The looming talent shortfall as more and more tenured claims professionals retire is affecting all claims administration services, such as the high-level property appraisers who work for independent adjusters (IAs), litigation specialists, and specialty claims handlers like those who manage professional liability claims.
Some companies have been more aggressive than others in trying to backfill these soon-to-be vacant positions, while others seem to have buried their heads in the sand.
While performing claims audits it has become apparent that there are numerous areas claims administrators should address to improve their service and the outcomes. A general decline in the quality of supervision in many of the claims reviewed means that adjusters’ shortcomings are not being appropriately handled.
The areas to address will not only provide adjusters and supervisors with additional expertise, but will also improve their efficiency so they will spend less time on administrative work and more time on critical work. There are four key areas that training, both formal and informal, can address.
1. Improving adjusters’ general performance.
Much of today's emphasis by insurers, third-party administrators, and self-administered programs focuses on “best practices,” the amalgamation of activities that insurers and third-party administrators have found can provide a measure of confidence for their clients that they are on top of these claims. For example, insurers/third-party administrators will emphasize timely three-point contact on Workers’ Compensation claims or timely two-point contact on Liability claims that give clients the sense that claims are being managed proactively. It can be measured simply by capturing the date these contacts were made, calculating the gap between the date the insurer/third-party administrator received or assigned the claim to an adjuster, and showing that they are making timely contact. Sometimes this initial contact is done strictly to comply with the contact requirements, and little of substance is discovered or discussed.
Many adjusters can make high scores on their internal claims audits by meeting the requirements of the best practices guidelines, while their overall claims management quality is low. This occurs because there is often little focus on the outcomes. Adjusters may complete the required steps and gather useful information, but may not develop a meaningful action plan to resolve the claim.
There is nothing wrong with documenting best practices, however, when the adjuster is not trained for the next level — e.g., investigating a claim, analyzing claims and the factors that affect the outcomes, developing meaningful action plans and effective strategies, researching case law, and preparing reasonable settlement ranges and reserves, the outcomes will come up short.
2. Improving supervisors’ general performance.
Supervisors arrive at that position after a successful tenure as an adjuster. However, some have never been trained on how to properly supervise and effectively guide adjusters and they may also fall prey to the problems of best practices by focusing on activities instead of meaningful supervision. They may be required to perform an initial supervisory review at 10, 15 or 30 days, with periodic reviews every X days thereafter. In some cases, supervisory comments in claim file audits are limited to “reviewed claim” or “reserves OK” or similar comments with no real supervisory comments or direction.
This means these supervisors have not received appropriate training, and their ongoing performance has not been evaluated to ensure they provide guidance to the adjusters for whom they are responsible.
3. Broadening knowledge.
One of the steps that many insurers or third-party administrators have taken is to limit their adjusters to just one line of insurance. While this makes sense from an expertise and efficiency perspective, it may leave the adjusters without the knowledge necessary to make other important decisions. For example, a Workers’ Compensation adjuster who has had no exposure to General Liability claims may not identify or properly investigate incidents in which a third party might be liable and responsible for reimbursement.
4. Improved time and work management.
While auditing claims it becomes apparent that many adjusters and supervisors are not yet efficient in managing their time and work product. Part of this may be because of an incomplete understanding of the features of the claims system they are using or a fear of relying on the system. Also, some of the adjusters and supervisors have not yet developed an effective schedule for performing their daily tasks. Since part of their ongoing work is to talk with their clients, employees, claimants, medical providers, attorneys and others, they may react by immediately accepting all incoming phone calls, even when they interrupt the flow of work that must be done.
Both formal and informal training are needed. Informal training is the instruction that should arise through a supervisory review or audit in the hierarchy shown in Illustration 1. Informal training is simply the direction that should be taken to continue job performance improvement. (Click graphic to enlarge.)
Formal training may take several forms. The following chart lists a few that may improve adjusters’ or supervisors’ performance, broaden their knowledge, and help them more effectively manage their work loads. Many of the resources are already available through internal personnel or defense counsel, while others may include vendors with whom the company already has a relationship.
It is critical for insurers, third-party administrators, and self-administered programs to provide high-quality claims management, and training is a necessary factor. Claims training should not only include the necessary components of identifying best practices, but should also include those for saving time and working smart so there are cost-effective outcomes. (Click graphic to enlarge.)
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