How do you know if your claims organization is producing aquality product? After all, there are numerous ways to identifyquality, right? While no two carriers or claims processes arealike, there are often similarities. From the first notice of loss(FNOL) abandonment rate and contact timeliness to cycle time andaverage indemnity, there seems to be no shortage of usable metrics.But is this the optimal way to gauge performance?

During my years as a process and quality director for a largemultinational insurer, we grappled with a myriad of metrics in ourquest to find the ideal formula behind quality. Much like afootball team, the claims organization was measured on statisticaldata points that were supposed to be indicative of outcomes. Justas a lot of points should win football games, prompt contact andinspections should win the claims race.

So what happens when all of those metrics are surpassed, yetthere is a rise in blown coverage, errant liability decisions, orlitigation? While I am not minimizing the importance of statisticalclaims data points, I do like to put them into perspective. Justlike football, there is only one statistic that truly matters. Yourwins and losses are based upon accurate outcomes.

When designing a quality assurance process, placing emphasis onultimate outcomes takes into consideration all else. Componentssuch as timely contacts and inspections, accurate coverage andliability decisions, effective negotiations, and recoveryopportunities are all addressed under the broad heading ofaccuracy.

In our situation, we moved from a multitude of metrics thatseemingly encompassed every conceivable aspect of the claimsprocess to one of overall file quality. In the former model, solittle emphasis was placed on any singular data point that verylittle was a priority. For example, if subrogationidentification is 2 percent of an annual evaluation, how muchemphasis will be placed on identification and referral? Tothe contrary, in a total quality model missed subrogation mayresult in a file not meeting expectations. If the cumulative totalquality score supplants the individual metrics, then the paradigmof the organization will change from chasing numbers to chasingresults.

To emphasize accuracy, certain key milestones should beaddressed during the evaluation process. At a minimum, this shouldinclude data compliance, coverage, liability, investigations,subrogation, salvage, timeliness and accuracy. Within eachmilestone there should be a subset of data that is measured todetermine if a file is worthy of replication, or reproduction. Whenthis occurs, a file may be deemed to meetexpectations.

It is also important to re-emphasize exactly what constitutes anacceptable work product and calibrate the organization so thateveryone from the executives to the rank and file employees are onthe same page. Doing what should be done in a file, consistently,timely and accurately, is precisely what should be defined asmeeting expectations. Nothing more, nothing less.

To exceed expectations, one must go above and beyond the call ofduty. Calling someone in 7 hours versus the 8-hour requirementhardly constitutes exceptional work. Rather, a person must take theinitiative to think outside the box, dig deeper and farther andturn up critical pieces of information that alter the outcome ofwhat a standard claim investigation would have done. It can bedone; it is the exception.

As I discuss in “Re-Adjusted: 20 Essential Rules To Take YourClaims Organization From Ordinary to Extraordinary,” using one keymetric, that of total quality, can fundamentally transform anyteam. It will move from reactive to proactive an entire workflowthat will expose inefficiencies that can be remediated, resultingin continual process improvement to ostensibly offer adherents asignificant competitive edge in the marketplace.