Sometimes Low-Tech Tools are best for Adjuster Productivity and Effectiveness

Adjusters now have at their disposal all sorts of high-tech tools to presumably increase their productivity.  They have damage estimating software to calculate property loss.

They have Colossus software to help compute the value of bodily injury claims.  We have broadband Internet systems and computers that can calculate at warp speed.  We have calendar and organizational software to manage task lists and key dates.  We have Blackberries, iPhones, 3G smart phones and PDA’s.

These are all handy tools.  I confess to being a bit of a gadget freak and have often been accused of being an “early adopter” by others who were not totally sold on newfangled gizmos.

Sometimes we forget, though, that a key to productivity and effectiveness lies not in technology tools.  Rather, it may rely upon good old-fashioned willpower, the willingness to do things daily as claims professionals that we would really rather not do.  To do things that we would rather put off, delay or procrastinate on.

We don’t want to field that phone call from a difficult claimant who’s phoning for the umpteenth time, badgering us about the “low” damage estimates to her soot-stained kitchen.

We don’t want to deal with the building contractor who says he’s going to need an extra 20% to cover his increased material costs.

We don’t want to handle the difficult commercial account to is forever questioning our reserve numbers as being too high, and even when actuaries who review the same numbers criticize us for setting them too low.

We don’t want to negotiate with a belligerent claimant attorney who has a chip on his shoulder about adjusters and a poorly disguised distain for insurance companies.

We don’t want to leave a warm bed at 3:30 AM to drive 42 miles to stand next to a frigid isolated highway to oversee a tractor trailer accident.

These things we do, not because we want to do them that because they are sometimes the necessary components of being a claims adjuster.  The willingness to do them even when we don’t want to is a hallmark of a productive and effective adjuster; it has nothing to do with one’s technology tools.  To be sure, having a combination of high-tech tools and these character traits will comprise a formidable package in the adjuster’s effectiveness arsenal.

Bicycling champion Lance Armstrong titled his first book, “It’s Not About the Bike.”  His point was that his ability to overcome cancer and to win the Tour de France bicycle race was more due to his own persistence and character and willingness to pay the price it was because he had the most high-tech bicycle.

Yes, in time Lance Armstrong also became a student of bicycle racing technology.  As he began defending successive Tour de France titles, he would exhaustively test bicycle frames in wind titles, check the aerodynamics of various designs of bicycle helmets and even the aerodynamic properties of different types of fabrics next to his skin.  He overlooked no detail in either technology or his training to prepare himself for multiple defenses of his Tour de France yellow jersey.  It was not just about the bike but also about the bedrock character qualities that he exhibited to fight through, to pay the price and to do the unpleasant things that he didn’t want to do — – even if that meant 115 mile training ride through cold rain when he would rather be lounging on the sofa.

As motivational sage Randy Gage has stated as a daily mantra, “I’ll do today what others won’t so I can do tomorrow what others can’t.”

It’s not about the bike and it’s not about the Blackberry, the PDA or the high-tech adjusting tools.  These are all worthy implements for the adjuster, but sometimes low-tech is better.

So, how do you assess YOUR low-tech toolbox?  When you face unpleasant situations in your daily claims handling, do you face them head-on or do you put them off for another day?

What do you eat first — the icing or the cake?

Health Insurer Claim Practices Spotlight Issues with Warped Financial Incentives

Today’s Washington Post had a front-page article (“Canceled Policies Spawn Complaints,” 9/8/09, p. A7) on the infrequent but draconian practice of insurance companies pursuing rescission of insurance contracts, in this case health insurance contracts.  The article highlighted a number of people with health coverage who found themselves high and dry after they got sick or injured for allegedly not disclosing the existence of a pre-existing condition to an insurer.

Specifically, the article reported that Health Net, a health insurance company, admitted offering bonuses to employees for finding reasons to cancel health insurance policies.  Reportedly, this practice was documented in company documents produced during the discovery process of litigation.

This highlights the perils of creating claims adjusting financial incentives that are tied to denying claims.  Companies must be very careful in crafting adjuster reward systems so that they reflect a balanced scorecard of metrics, not just financial metrics and not just bonuses for denying claims.

As a risk management program to prevent bad faith, how is your company doing?  Do adjusters or claim staff have any base income or contingent/bonus income that is tied to denying claims?

Consider another form of rescission …

Pro-Defense Litigation Philosophy Works … Until You Lose One ….

Inside Counsel magazine recently quoted the general counsel of the NCAA, Else Cole, as saying, “We know if we do begin to settle, we’ll have even more lawsuits filed against us” (September 2009, p. 14).   This is an interesting litigation strategy and one not atypical of large corporations.  It is a restatement of the deterrence theory and Domino theory.

The strategy is successful so long as you keep winning.  Once you lose a case — and all it takes is one loss — the opportunity to settle on your terms may have evaporated and now the defendant has even more lawsuits filed against it.

This is not to say that the anti-settlement strategy is a bad one.  Each company must make a strategic decision based on a number of factors, including management’s appetite for resolution, the need to set a precedent and make a statement for larger business purposes, and the not insignificant matter of whether insurance is involved.  If insurance is involved, then the decision to defend her settle has to extent been relinquished to the insurance company, which may not necessarily embrace a “defense to the death” philosophy.

Who’s Your (Claims) Gladys? Improving Claim Service

A recent survey in the publication Retail Week reports that the recession has prompted the creation of the hypersensitive consumer.  This affects insurance and claim adjusters in many ways.

Consumer expectations have risen at a time of increasing cynicism toward insurance companies and the financial sector.  Times are tough.  Policyholder dollars are scarce.  The insurance market is soft.  Investment yields are down. Buyers of insurance and claim services are price sensitive.  It’s those insurance companies and third-party claim administrators with exceptional service that can weather the economic storm.

A new book, “Who’s Your Gladys? How to Turn Even the Most Difficult Customer into your Biggest Fan” (AMACOM Books, New York, $22.95) may provide an excellent resource for claim adjusters and managers who want to deliver excellent customer service.  Admittedly, this book was not named necessarily with insurance or claims people in mind.  Nevertheless, the ideas contained in this book can be applied by claim professionals to improve their level of customer service toward policyholders, claimants, and other vital business partners and constituencies.  “Gladys” is an archetype, a term for any challenging and difficult customer.  I suspect that every claims professional has had many Gladys’ in their lives!

“Who’s Your Gladys?” is co-authored by Marilyn Suttle and Lori Jo Vest.  Both are trainers annex first in customer service.

Consider picking up a copy of “Who’s Your Gladys?”, reading it, and having your claim staff do the same!

“Junior Fees for Junior Lawyers?”

An interesting article appears in the latest issue of Business Week (August 24 & 31, 2009, p. 24) titled “Junior Fees for Junior Lawyers.”  Apparently some law firms are rethinking both their billing structures and their orientation and training programs for young associates.  Some firms, such as Howrey, put new law school graduates into a two-year training program that caps their rates at about $75 an hour and also limits the amount of hours they can bill their first and second years.  (They have also cut starting salaries from $160,000 to “only” $125,000.)  Drinker Biddle has apparently also launched such a program.

This may come as a welcome development to both insurance companies and corporate buyers of legal services who have long been fed up with paying $200 an hour or more for “baby lawyers” to learn on-the-job while handling an assignment, perhaps handling it inefficiently.

Of course, one swallow does not make a spring; two law firms does not make a trend, but in an era of tightening belts and budgets, insurance companies and corporate buyers of legal services (like risk managers) may applaud such nascent developments and encourage their own firms to consider the same.

“Junior fees for junior lawyers?”  What a radical idea!

“Due to an unusually high call volume …”

What a bunch of BS!

I’m always skeptical when I call any business number and I get a recording telling me that my wait time is going to be prolonged because of an “unusually high call volume.” Sure!! Call me a skeptic. Especially, when you call in and every time the default mode is a recording talking about “an unusually high call volume.”

(Dude, if you always have a high call volume it’s not unusual!)

Methinks this is simply a way to hold off customers. It’s cheaper to make customers camp on hold that it is to hire adequate staff to man the phones. Just like commercial airlines. It’s easier to tell passengers to show up at the airport 90 minutes ahead of time than it is to hire sufficient customer service people to process tickets, luggage, etc. It’s all about them saving money, not about customer service.

Take a look at your own claim office or operation. Are callers met with a recording? Does the recording set them up for anticipated delays by referring to “an unusually high call volume?”

What message does that send about your commitment to customer service?