At many property and casualty companies, structured settlementshave gained a solid following. Yet, many claim professionals stillhesitate to incorporate them into negotiations. This shuts off aviable settlement option, as an outside structured settlementconsultant is, essentially, a free resource to help settle opencases.

Some of this hesitancy probably stems from a misunderstanding ofstructured settlements' role in the claim process. Typically, theyare not substitutes for cash settlements, although there areexceptions. Rather, a structured settlement is most effective whenused as a complement to cash, a replacement for that part of thesettlement designed to compensate future needs.

For a casualty company, the greatest appeal of a structuredsettlement is the bottom-line impact. Because federal law allowsclaimants to take advantage of the time value of money tax-free, astructured settlement offers significant additional benefits overcash. By casting settlement discussions in terms of meetingspecific future needs, a structured settlement approach helps focusattention on appropriate compensation, rather than on lump-sumdemands that may be arbitrary. For insurers, that could mean fasterclosure of claim files, lower administrative costs, savings onlegal bills, and, most significantly, reduced danger of runawayjuries.