When A Career Turns Into A Life Sentence

This is a question we hear a lot from agencies, large and small. What should our role be in claims? What kind of employee should we assign, clerical or technical? Are claims best handled by an individual (or a segregated department in large firms) for an agency or by the same folks who handle other service issues for the clients?

How Important is Claims Anyway?

I get my insurance from an agent for one reason and one reason only – because he has convinced me that he will act on my behalf in the event of a loss. Because I am in the industry, I review policies, but as a layman I don’t care if I ever see a policy as long as I am assured that “I am covered” by an agent I trust. I only need insurance to cover losses I may have, right??

So, to the customer, claims is THE MOST IMPORTANT REASON to be insured and to be insured with YOUR agency.

Now, considering that last sentence as fact, not conjecture, what kind of employee do you want handling claims, a friendly clerk who will basically take down all the information needed for an ACORD form and transmit it to the carrier, or an insurance expert who (also in a friendly and consultative mode) shepherds the client through the claim process?

A Claims Department – or Claims Managed by CSRs?

The answer to this question is not guess-work, conjecture or personal preference. The answer to this question is another question, “Do I have enough new claims occurring each day to keep a dedicated claim representative busy?” A busy claim representative is one who is BOTH opening and following up on claims on behalf of the customers of the agency. Assuming (on average) that a new claim takes between one-half hour and one hour to glean from the client, complete the appropriate input and/or forms and deliver to the carrier, opening four to five claims each day would consume approximately half a claim representative’s time. The other half of the day would be involved in PRO-ACTIVE follow-up with both client and carrier to assure that the claims are being handled appropriately, expediently and correctly. This could involve an open claim file (excluding long-tail, third-party and WC claims that may reside open in your system for years) of a hundred or more claims. A hundred open claims and opening four claims per day certainly defines a busy enough workload to occupy a claim representative full time. If your agency only handles one or two new claims per day and your claims are simple enough (i.e. glass) that most are closed immediately or within a week, you are best served managing claims within your service departments.

Pro-Active Claims Management – The Difference Between a GOOD agency and an Average Agency

If you accept the statement that a client is most interested in the service received from an agent in the event of a loss, then a GOOD agency is one that best provides claim service. Traditional claim service is termed MONITORING. The agency staff takes the client’s report, transmits it to the carrier and monitors the progress through communication from the client or carrier. When the claim is closed, the agency finds out after the fact and notes the closure in its file or system.

Since the normal consumer only rarely needs claim service, it becomes very stressful to him and the proper method of service that is best appreciated is that of SHEPHERDING. The best claims managers will walk the client through the process of starting a claim, follow-up with the client to make sure the company has contacted him and that the claim is proceeding expeditiously, handle an roadblocks that may arise as the claim progresses and verify that the claim has been closed and that the customer is as satisfied as he can be under the circumstances. Even if claims do not pay as much as the customer desires – even if claims are denied – the client must admit that the claim manager has done everything in his/her power to properly care for the client in the claim. Good management does not mean covering “uncovered” losses nor does it mean arguing with carriers when they are right but the customer wants a different result. Always do the right thing for the client and for the carrier based on the legitimacy of the loss. Shepherd the client!

So the issue of proactive claims management versus reactive claims management is a fair one whether you maintain a separate claim function/department or you integrate claims into customer service. Being busy is no reason not to take active care of client in his moment of greatest need (the claim).

Base your decision on the quality of claims handler on the question of how well you would like your mother to be handled in a claim (treat everyone that way). Would your subject your mother to the way claims are typically handled in your agency? If the answer is yes, you have the right form of claim management. If the answer is no, please consider a change in claim management methods and procedures. Select your claim manager from the best service oriented, skilled insurance technicians you can find. (S)he will be the primary determinant of a client’s loyalty to your agency after they experience the stress and procedure of a claim. Select your claim organizational approach by how many claims you handle. Remember, the claims job, like many other jobs, will expand to fill the allowable time (plus 10% to show the boss how busy the claim department is). Don’t be fooled by long hours and backlogs. Look, instead, to the numbers of claims opened, closed and managed every month and compare them to the number of hours available to manage those claims. If the numbers seem like it portrays a part-time job, it probably is – only you pay someone full time wages to manage it.