Claims Magazine - Recently, a California trial court entered a judgment in favor of the claim adjusters working for the Farmers Insurance Group in Los Angeles, agreeing that they were deprived of the right to overtime pay. The jury awarded the adjusters $91,000,000. The trial verdict followed an appellate decision called Bell v. Farmers Insurance Exchange, 87 Cal.App.4th 805, 105 Cal.Rptr.2d 59 (2001). The court of appeal stated: In short, the record as a whole confirms the accuracy of FIEs own description of the claim representatives responsibilities as being restricted to the routine and unimportant. On matters of relatively greater importance, they are engaged only in conveying information to their supervisors-again primarily a routine and unimportant role. This characterization of their role in the company places the plaintiffs in the sphere of rank and file production workers.
Thursday, November 15, 2001
Claims Magazine - Many claim executives struggle to communicate with their CEOs and CFOs on the performance of their organizations. The problem often is that senior executives, who are well trained in finance, lack a complete understanding of how the claim function impacts overall results. Claim VPs then encounter a dizzying series of short-term directives that they know will fail, while they struggle to explain why the orders from the corner office are not having the desired effect. When this happens to you, its time to fight back with a weapon that works: Financially based claim performance measurement, also known as a Balanced Claim Scorecard. Measurement is a critical component of any claim management system. Most claim managers recognize its vital role in communicating, motivating, and tracking the achievement of an organizations strategy.
Tuesday, November 13, 2001
Claims Magazine - What business issues affect claim operations the most? How does your contact time standard compare with others? What claim practices, processes, and customer service measures are most commonly tracked? How satisfied are claim executives with their companys claim practices and processes? The answers to these questions are contained in this first nationwide study of claim executives, mainly claim vice presidents, of insurance companies, larger independent adjusting firms, or third-party administrators. This study, conducted jointly by the American Institute for CPCU/Insurance Institute of Americas Center for Performance Improvement & Innovation and the Computer Science Corporation cost containment group, represents an important step in assessing industry claim practices, and vital issues affecting claim operations.
Tuesday, November 06, 2001
Claims Magazine - As any claim adjuster would be able to testify, U.S. workers are putting in the longest hours in the industrialized world, according to a recent International Labor Organization study. Nor would it surprise our readers to learn that, on average, U.S. employees spend nearly one week more on the job per year than they did a decade ago. Respondents to our salary survey consistently have cited that as their major job-related grievance, followed closely by the failure of their salaries to compensate for the longer and longer hours. Despite the years of complaints, the situation does not seem to be improving. “Id gladly forgo a raise in exchange for reducing my work week to 40 hours,” said a 29-year old adjuster from Wisconsin. A staff adjuster from Ohio concurred, adding that things are getting worse. “I have never seen so many adjusters so angry,” he said.
Tuesday, November 06, 2001
National Underwriter - Agents can protect their companies against potential fraud by being alert to a number of items that should raise a red flag, according to James Quiggle, director of communications for the Coalition Against Insurance Fraud in Washington. • Alarms should sound when an applicant walks into an agency looking for coverage on high-value articles and does not ask about the cost of the premium. • Look for lifestyle indicators. For example, a client looking to insure an expensive house, but driving a very old car or an applicant looking to insure expensive goods who has a job with a low pay scale. • Warning signs should go up for appraisals that are vague, misspelled or lacking photographs. There may also be a problem if the appraiser is not local.
Monday, October 29, 2001
National Underwriter - The president of an independent agents group told his membership yesterday that the Sept. 11 terrorist attack has underscored the insurance industry's importance to the nation, William F. Hofmann III, outgoing president of the Independent Insurance Agents of America, made his observations during the opening general session of the Alexandria, Va.-based group's annual convention here. Mr. Hofmann praised those who had made the trip to the convention despite the grief, anger and anxiety many feel in the wake of the terrorist attacks on the nation. Their determination to attend, he said, "speaks to a quality that is uniquely American; a confidence and stubbornness that defies hardship. It speaks to a rebirth of spirit and a genuine sense of purpose. It speaks to a courage that only free people can ever truly know."
Monday, October 29, 2001
Insurance Journal - On Tuesday The National Association of Insurance Commissioners reversed its previous decision to permit Lloyds to deposit 60 percent, rather than 100 percent, of the amount normally required into its U.S. Reinsurance trust fund based on estimates of its gross liabilities. The NAIC sited the "need to fully evaluate any liquidity problems on a syndicate-by-syndicate basis prior to granting an extension application to the entire Lloyds market," as the reason for its decision. It reiterated, however, that "one hundred percent of funding of gross liabilities has been and continues to be the legal requirement for credit for reinsurance for Lloyds of London Syndicates."
Friday, October 26, 2001
National Underwriter - Losses from the destruction of the World Trade Center contributed substantially to $840 million in third-quarter losses for Hamilton, Bermuda, insurer XL Capital, LTD, the company said. "Our losses were overwhelmingly impacted by the results of the Sept. 11 attack," said Brian M. O'Hara, president and chief executive officer for XL during a conference call today. "We are confident that we have identified all of the areas of exposure," added Mr. O'Hara. Other losses for the year made for the most "complex" financial report for the company, noted Mr. O'Hara, adding that last month's events have made risk transfer "an increasingly valuable and scarce resource." For the quarter, XL reported losses of $840 million, or $6.57 per share, compared with net income gain of $139.5 million, or $1.10 per share, for the third quarter of 2000.
Wednesday, October 24, 2001
Insurance Journal - Lloyds confirmed an earlier report from Standard & Poors that gross losses from the events of September 11 will be around £5.4 billion ($7.7 billion). The net loss estimate of £1.3 billion ($1.85 billion) after reinsurance recoveries remains unchanged. "The figure, reached following discussions with Lloyd"s management, is considered broadly consistent with Standard & Poors current estimate of the global industry loss," said a S&P press release. Its considerably lower than the £7 billion ($10.1 billion) figure calculated by some analysts, but is likely to be more accurate. Lloyds spokesman Adrian Beeby indicated several weeks ago that Lloyds provides otherwise private financial information to S&P and A.M. Best, but not usually to other analysts.
Wednesday, October 24, 2001
National Underwriter - The future of insurance coverage and rates will rest upon the decisions of reinsurance treaty renewals come Jan. 1 and decisions made in Washington to develop a terrorism reinsurance program. The observations came today during a CEO Breakfast Forum sponsored by the Insurance Brokers Association of the State of New York headquartered in Glenmont, N.Y. and JP Morgan Chase in downtown New York City. Calling the terrorist attack of Sept. 11 the "biggest event ever" to affect the insurance industry, Harold L. Morrison, senior vice president and managing director, New York brokerage zone officer for Warren-based Chubb, said the reinsurance companies have "taken a pretty significant hit." For them to stay afloat, he said, clients will see rates rise significantly.
Thursday, October 18, 2001