Chief claims officers with leading property/casualty insurers ranked workforce management as their top claim-related challenge, with 76 percent identifying it as a top-three business issue in a new P&C Claim Officer Survey conducted by global professional services company Towers Watson.
More than half of the 41 survey respondents listed achieving financial results (54 percent) and effectively integrating and leveraging technology innovations (54 percent) as their next most pressing concerns.
Two-thirds said attracting and developing critical-skill workers was their top claim workforce challenge, while 59 percent cited maintaining employee morale as their next biggest challenge.
“Insurers are responding to this dynamic in a number of different ways, most notably by revising claim processes, modifying job functions and leveraging technology innovations, where feasible,” said Brian Stoll, director of the P/C practice at Towers Watson.
Respondents reported a number of benefits achieved from claim technology innovations, such as leveraged automation to revise claim processes (68 percent) and improved execution of best practices using operational metrics (61 percent).
“Experienced and effective claim personnel are critical both to the organization’s financial success and franchise value to policy owners. This underlines the importance of providing market-competitive total rewards, ongoing development opportunities and a compelling value proposition to attract and keep the best performers,” said John Gayley, director and North American insurance industry leader for executive compensation at Towers Watson.
Claim Operation Management
Almost all carriers indicated they handle more than three-quarters of their claims internally, and 71 percent said more than half of their claim staff began their development and training at other carriers while using different claim management practices.
Seventy-one percent reported that their employees receive a minimum of 20-40 hours of formal claim training per year, and 95 percent of adjusters receive ongoing formal claim training, although 26 percent of their direct supervisors and managers receive no ongoing formal training.
“Mandatory training exercises for all supervisors and managers can improve claim handling, elevate performance and help new supervisors acquire necessary skill sets and competencies,” said Frank Ramsay, North American claim management practice lead at Towers Watson.
Even as respondents identified supervisors as critical in delivering superior claim results, the survey revealed that 27 percent of supervisors spend more than four hours a day reviewing their direct reports’ files.
“Carriers need to ensure better claim governance, with appropriate oversight levels of frontline claim handling, so their supervisors spend more time on what’s most important to the company,” continued Ramsay.
Most companies administer some form of claim quality assurance every four months, on average. However, only 49 percent hold formal meetings with all claim staff to discuss the results.
When it comes to litigation management, two-thirds of the insurers hire panel counsel for 100 percent of their litigated claims, with one-third utilizing a mix of staff lawyers and panel counsel. When asked how they handle specific litigation approaches, 64 percent of carriers said they typically assign their staff lawyers the liability cases and routine (non-conflict) cases, while the same percentage said panel counsel usually take on conflict cases and more complex, specialized litigation. (Respondents could select all that apply.)
Carriers disagree on whether a claim should be reassigned when it enters the litigation phase: 39 percent have their current claim adjuster continue to manage the file; 32 percent refer new suits to a claim litigation specialist; and one-fifth transfer control of the claim to defense counsel while maintaining adjuster oversight.
Claim handlers maintain responsibility for most activities on litigated files, although companies commonly share responsibility with defense counsel for case resolution and negotiation, as well as developing and setting strategy. Claim handlers often allow defense counsel to take the lead in developing the legal budget for individual claims.
Carriers also take varied approaches in evaluating the success of their litigation management. Insurers most commonly (71 percent) measure performance by comparing legal expenses across defense firms and over time. Nearly one-third said compliance and execution best practices are the most important factors in evaluating claim staff performance. Forty-nine percent rely on average loss plus expense as the primary factor to measure litigation results. Other companies track expense on litigated claims (22 percent) and loss per litigated claim (15 percent) separately.