More than three-fourths (76 percent) of P&C insurers’ chief claim officers rank workforce management as their top claim-related challenge. It was identified along with achieving financial results (54 percent), and effectively integrating and leveraging technology innovations (54 percent) as a top three business issue in a new P&C Claim Officer Survey conducted by Towers Watson.
Two-thirds also said attracting and developing critical-skill workers is 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, where feasible,” said Brian Stoll, director, P&C practice, 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).
Almost all carriers (93 percent) indicated they handle more than three-quarters of their claims internally. Yet in today’s transient claim staff environment, 71 percent said over half their claim staff began their development and training at other carriers while using different claim management practices. “This poses a true test for claim functions and requires additional training for new hires,” said Frank Ramsay, North American claim management practice lead, Towers Watson.
Seventy-one percent reported that their employees receive a minimum of 20 to 40 hours of formal claim training per year, and 95 percent of adjusters receive ongoing formal claim training, although, Towers Watson noted with surprise that more than one-quarter (26 percent) of their direct supervisors and managers receive no ongoing formal training.
Even as respondents identified supervisors as critical in delivering superior claim results, the survey revealed that just over one-quarter (27 percent) of supervisors spend over four hours a day reviewing their direct reports’ files, and across the entire group, average 2.7 hours a day doing so. “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 (95 percent) administer some form of claim quality assurance every four months, on average. However, less than half (49 percent) hold formal meetings with all claim staff to discuss the results and plans to act on them.
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. Carriers disagree, however, on whether a claim should be reassigned when it enters the litigation phase. Thirty-nine 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.
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 (30 percent) said compliance and execution best practices are the most important factors in evaluating claim staff performance. Almost half (49 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.
Forty-one chief claim officers participated in the survey, which ran from June 4 through July 18, 2013. Respondents represent a cross section of small, midsize and large carriers, according to Towers Watson.
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