Are you killing your Claim people with numbers?

 

One nice thing about this consulting gig is I get to look at a lot of insurance companies and how they do business.  One thing always alleged in a bad faith case is the adjuster and managers are being compensated to pay as little on a claim as possible.  Plaintiff attorney really believe that employee compensation is tied to what the adjuster pays out.

The one thing that I have not found in any company that I have reviewed is what plaintiff attorneys thinks happens with regards to compensation.  The one thing that I have found is in some companies is that the annual reviews and merit increases for the claim staff can be based on as many as 52 measurements and metrics.  One company even comment as to whether the adjuster regularly reviewed his metrics and took appropriate action to improve results.  Nothing like being measured on measuring your measurements.

I have no idea why everyone is hung up on measuring numbers and not the outcome of a claim.  What ever happened to timely claim handling and a proper settlement? Both are exactly what the customer wants. Timely claim handling should include proper coverage determination and liability determination.  Timely claim handling requires timely contact with the claim participants, timely follow up and of course a timely evaluation.  Settlement amount proper is the overall measurement that should determine the quality of the claim handling. 

Now there is nothing wrong with having claim handling practices and procedures that you expect claim adjusters to follow.  I really encourage such a practice and is shows the company’s minimum expectation with regards to claim handling.  It is easier to defend a written practice versus a claim handled by someone’s seat of their pants.

Take a look at your metrics and see how many you really have.  Then think about the cost to create all of these measurements and the time staff takes every month to look at results.  In this day of reducing expenses, you many be surprised with the savings involved in reducing some of the measurements.