If negotiation is the job, as Ronald Morrison wrote in the first article of this series, then the first offer is often the moment that defines success.
Executive Summary
Concert Group's Ken Carter explains the concept of anchoring science and why it matters in claims."The first offer is what gives you room to move strategically. A well-reasoned opening creates context for concessions later, allows you to demonstrate flexibility and keeps the conversation within a range you define. It shifts you from passively reactive to a position of leadership and influence," he writes.
The article is the second installment of a multipart educational series, "Negotiation Reclaimed," conceived by Guest Editor Taylor Smith, founder and president of Suite 200 Solutions.
Smith introduced the idea in his recent CM article, Taking Back Negotiation: Why Claim Professionals Must Lead the Next Chapter
Read Part 1: Negotiation Is the Job: Reframing Defense Work in an AI-Enhanced Era
Behavioral economists Daniel Kahneman and Amos Tversky first described the anchoring effect in 1974—the tendency for initial numbers to pull subsequent judgments toward them, even when the starting point is arbitrary.
In insurance negotiations, this bias is not theoretical. It’s the gravitational force that shapes every later discussion about value, reasonableness and fairness.
Every demand letter or opening offer is an anchor. It establishes a frame: what’s “high,” what’s “low,” what’s “reasonable.” Once that frame exists, even seasoned professionals unconsciously adjust around it. That’s why skilled negotiators try to control that frame early. Whoever sets the first credible number usually sets the boundaries for the eventual outcome.
The plaintiff bar has understood this for years. Their opening demands are not just numbers—they are narratives designed to define the story of loss and responsibility before the defense even speaks. Too often, defense teams start reactively, allowing the plaintiff’s anchor to define the playing field.
It’s time to reclaim that space.
Why Going First Usually Wins
If you’ve been in claims long enough, you’ve heard it or said it yourself: “Let’s ask them for a demand, then maybe propose mediation.”
It sounds prudent. It feels safe. Waiting seems like a way to preserve flexibility and avoid revealing our hand too soon. But in negotiation science, this instinct to wait and react is often a costly illusion.
Study after study—across corporate dealmaking, salary negotiation and litigation settlement—confirms that the first credible offer creates psychological inertia. Once a number is stated, every subsequent discussion, every compromise, every justification revolves around it. Even experienced negotiators adjust toward that first figure more than they realize.
