"From Backlogged to Brilliant:

Transform Your Claims Operation in Ten Steps"

In the fast-paced world of claims, backlog is more than just an annoyance—it's a critical bottleneck slowing down operations and frustrating staff.

Imagine a world where you transform your claims workflow, tackle backlogs, and supercharge your claim unit’s productivity and morale.

This scenario isn’t a fantasy. It’s an achievable reality.

Whether you work remotely, at a TPA, within a claim department, or for a corporate self-insured unit, these ten strategies will reduce inefficiencies and drive your claim department to peak performance.

1. Detect and Deter "Drifters."

One key step towards optimizing productivity is minimizing the time adjusters spend away from their desks. If you notice excessive wandering, often pejoratively referred to as "Floaters," it might indicate too little work or poor time management. Encouraging adjusters to stay desk-bound unless necessary, without micromanaging their every move, is a balance that's vital for maintaining both efficiency and morale.

Recognize that periodic breaks to walk around or venture outside help knowledge workers stay productive and recharge mental batteries. (Apple's co-founder Steve Jobs was famous for his walking meetings. Jobs believed that walking boosted his creativity and problem-solving.) Monitoring "floaters" does NOT mean turning the claim department into an Orwellian Surveillance State.

2. Go Digital, Stay Productive.

Embrace digital transformation within your claims processing. By converting paper documents to digital files, adjusters don't need to leave their desks to retrieve information. Digital formats for company claim procedures, lists of approved vendors, and policy forms ensure that everything an adjuster needs is just a click away, dramatically reducing time wasted on physical document retrieval. Caveat: Recognize that there is still a need for and tremendous benefit from person-to-person real-time contact. Encourage eliminating much digital back-and-forth by picking up the phone, dialing someone, and asking, "Can we talk?"

3. Stationary Success: Equip to Empower.

Equip each adjuster's workstation with all necessary tools and information to minimize the need for physical movement. Provide printer access, digital document retrieval systems, and comprehensive online resources. Each workstation should be a self-sufficient hub that enables adjusters to handle most tasks without stepping away.

Again, recognize the legitimate need for periodic breaks. These are not necessarily signs of slackers but help mentally and physically recharge to optimize the cognitive effort needed for successful claim-handling.

4. Provide Immediate Information Access.

Make all relevant information readily available at adjusters' fingertips. Scan in policy forms, endorsements, and reference materials. Upload them to your office's Intranet or claim handling system. Similarly, digitize statutes of limitations, state-specific claim handling practice regulations, and details on coverage for punitive damages to streamline analyses and decision-making processes.

5. Communicate with a Button-Click.

Improve communication efficiency by organizing contact lists and setting up speed dial for frequently called numbers. Doing so saves time and keeps adjusters focused on core tasks without disruptive searches for addresses, emails, or phone numbers.

6. Enable Desk-Based Documentation Access.

Let adjusters manage documentation directly from their desks. Provide dedicated printers for each workstation and use paperless filing systems that adjusters can access electronically. Documents should be printable, email-able, and manageable from the desk, ensuring seamless and efficient communication with insureds and coordination with attorneys or doctors.

7. Use Time-Tracking Technologies.

Employ technology to keep digital tabs on backlogs. By electronically tracking each document and task, managers can easily identify bottlenecks and uneven work distribution. This enables proactive workload management and ensures no adjuster is overwhelmed or idle.

8. Monitor and Balance Workloads for Better Outcomes.

Review and balance the distribution of files among adjusters regularly. This prevents inefficiency and ensures that all team members are productively engaged, with manageable workloads that optimize their potential without leading to burnout.

This tip doesn't mean every adjuster must have identical workloads. Savvy managers customize workloads to claim representatives based on a blend of their experience, expertise, specialization, work habits, and key client relations.

9. Harness Tech to Tackle Tasks.

Invest in technology that automates repetitive tasks, improves accuracy, and enhances overall claim efficiency. This accelerates claim processes and causes claim representatives to focus on more complex claim-handling tasks. The advent of large language models and generative AI will create new risks and opportunities for optimizing claim operations while retaining the needed human element (a topic for a future column).

10. Continually Monitor for Ongoing Improvement.

Monitor and review your claims processing workflows. This helps identify existing inefficiencies and fosters a culture of continuous improvement and adaptation in the face of evolving industry standards and technologies.

By implementing these strategies, your claims operation can improve its efficiency and transform its workflow into a productivity and effectiveness model in the insurance industry.

Accelerate Toward Excellence

Embracing these strategies heralds a new era of claims management. By optimizing each step of your department’s workflow, you not only minimize backlogs but also unlock unprecedented levels of efficiency and customer service. Imagine a department where every claim is smooth sailing and files close swiftly! Claim representatives feel empowered to perform at their best.

The preceding picture isn't a mere vision—it's an attainable reality. Adopt these practices and watch your claim operation strive toward excellence. Leave inefficiency in the past and step into a future where your claim processes set a new standard for success!

Kevin Quinley, CPCU, AIC, ARM, is the Principal at Quinley Risk Associates LLC. He has 47 years of claims experience and serves as a nationwide expert in over 150 cases in state and federal courts. He helps clients improve outcomes through expert evaluation and testimony in high-stakes insurance claim disputes. Kevin has written over 770 articles and ten books on claims, litigation, and risk management.

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"Decoding the Coverage Enigma:

A Deep Dive into Claims-Made Policies"

Reviewed by Kevin Quinley CPCU, AIC, ARM

Claims-Made Insurance - The Policy That Changed the Industry by Frederick J. Fisher, Wells Media Group Inc., 2024, 190 pp., $29.99 PB.

In his new book, "Claims-Made Insurance - The Policy That Changed the Industry," Frederick J. Fisher provides a comprehensive and engaging exploration of claims-made insurance policies.

This compact yet thorough book is not just a guide but a treasure trove of practical knowledge for brokers, agents, underwriters, and claim adjusters. It offers valuable insights into the evolution and impact of these policies on the coverage landscape, empowering readers with a deep understanding of the subject and practical applications in their professional roles. Fisher's comprehensive analysis ensures that readers are well-informed and knowledgeable about claims-made policies, instilling a sense of confidence in their understanding.

(Full disclosure: I know Fred Fisher. I consider him a professional colleague, if not a friend. However, these ties do not bias me toward or against the book’s conclusions and analysis.)

Fisher expertly traces the historical development of claims-made policies, starting with their 1960s innovation to solve the "long tail problem" inherent in occurrence-based policies. This historical perspective enlightens readers about the industry's evolution, making them feel more aware and enlightened, and better equipped to navigate the current insurance landscape. He skillfully explains how these policies aimed to provide greater actuarial certainty for insurance companies and policyholders.

His deep industry knowledge shines as he examines the expansion of claims-made policies beyond professional liability and into other areas, leading to the emergence of two distinct branches with different triggers.

One of the book's strengths lies in its exploration of the complexities arising in claims-made policies over time. Fisher delves into the early challenges of defining a "claim" and how multiple conditions are now requisites for coverage. He astutely points out an irony: while claims-made policies initially aimed to simplify coverage determinations, adding myriad clauses and requirements, leading to increasing complexity, nearly rivaling the intricacies of occurrence policies.

Throughout the book, Fisher underscores the pivotal role of insurance brokers in not just selling policies but ensuring that policyholders thoroughly grasp the nuances and potential pitfalls of claims-made coverage. He provides practical checklists and advice for brokers and policyholders to avoid coverage gaps and denials, equipping them with the necessary tools to navigate the complexities of claims-made insurance. This aspect makes the book an indispensable risk management resource.

Fisher's engaging writing style reveals a sardonic sense of humor that subtly permeates the text, making what could be a dry subject rivaling Ambien, accessible and entertaining. This may be one of the most well-written insurance books I have ever read, striking a perfect balance between informative content and engaging prose.

Fisher doesn't shy away from critiquing certain industry trends, including the shift towards profit-oriented practices that can degrade insurance's original intent as a means of shared protection. While maintaining a balanced perspective, Fisher advocates for policyholder rights and broker vigilance without being dogmatic.

"Claims-Made Insurance" is not just for industry veterans; it also serves as an excellent primer for newcomers to the field. Kudos to the publisher, Wells Media Group, for the book’s reader-friendly format, with double-spaced pages and generous margins, enhancing readability. However, adding an Index or Glossary would have been a welcome enhancement.

Fisher's wealth of information and insights is so compelling that readers may find themselves highlighting passage after passage. I found myself highlighting the pages so much that, when I finished, the book looked like it had a case of jaundice. This underscores the book's value and the abundance of practical content.

Fred Fisher's "Claims-Made Insurance” is a must-read for anyone involved in professional liability insurance. It offers a wealth of knowledge, practical advice, and historical context that will prove invaluable in navigating the complexities of claims-made policies. This book significantly contributes to insurance literature, fostering greater understanding and transparency in an ever-evolving industry.

Fisher's "Claims-Made Insurance" is more than just a book—it's a vital tool for navigating the complex world of modern insurance. Whether you're a seasoned professional or new to the industry, it offers invaluable insights that could prevent costly mistakes and enhance your understanding of claims-made policies.

Don't wait for a coverage dispute to learn these lessons the hard way. Get your copy today. Arm yourself with the knowledge to protect yourself, your clients and your business in today’s ever-evolving insurance landscape.

January 20, 2024

"From Vesuvio's Ashes: Understanding Insurance Through `The Sopranos'"

January 20, 2024/ Kevin Quinley

As is often the case, I was late to the game.

When my sons were teenagers and buzzing about "The Sopranos," urging me to watch the HBO show, the series was more than halfway past its lifespan. I started watching but missed earlier episodes and much of the backstory. During the recent December holidays, HBO launched a "Sopranos" marathon. December 2023 marked the 25th anniversary of the successful launch of that TV series.

"Sopranos" redux nudged me to stream HBO Max and start watching the entire series from scratch, starting with Season One, Episode One. As an insurance guy specializing in claims and now an expert witness, I could not help but notice the subplot of insurance recovery woven into the early episodes of Season One.

"The Sopranos" is a masterclass in storytelling and character development. Less recognized is that it is also a case study in insurance, particularly in business interruption. An early, pivotal storyline revolves around the burning of "Vesuvio," Artie Bucco's popular Italian restaurant patronized by Tony Soprano and his compadres. An unfortunate conflagration (firebombing by Sylvio, perhaps?) and its aftermath offer context for examining how the popular media depicts insurance companies and lessons consumers can take from such portrayals.

In "The Sopranos," the Vesuvio's burning is initially framed as a tragic accident. But as the plot unfolds, it becomes evident that the fire—a total loss to Artie--was a calculated act of arson designed to prevent a mob meeting at the restaurant. This plot twist introduces a peek into the world of insurance claim investigations after a disaster.

A key episode theme highlights that insurance does not cover all losses. There is no "full coverage" despite the frequency of consumers invoking that phrase. Characters in the episode often comment on how insurance fails to compensate for the loss of customers. (Some forms of business interruption do indemnify for loss of customers.)

Uncertainty over insurance recovery is a massive frustration for Artie Bucco, who faces the physical loss of his restaurant and the daunting task of rebuilding and restoring his loyal customer base. His angst highlights a critical aspect of insurance coverage – the distinction between tangible and intangible losses. While insurance policies can cover the cost of physical damage and, in some cases, lost revenue during a shutdown, they often do not directly address the challenge of regaining lost clientele.

"The Sopranos" also delves into the skepticism surrounding insurance payouts. Characters express cynicism about the willingness of insurance companies to pay claims, a sentiment echoed in the real world. The storyline further fuels skepticism when the insurance company hires a second arson investigator to probe the fire's cause and origin. While retaining a cause and origin investigator is routine in suspicious fire cases, this action is depicted as an insurance carrier's stalling tactic, reinforcing a narrative of distrust towards these institutions.

Even so, the reality of insurance, particularly in the context of business interruption, is more nuanced than "The Sopranos" portrays. Business interruption insurance aims to cover not just the costs of rebuilding a business but may also offset revenue lost during a closure period and potentially defray expenses in regaining a customer base post-reopening. It's a critical safety net for business owners, ensuring that a disaster like fire does not bring financial ruin.

The gap between the fictional portrayal and the actual workings of insurance raises several lessons for consumers:

1. Understand Your Coverage: It's vital for business owners to thoroughly understand what their insurance policies cover and what they don't. Understanding your coverage includes knowing the extent of coverage for tangible damage, business interruption, and additional customer loss and recovery clauses. The insurance claim business has a frequently cited abbreviation, RTFP. Roughly translated for a PG-rated audience, it means "Read the Freakin' Policy." Most people don't until loss occurs. At that point, it's too late.

2. Documentation is Vital: In the event of a claim, having comprehensive documentation of losses, expenses, and revenue streams—both pre- and post-incident—can significantly streamline the claims process and ensure fair compensation.

3. Expect Insurer Investigations: Insurance investigations are standard, especially in suspected arson cases. Understanding this process and cooperating fully can expedite the claims process.

4. Manage Expectations: Insurance aims to mitigate financial loss but is not a panacea for all challenges following a disaster. Business owners should have realistic expectations and strategies for rebuilding their customer base independently.

While "The Sopranos" provides an engaging, dramatized view of a business disaster's aftermath, consumers and business owners must separate fiction from reality. Understanding the nuances of insurance coverage, preparing adequately for potential disasters, and maintaining realistic expectations about the role of insurance in recovery are crucial steps in safeguarding the financial stability of any business. As we learn from Artie Bucco's experience, being well-informed and prepared can make a huge difference in navigating the challenging aftermath of business interruption.

As we bow to "The Sopranos" gritty drama of Season One, it's clear that the line between fiction and reality in insurance is as blurred as the moral compasses of Tony Soprano's crew. While we may not find ourselves in mobster-level drama, the lessons on insurance coverage, claim-handling, and the importance of being prepared are universally applicable.

So, remember, just like a good episode of "The Sopranos," the insurance world presents unexpected twists and turns. Stay informed. Be patient and realistic. Work with an experienced insurance agent. Read your policy, and maybe—just maybe--you'll be better prepared than Artie Bucco.

As Tony Soprano might say, "With all due respect, you don't wanna' end up like a fish out of water when disaster strikes."

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