Revolutionary change—change that upends the norm and establishes a new way of thinking—often is made during crisis, and make no mistake about it, the claims industry is in a state of crisis.
Claims professionals in general are aging and exiting the workforce much more quickly than they are being replaced. Ask a carrier or third party administrator about the nightmare of finding new talent or the dearth of experienced claims handlers who can manage the intricacies of large, complex losses, and they all will tell similar stories of worry. While a growing reliance on technology to assist in decision-making helps, it cannot completely solve a problem that is growing exponentially.
Adding to this talent crisis is the fact that there is no line of succession forming. Those in the millennial generation, who often are cited for being drawn to civic-minded work and for placing a greater emphasis on workplace satisfaction than compensation, don’t want to be insurance claims professionals—they want a career that helps people. How’s that for irony?
The problem is a classic case of perception becoming reality. Instead of being viewed as an industry that helps people rebuild homes after a disaster, fixes crashed cars, and helps heal workplace injuries and accidents, the industry is saddled with depictions in the media that paint it as a cold and ruthless one. Headlines like “Flood Hero’s Claim Denied,” and “The Storm After the Storm” only emphasize the negative outliers and fail to capture the fact that claims professionals almost always succeed spectacularly at picking policyholders up after they have been knocked down by disaster.
We don’t always help ourselves, either, when it comes to fighting these perceptions. Terms and titles like “adjuster” imply to the public that, yes, all claims will, in fact, be adjusted (downward).
Other industries have encountered similar problems of perception and revolted for change. For instance, risk managers once were referred to as insurance buyers. When the title changed about 25 years ago, there were few if any colleges offering a risk management degree. Today, there are more than 70 universities offering risk management programs, and undergrads that choose to major in risk management are becoming commonplace. A similar sea change happened when personnel departments became human resource departments.
The same kind of revolution is needed in the way our industry is viewed and valued if we want to attract the kind of talent needed to ensure the promise of a policy. We need to reinforce the fact that what we do as an industry is help people. It’s what defines us as a profession.
Change must begin at home, however, if we expect the public and media to follow. Along with a few industry “revolutionaries,” (see sidebar, Raising Their Fists), we believe that making an internal name change and adopting the word “resolution” to describe what claims professionals do should be the first salvo in the fight to take back our reputation and show the world that what we do deserves commendation, not degradation.
“Resolution” best describes what we do as an industry. We resolve issues and help get people back to where they were. It’s what we should emphasize in everything we do, and that includes our titles and department names. A new nomenclature that consists of terms like resolution departments; resolution coordinators and managers; and even chief resolution officers is a way to begin the revolution.
It’s already beginning. Let’s take a look at two of CLM’s innovative revolutionaries who are leading the charge by adopting the resolution name change across their companies.
Revolutionary #1: Berkley Life Sciences
When Berkley Life Sciences’ Vice President and Chief Claims Officer Hedy Linette Ranieri was first approached about the idea of integrating the term “resolution” into her company’s claims department, she started with a little research.
“[Berkley Life Sciences’ President] Jill Wadlund and I were swayed by the compelling pitch that CLM’s Executive Director Adam Potter made, so we went back to the office and looked at the definition of ‘resolution,’ discussed how it would apply to our company, and looked to see if it made sense to implement—and it did,” says Ranieri. “The meaning of ‘resolution’—the act of analyzing complex notions into simpler ones, of answering and solving problems—absolutely fits with what we do as a department.”
With Wadlund’s blessing earned, Ranieri met with her department to discuss the move and get their feedback, which found immediate acceptance.
“I met with our management team and asked them what they thought of it and how the move would resonate with our partners and brokers,” she says. “They all were immediately on board with it, which was interesting to me. It showed that the desire for change was there. I think the management team within Berkley Life Sciences only needed a day or two to think about it, which shows how much sense it makes. Plus, we like to be on the cutting edge of innovation, so this move is right in line with who we are as an organization.”
Since then, the company has begun to roll out the term internally, changing titles and referring to themselves as the resolution department. She hopes the name change is the first step in changing perceptions about the industry.
“The reason behind the name change isn’t superficial; it’s being done in an effort to change the image of the industry and the negative connotations attached to it,” says Ranieri. “The word ‘resolution’ versus any other word more aptly describes what we do on a day-to-day basis. If we’re going to continue to attract people into this industry, we need to change—it’s long overdue.”
Revolutionary #2: State Auto
State Auto Insurance Companies’ adoption of resolution took a slightly different path. Senior Vice President, Chief Claims Officer, and Risk Control Services Officer Steve Hunckler already was innovating a new approach for high frequency, low severity claims when Potter’s pitch arrived.
“We recently launched a pilot program that we built from the ground up that involved having our ‘express claims’ handled in a team environment instead of an individually assigned environment,” says Hunckler. “What that means is that when a customer contacts us with a question about a loss, any of the seven or eight claims professionals in the express unit can answer it for them. These claims professionals are empowered to resolve any issue, any file, and any claim that comes in the door.”
Hunckler says early results show impressive promise. Cycle times decreased, customer satisfaction is up, and the overall quality of the file being worked has improved, according to the company’s survey results.
“We rallied around the team concept, which we call ‘Just Own It,’” says Hunckler. “We were so confident that this approach would work that we even turned off these team members’ voicemail so that any time any customer calls in, they talk to a live person.”
To further differentiate the express unit, Hunckler decided to adopt the resolution title for its members. Those formerly known as adjusters are being retitled as resolution specialists, effective this month.
“This new title really fits better with what this unit is doing because they are in teams now,” he says. “They are resolving and owning claims together; they don’t own individual files anymore. In an express environment—where the claims are straightforward and uncomplicated—it’s really about helping the policyholder resolve their issues and claims so that they can get back to a preloss condition and do it as quickly as possible. We want to pay what we owe and resolve the claim with a great sense of urgency.”
The potential payoff is huge for State Auto. The express unit handles approximately 45-55 percent of the 160,000 auto physical damage claims that come in annually for the company. With that kind of volume, even small gains will have a significant impact on the bottom line.
“The pilot has been really successful, and changing the title of this unit’s claims professionals to ‘resolution specialists’ has really reinforced the goals with which they are tasked.”
Making the Change
A successful revolution needs a core group of like-minded professionals who are dedicated to change—but this commitment has to extend beyond the boardroom. True change comes through action, which companies like Berkley Life Sciences, State Auto, ARI Insurance Companies, Gallagher Bassett, and York Risk Services are demonstrating. Are you ready to join the revolution?
Raising Their Fists
Five companies have heeded the call to action and are adopting the word “resolution” across their organization. Will your company be the next?
- ARI Insurance Companies
- Berkley Life Sciences
- Gallagher Bassett
- State Auto Insurance Companies
- York Risk Services Group