Stephen A. Cozen’s reputation precedes him. Indeed, you’ve likely noticed his name plastered in news reports about the distribution of the $20 billion BP compensation fund. However, the founder and chairman of the Cozen O’Connor law firm garnered acclaim long before the mere mention of the Deepwater Horizon disaster aroused sadness, derision and inflamed tempers at dinner tables, offices and courtrooms across the globe.
Considering his impressive track record in catastrophe litigation, including multi-billion dollar reinsurance and coverage claims arising from the Sept. 11, 2001 World Trade Center attacks and the meltdown at Three Mile Island in 1979, he immediately commanded attendees’ rapt attention during his keynote address, which kicked off the conference. While exploring recent catastrophes that have befallen the U.S. and their impact on the P&C insurance front, Cozen also spoke to catastrophes in a broader global context, focusing on the Fukushima Daiichi power plant accident.
“The crisis at the Fukushima plant in Japan definitely has potential ramifications for the U.S.,” he said. “The earthquake that struck in March was more powerful than the 1995 quake that rattled Kobe. As a result, Tokyo is now 9 inches closer to the Pacific Ocean. One immediately thinks of the nuclear power plants in California that lie perilously close to fault lines.”
When applying lessons gleaned from the Three Mile Island disaster litigation to the ongoing crisis at the Fukushima plant, Cozen offered sobering statistics:
“The meltdown at Three Mile Island was rated a ‘Level 5’ on the International Nuclear and Radiological Event Scale (INES),” he said. “For comparison purposes, the Fukushima accident has been rated ‘Level 7.’ To date, the only other nuclear accident to share the Level 7 rating is Chernobyl.”
Among other topics covered were the proliferation of Chinese drywall claims and how Courts today appear “poised to reject litigation that could impose ruinous liability on every business in the country.”
Of course, an afternoon with the illustrious attorney would not have been complete without delving into some prickly questions and misnomers, namely those concerning the BP compensation fund and villification of Feinberg. So before bidding adieu to the Big Easy, Cozen spoke with us about all of that and, yes, lobsters. (Be sure to visit PropertyCasualty360.com to read his conversation with Christina Bramlet).
Fraud Detection Snapshot
Speaking of openers, John Sargent, director of MetLife’s SIU, explored fraud prevention technology, from development to implementation, in the first session of the fraud/technology track. Sargent presented screenshots of what his company’s data analysts see every day, explaining how they can accurately interpret the massive data acquired through a streamlined system now in place.
The claims are carefully assigned scores; the higher the value, the greater likelihood of the claim being fraudulent. Additionally, certain characteristics may have different values depending on the state in which the claimant resides.
“A pedestrian injured in Manhattan has a higher probability of fraud than many other places, for example,” Sargent explained. “The system allows us to change those thresholds as needed.”
Other claim characteristics that are considered include whether a police report was filed, when the customer’s policy was established, how long it took to report the claim, whether any deaths or serious injuries were involved and if the accident was a hit-and-run, among others.
“A lot of useful data can be found in the diary notes,” Sargent said. “We have used that information to build in words and catchphrases that might increase the score and thereby enable us to identify more suspicious claims.” That means fewer losses and more discouraged scammers.
“We continue to hone the product to make sure we’re looking at the right claims,” Sargent said.
Passing the Torch
Following a special ceremony honoring Bob Khosropur, the 2011 Claims Professional of the Year, and two informative sessions, Karen Furtado of Strategy Meets Action (SMA) engaged attendees to the very end, presenting a detailed overview of how to use claims technology platforms and fresh strategies to achieve real innovation.