Claims people are uniquely positioned in the industry to speak with authority on trends, issues and developments impacting underwriting. After all, we are at the coal face, and see first hand the volume and types of claims that are a major factor in premium trending. So then why do we hear so little from the claims end of town? Why is it actuaries, lawyers and underwriters who are deferred to on the issues of claims?
During the recent wave of tort reform the commentary from lawyers to underwriters tended to colour the view of the industry. They were advising insurers there were significant reductions in litigated claims. While that was correct, it didn’t reflect the full picture, as lawyers don’t see the unlitigated claims. The conclusion drawn by many underwriters was that tort reform was successful in curbing claim costs – yet most claims people knew that claim numbers had not been reduced significantly (although there had been a shift from litigated to unlitgated claims) and that average claim costs were increasing. It is no surprise now that in a recent survey undertaken by Proclaim there was not one corporate client who felt that tort reform had been successful in reducing claims costs.
I have met many impressive people who choose to be in the world of claims, so why are our views underrepresented? As claims people we have to accept some responsibility for where we sit in the insurance space. We need to do a few things. First, challenge traditional notions of claims being seen and not heard. Second, there is no point making a noise if you don’t have a grip on numbers and trends. So look at the big picture and understand claims trends by using statistical analysis. More on that in a blog to follow on benchmarking, but the reality is we don’t measure claims results as well as we ought. Finally we need to stop deferring to lawyers and actuaries and be prepared to work with them to make calls on important issues in the industry. Maybe then things will even up a little and it won’t take a hard market for claims to be front and square on all important claims programs.