2013??

Welcome to 2013.  First all, Happy New Year to the readers and clients of Crossroads Advisory USA.  Crossroads is celebrating its 2 year anniversary this month.  Ready for a new year.

I am sure all the insurance companies are looking in their crystal balls making their best guesses what the new year will bring and what they need to do to address such things as improved customer service, regulators, new tricks of the trial lawyers, and what is need to continually improve claim handling and the financials of the company.

I read about 100 blogs each month from trial lawyers across the country.  It looks like the insurance industry has them very frustrated with the day to day claims that these attorneys used to advertise for clients.  Don’t get me wrong, they are still on TV, putting big ads in the yellow pages and some are even exploring social media to get their word out.  Why do I say they are frustrated?  Many large insurance companies reported last year that the numbers of new lawsuits filed are again down for another year.  Claims departments are doing a better job settling injury claims earlier and just talking to their claimants.  The advertiser trial lawyers are going after new clients such as medical and drug claims, workers comp and social security disability claims.  These are two areas that were highly specialized a few years ago, but now everyone is jumping into these arenas.

2012 was a quiet year for the NAIC. They have appointed a new consumer advisory group for 2013.  Minimal insurance representation and the majority consumer advocates.  So much for an unbiased group.  Keep an eye on your individual insurance departments.  The national group continues to gather data on insurance companies and I am sure you will see audits against companies in multiple states, lead by one insurance commissioner in 2013.  It was interesting to see that the governors of the states involved with Hurricane Sandy, came out with the exact same requirements for claim handling, deductible application and insurance company measurement.  I would guess where this came from, but I can’t without good information.  Think NAIC was involved?  Your call.

So what do the insurance companies need to do in 2013? Customer service has to be the number one thing that needs continued attention.  Do your companies have specific measurable guidelines for you departments so customer service compliance to these guidelines can be measured?  Are these guidelines tied into everyone paycheck and raises for 2013.  Everyone means from the CEO down to the file clerk.  Everyone means everyone.  Just don’t go after your claim departments.

What are your metrics for 2013 for all of your departments?  May be time to update them, so they drive customer service and the overall financials.  In two years of consulting and reviewing many different insurance companies, I have found few with actual procedural manuals and even fewer with metrics other than paid or incurred severity.  Claim handling involves processes that get the desired results.  Find these processes in your company and replicate them through out your organization.  Continue to fine tune them.  You get what you measure, is the old saying.

 Claim managers and even vice presidents have told me that they do not want to be held captive in a bad faith case because they did not follow their own procedures.  Better to have a rogue claim rep or employee that did not follow a procedure versus trying to explain why something was not done based on the trial attorneys perception of industry standards and you have nothing on which to base your answer.

New laws have come into effect in every state.  Have you updated your regulatory training?  When was the last time you did state specific bad faith handling?  Again these are two areas that I have found lacking in companies I have had the opportunity to do consulting. 

I wish you all the best in 2013.