By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
I still vividly recall a session on "megaloss" insurance claims that I sat through at an Association of Insurance and Risk Managers (AIRMIC) show a couple years back. It was a rather humdrum PowerPoint affair until the presenter opened the floor to questions. Challenges rained down on him like hailstones. Sure, the audience members spoke with a British accent, which made them sound somehow less threatening and more polite. But still, these were raw accusations we're talking about.
Perhaps the British risk managers in the audience didn't know a member of the media was among them. Or perhaps they were so incensed that they just had to get this stuff off their chests no matter what.
Oh man, you should have seen it. They basically called the speaker's bluff at every turn for the better part of an hour. They claimed that insurers come into big property claims spoiling for a fight. Armed to the teeth with lawyers, forensic accountants, claims specialists, Mafia hitmen and anybody else paid by the hour, all rounded up to intimidate and overwhelm the insured (OK, "hitmen" is my word.)
Everyone has heard stories about certain insurers with notorious reputations for denying claims. Heck, they might as well be healthcare insurers they like to deny claims so much. Or how about stories about brokers who wheel and deal with carriers behind clients' backs: e.g., you pay the claim for this client and I'll bring that client's business to you?
Moving right along ... to adjusters. The risk managers in the AIRMIC audience railed on them, too. No longer are adjusters objective. In many cases, they're just the messenger--some might say lackey--for the carriers.
Compounding all these problems is the fact that, on many large property losses these days, risk managers aren't looking to collect from just one insurer. They have to collect from multiple. The bigger the loss, the farther up in the insurance tower the pain goes, the more carriers that get involved. Each with their own lawyers, accountants and opinions.
Upon whom can the risk manager lean? His own army of vendors? Good luck. The result is a claims process that is more contentious, complicated, time-consuming and costly for everyone involved. And the funniest thing of all is, even after a risk manager navigates this claims gauntlet, he still probably will emerge unhappy.
Why? A big part of what makes the claims process so complicated is risk managers' own confusion about what their policies entitle them to. Guess that's not so funny when you have tens of millions of dollars on the line. Hence, why some risk managers shout like howitzers when you bring up the topic.
Managing Editor Cyril Tuohy's Point on claims.)
June 1, 2010
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