit www.christidball.com or e-mail chris@christidball.com

September 13, 2011 at 6:01 am Leave a comment

Moneyball and the art of winning an unfair game

In the upcoming movie, Moneyball, the art of sabremetrics takes centerstage as this real life saga of Billy Beane and the Oakland A’s unfolds.   Sabermetrics is the analysis of baseball through objective, empirical evidence, especially baseball statistics that measure in-game activity rather than industry activity such as attendance.   By focusing on actual contribution to a team, use of this formula theoretically enables teams to hire undervalued players which in turn brings salaries in line with affordability.  

In Moneyball, author Michael Lewis examines the disparities between big market teams, such as the New York Yankees, who can fund a roster of big name, high paid, free agents, and small market teams struggling to fill the stands.  

A prime example was the 2002 season, where the Yankees had a payroll of $126 million, and the A’s had a payroll of about $40 million. Despite the disparity, the two teams tied for the best record in baseball, each winning 103 games, though both lost in the playoffs. The A’s, as it happened, lost to the small market Twins, who paid their players just an iota more than the A’s.

In any industry, sports or otherwise, there are the big name players and those trying to make a name for themselves.   In any organization, salaries are a large part of operational budgets, often exceeding the fifty percent mark in terms of capital outlay.    So it makes perfect sense to evaluate salaries provided there is no detrimental impact to quality or outcomces.   

As I discuss in Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extordinary, the quality of a claims staff is often driven by far more than just salary.    In this week’s five part  expose, we will discuss what steps can be taken to put together the winning team.  

In addition to compensation, we will be looking at the following key characteristics of the successful team:

1-      Passion

2-      Attitude

3-      Intuition

4-      Innovation

Like moneyball, concepts similar to sabremetrics can be applied to any profession, including claims.    By using objective evidence, it is possible to selectively identify the characteristics of A players, B players and C players, with the latter being the greatest impediment to success.  

As basketball coaching great John Wooden once said, “I’d rather have a lot of talent and a little experience than a little talent and a lot of experience.”  In translating this during my own career when challenged with growing a claims organization, I found that hiring talent with little experience provided a wealth of opportunities to train, develop and motivate a pool of employees to consistently exceed expectations. 

This can be equated with using the draft as opposed to a free agent acquisition.   Like any organization, there is a time and a place for the latter, but when looking for consistent, long term results, there is no substitute to effectively using the draft model.  

In my experience, there was initial resistance from a hierarchy that was accustomed to hiring experience in lieu of absorbing training costs.   After all, why train a talented individual to go work for someone else?  Then again, what better way to provide young talent with an internal path to long term career opportunities than building bench strength and having a strong succession plan in place? 

When applying sabremetrics to claims, there are a few considerations.    First, consider that many organizations are comprised of 20% A players, 60% B players and 20% C players.    Second, recognize that 80% of organizational challenges (delays, excuses, absenteeism, lack of compliance) will come from the latter.   Third, recognize that the largest pool of people, the B players, will either move up or down depending on strength of leadership. 

A key fundamental of sabremetrics is to not mistake judgments for results.   A judgment would dictate that a two year claim professional cannot be an effective manager.   A result would reflect that a two year claim professional that moved into management had a work group that consistently exceeded expectations.   This is a key fundamental difference. 

This is not to say that there aren’t “A” players with extensive tenure; there are.  But, what it does reinforce is that tenure should never be the sole determiner of quality.  Rather, the effective organizational model moves away from tenure, and focuses on the quality of the individual and their ability to deliver consistent results.

So how does one determine whether a person has those qualities?   In some organizations, personality testing is used.   There is no question that this can be beneficial in claims where it clearly takes a certain type of person to be successful.   For those who have spent time in the trenches, be it in the field or in management, there is a ubiquitous recognition that claims is not for everyone.   Nor should just anyone  be considered for this type of career.  

When not utilizing external testing, consider all of the qualities that the person brings to the table.  What is their background?   Have they worked in chaotic environments, requiring snap decisions?  Have they attended big, bureaucratic schools where simply changing classes could be an exercise in futility?  Have they been forced to multi-task and think outside the box in environments where exceeding customer expectations is a requirement for job continuity?   Have they had direct interaction with, and influenced decision makers?  These are just a few of many questions that should be asked when looking to develop a team built for success.

It is important to remember that failure is not fatal, but failure to change very well might be.   It is the little things that make the bold goals attainable.   It is this level of focus from above that can fundamentally transform any team from ordinary to extraordinary.  

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He is a twenty plus year industry veteran who has served in functions from adjusting and management to quality assurance and executive leadership for multiple Top 10 P&C carriers.  To learn more, please visit www.christidball.com or e-mail chris@christidball.com

September 12, 2011 at 7:18 am Leave a comment

Harvesting the low hanging fruit

Every once in a while I get a call from a fellow claims professional inquiring about “easy pickings” to jump start a sputtering bottom line.   As discussed in Re-Adjusted: 20 Essential Rules to Take Your Claims Organization from Ordinary to Extraordinary, there are plenty of opportunities.  

What it comes down to are the strengths and weaknesses in one’s own operation.   From first notice of loss and estimatics to fraud recognition and liability assessment, there is generally some low hanging fruit in every claims organization.  

Perhaps one of the most overlooked opportunities is that of subrogation response.   While many claims organizations have established subrogation processes, these are often focused on the demand side, or requests for money from another, at fault, insurer.   But what about the demands coming into the organization? 

In my experience as a former claims leader, this was typically an area of opportunity.   Like many organizations, our inbound demands went to the handling liability adjuster who was often overwhelmed with work.   As a result, these inbound demands tended to have a low priority, often resulting in their being rubber stamped, or in the worst cases simply ignored until the claimant carrier filed arbitration.   Even then, an astounding default rate resulted in demands, whether reasonable or not, being paid in their entirety. 

This problem isn’t unique to any particular carrier, but rather an opportunity for many.   While a small subset of all claims, it is one that internal and external audits cite for excessive leakage.  Here are six simple steps to improving subrogation response results:

 1-      Timely review of the estimate and all relevant expenses, including towing, storage and rental, with the latter providing the potential for significant lift. 

2-      Identification of historical used or aftermarket parts availability.   For example, if the claimant carrier wrote an estimate on June 10, 2011, how do you know if they maximized the use of alternative parts?   To address this, a review of a historical alternative parts database is a necessity. 

3-      Aggressively negotiate any items that are in controversy.   It is not uncommon for the adverse carrier to defend their estimate.   Using effective negotiating techniques is the key to succeeding in these discussions. 

4-      Don’t give back what’s yours.  In many organizations, a process is in place whereby demand estimates are reviewed by a material damage team which identifies opportunities.  While these reviews can be beneficial, the net results are often limited as outcomes as the result of ineffective negotiations.  

5-      Accurately assess liability.   It is rare for there to be a totality of liability, whereby one person is either 0% or 100% at fault.   According to Jury Verdict Research, a national organization that tracks such data, rear end auto accidents accounted for only 45 percent of auto cases adjudicated, with the remainder comprised of intersection collisions, lane changes, chain reactions, and parking lot scenarios. In other words, a lot of claims where there was shared liability. 

6-       Effectively arbitrating claims when the need arises.   Inter-company arbitration can be a great resource for resolving disputes, but keep in mind that outcomes are only as good as the quality of contentions and responses.   As the old adage goes, garbage in; garbage out.  

 As Vince Lombardi once said, “Some people try to find things in this game that don’t exist but football is only two things – blocking and tackling.   So too is insurance claims, and by focusing on the proper execution every step of the way, organizations can quickly gain a significant lift in productivity and outcomes enabling them to rapidly pull away from the competition.  

Christopher Tidball is an executive claims consultant and the author of Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary.   He has worked with a variety of P&C carriers, self insureds and municipalities on improving end to end claims processes, including subrogation response.   His proven methods have consistently delivered results to those looking to gain a competitive edge in the marketplace.   To learn more, please visit www.christidball.com , e-mail chris@christidball.com or call (904) 742-9031.

 

September 6, 2011 at 9:34 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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