From the March-22, 2010 issue of National Underwriter Property & Casualty • Subscribe!

Tech Can Help Mitigate Claim Adjuster Retirements

Many baby boomers remember the Pete Seeger song that became an anthem of the 1960s peace movement, "Where Have All the Flowers Gone." Unless insurance executives take steps today to address the inevitable future talent crunch, they might as well dust off their old Peter, Paul and Mary albums and start singing, "Where Have All the Young Adjusters Gone/Gone to Retirement, Everyone."

Every insurance carrier is facing the reality of a shortage of talented, experienced workers as the nation's 79 million baby boomers reach retirement age. It is widely estimated that up to 30 percent of claims adjusters leave carriers every year. The result is a dearth of experienced adjusters, who traditionally brought new recruits up to speed in the complex world of claims processing.

While recent economic events have slowed the retirement pace somewhat, with senior adjusting talent postponing retirement, it will not be sufficient to stem the tide of losing talent.

Capturing the accumulated wisdom of veteran claim professionals is a competitive necessity. By deploying technologies such as consensus modeling and knowledge base creation, insurers will gain more control over the process and achieve a higher level of consistency in managing claims successfully. The alternative--starting from scratch with a new generation of novice adjusters--relinquishes a priceless talent resource insurers have at their fingertips.

Insurers should consider a systematic approach that uses technology to capture experience as a best practice for managing claims. Consensus modeling and business process management engines are time-tested approaches that have proven highly successful as the best practices for managing claims.

A good solution has two key components:

o Workflow to systematically manage, streamline and capture critical information for decision-making in the claims process.

o A knowledge base that makes the carrier's unique practices and perspectives for evaluating claims available to all adjusters and managers.

Understanding the value of the knowledge base in and of itself, along with the methodology associated with populating this resource, is key.

The knowledge base should not be populated using empirical claims data whose correctness is completely dependent on the availability and accuracy of historic claims--remember, garbage in, garbage out.

Instead, populate your knowledge base using a series of detailed and carrier-specific consensus models, and you will have measurable and accurate results.

A consensus model produces a determination that is made with the full cooperation of all the members involved in the decision-making process. It allows the group to openly discuss a topic and collaboratively come to a group consensus.

Unlike a process that relies solely on majority rule, the consensus process invokes teamwork and reflects the views of the minority in the decision outcome. Open cooperation and interaction among participants enhances creativity and promotes fairness and accuracy.

This approach maximizes an experienced pool of a carrier's experts to solicit information about key data and factors that contribute to the evaluation of a claim.

The group of specialists is comprised of the carrier's seasoned experts--leveraging the same individuals who are the cornerstone of the industry, and whose transfer of domain expertise is imperative to a company's future success.

These well-seasoned professionals are most often the next wave of retirement candidates, offering a wealth of information that should not be lost.

Transferring their expertise into a consensus model and making it available online in the decision process to all levels of adjusters is much like having a virtual expert looking over your shoulder giving guidance and advice long after that talent has retired (you know, the one that always sees the critical factors when few others do).

There are two beneficial by-products of using a consensus model process. Number one, the outcome decisions of a consensus model are distinctive to each carrier, and secondly, the consensus modeling process fosters higher quality decisions and typically includes unique factors that not every expert might consider when handling a claim.

Newer, less-seasoned adjusters who will be on the front lines handling cases on a daily basis, but who tend to miss key components when evaluating a claim, will benefit the most from the consensus models. Implementing a customized knowledge base into the process flow for evaluating a claim will guide adjusters to consider, at a minimum, the key factors involved when handling a claim.

Consensus modeling and knowledge base development are ideal ways to capture and preserve company talent, particularly if you have reached an expertise level that gives you competitive advantage.

Companies can harvest their veterans' knowledge and best minds at a company with this approach to yield models they can incorporate into decision support guidelines. Integrating the knowledge base into workflow and role-based decision support tools enables the wisdom of the experts to guide the less experienced, creating a better state of consistency.

Insurers can transfer knowledge by capturing the best practices of seasoned experts and providing the process flow and content for current and future employees, mitigating the impact of the retiring baby boomer generation and proving a best-in-breed claims management solution.

Meanwhile, you can systematically address serious claim leakage from an inexperienced work force, and at the same time increase your adjusters' productivity by having each address the critical claim factors to make good decisions.

Tom McCarthy (Tom.McCarthy@mitchell.com) is executive vice president, and Randall Smith (Randall.Smith@mitchell.com) is director of Decision Analytics at Mitchell International in San Diego, Calif.

About the Author
Tom McCarthy

Tom McCarthy

Tom McCarthy is senior advisor for Mitchell International and founder of Mitchell Casualty Solutions. He may be reached at tom.mccarthy@mitchell.com, www.mitchell.com.

About the Author

Randall Smith

Randall L. Smith is an attorney at Cohn & Lambert in Cleveland, Texas, representing both insurers and insureds in coverage matters. Mr. Smith has many publications on various insurance matters.  He is the author of Duty to Defend: An Insurance Guide, published in 2000 by Texas Lawyer and is also a co-author of the The Texas Insurance Law Guide: Basic Solutions to Contemporary Liability Insurance Problems, published in 2008 by Texas Lawyer. His e-mail address is rsmith@cohnlambertlaw.com.

 

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Personal Lines Pro eNewsletter

Critical insights into the personal auto, homeowners, and other consumer insurance markets to help P&C professionals stay informed – FREE! Sign Up Now!

Advertisement. Closing in 15 seconds.