Workforce management tops the list of challenges for chief claims officers at leading property and casualty insurance firms, according to a new survey from Towers Watson.
In its survey of 41 chief claims officers from a range of company sizes, 76% cited workforce management as a top three business issue. That was followed by “achieving financial results,” with 56% citing that as a top three challenge, and 54% ranking “effectively integrating and leveraging technology innovations” as a main concern.
In terms of workforce, two-thirds said that attracting and developing critical-skill workers was their top challenge and 59% cited maintaining employee morale.
“Insurers are responding to this dynamic in a number of different ways, most notably by revising claim processes, modifying job functions and leveraging technology innovations, where feasible,” noted Brian Stoll, director of the P&C practice at Towers Watson.
Respondents reported several benefits from claim technology innovation, including leveraging automation to revis claim processes (68%) and improving execution of best practices using operations metrics (61%).
“Experienced and effective claim personnel are critical both to the organization's financial success and franchise value to policy owners,” noted John Gayley, director and North American Insurance Industry leader for Executive Compensation at Towers Watson.
“This underlines the importance of providing market-competitive total rewards, ongoing development opportunities and a compelling value proposition to attract and keep the best performers,” he added.
The vast majority (93%) of those surveyed indicated that they handle more than three-quarters of their claims internally.
Still, 71% said that more than half of their claim staff began their development and training at other carriers while using different claim management practices, presenting a challenge in terms of claims functions and requiring additional training, Towers Watson said.
Seventy-one percent reported that their employees receive a minimum of 20 to 40 hours of formal claim training per year, and 95% of adjusters receive ongoing formal claim training, according to the survey.
However, about a quarter (26%) of their direct supervisors and managers receive no ongoing formal training. About the same percentage (27%) of supervisors spend more than four hours daily reviewing their direct reports’ files, with the whole survey group averaging 2.7 hour per day.
Most companies (95%) do administer some kind of claim quality assurance every four months on average, according to the survey results, but only 49% hold formal meetings with all claims staff to discuss the results and plan to act on them, Towers Watson said.
“If carriers just focus on the quality assurance score, the benefit of discovering and addressing inefficient processes is lost,” noted Frank Ramsay, North American Claim Management practice lead at Towers Watson. “A better solution would be to use the results to identify and act on claim performance improvement opportunities that could elevate the value of quality assurance.”
In terms of litigation, two-thirds of the insurers said they hire panel counsel for 100% of their litigated claims, with a third using a mix of staff lawyers and panel counsel.
The majority (64%) said they typically assign their staff lawyers the liability cases and “routine” non-conflict cases, while about the same percentage said panel counsel usually takes on conflict cases and more complex litigation.
When asked whether a claim should be reassigned when it enters the litigation phase, the respondents were divided, with 39% continuing with the current adjuster and 32% referring new suits to a claim litigation specialist. A fifth of respondents said they transfer control of the claim to defense counsel while maintaining adjuster oversight.