Around the World in 80 Days. In today's world of high-speed transportation and electronic communication, such a long trip sounds sort of quaint. As the world continues to shrink, modern risk managers are finding new and creative ways to deal with worldwide risk exposures, and claim service providers are being challenged to develop new and better communications, processes, and networks to meet their needs.
Continued globalization has increased the number of companies that need help managing their claims on an international scale. Such opportunities also have increased because many international corporations have chosen or had to accept huge self-insured retentions and deductibles due to insurers' reluctance to continue providing coverage at lower levels, and a significant increase in commercial line premiums.
Although global programs fall into several categories, they still can be considered either traditional field expertise and loss adjusting, or global claim administration.
In addition, the definition of global remains open to discussion. Many corporations view global risk management as everything outside their home countries, and will adopt at least two separate programs to handle home and foreign risk and claim management. Others see the world as one insurance market, but they are in the minority. The majority of companies fall somewhere in between, and develop insurance and risk management strategies that mirror their international management structures. Whichever approach is preferred, effective global risk management requires clear communication and centralized control.
Although insurance has been worldwide since its inception, national and regional differences developed in response to society's needs, court review, and economic concerns. For instance, BI can mean bodily injury in one country and business interruption in another. Or a motor car program in one country must be compared with an auto physical damage program in another. Coverage forms vary from country to country, and manuscript policies often are used. As a result, agreeing on the language of insurance is the first consideration when helping a risk manager create a global package.
Creating a central clearinghouse for claim intake, distribution, and reporting helps overcome these issues and ensure understanding among all parties. For example, GAB Robins, a worldwide claim service firm, has established a Global Business Unit to fulfill this function and to provide clients with consistency of service, assistance in locating the appropriate claim professionals, and compliance with specialized instructions.
The unit employs several steps to accomplish these objectives. Claim or risk managers establish guidelines and claim-handling specifications with GAB Robins account managers. These requirements are entered into a global contact database to ensure that the most up-to-date claim-handling information is available throughout the company's global network.
The GBU maintains a skill database to help identify the appropriate loss adjuster and assign the claim when a loss occurs. Adjusters receive coverage information in the appropriate languages, and both clients and adjusters receive ongoing support from local or global account management, depending upon the way the account is set up.
Throughout the process, the adjuster uses the detailed claim-handling information maintained by the GBU. He also remains in constant contact with the GBU to ensure that clients receive the highest quality results. Once the claim is completed, the adjuster reports to the client and verifies that all service standards were met. The GBU then coordinates with the client to obtain feedback and address any issues that may remain unresolved.
No matter what specific processes that a provider uses to achieve centralized control, the key to success for risk managers is obtaining consistent service worldwide.
Diverse Personnel
Managing professional staff with diverse backgrounds is another challenge of providing global claim management. Some countries allow direct employment of in-country staff, while others prohibit foreign ownership. In response to these complex personnel issues, some worldwide adjusting organizations form partnerships with local firms to obtain the necessary personnel. Others recruit, hire, and train their own teams. Each approach has challenges, and both require strict oversight as a breakdown in personnel management may lead to loss of key staff, an inability to provide worldwide adjusting services, or poor results.
To create its worldwide network, GAB Robins used a combination of both approaches, maintaining subsidiaries in certain countries and working with well established local firms in others. The company ensures consistent and quality service by maintaining centralized control, providing ongoing support to adjusting resources, and using technology to help combine the speed and accuracy of a local response with a broader global perspective.
Regardless of the staffing approach, clients expect consistent service and expertise no matter where in the world a loss might occur. When a catastrophe strikes, there still is no substitute for on-site handling and, as evidenced by recent events in Asia, adjusting firms must have professionals and teams available to respond immediately in all corners of the world.
A critical piece of the global puzzle is technology, which solves timeliness, currency, and communication problems, if managed correctly. Although lashing together a fractured network of systems and platforms does not provide the seamless environment that global clients require, it is not easy to create a single platform that allows for varying coverages, language, and currency differences, as well as nuances of specific countries.
Fortunately, due to continued developments in technology, companies now are able to electronically collect claim information and make it accessible to claim and risk managers around the clock. For example, GAB Robins' adjusters post claim information to Web-accessible databases of electronic files called Global-Claims. As a result, all approved parties worldwide (brokers, captives, carriers, claim management) are able to view activities, reports, and photographs related to a particular global account file at any time, whether the claim is open or closed. In addition, Global-Claims allows any number of adjusters in different countries to work on a claim simultaneously.
GAB Robins also uses a Web-based tool to collect data on clients' global third party administration programs and to notify appropriate personnel about sensitive or high-value claims. Consolidated data from such programs enables risk and captive managers to identify weaknesses and strengths in their processes and to take action to minimize losses or pursue recoveries.
From language and cultural differences to personnel and technology issues, meeting the high expectations of global clients can be complex and demanding for claim service providers. Yet, as more and more companies expand their presences in the global marketplace, the need for worldwide services continues to grow. As a result, a world of opportunity exists for loss adjusting and claim administration firms that can meet the challenges of global claim management successfully.
Elise M. Farnham, CPCU, AIM, ARM, CPIW, is a national account executive for GAB Robins.
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