By DAN REYNOLDS, senior editor of Risk & Insurance®
It's the moment of truth isn't it? You think you've done your job, managed risk properly and purchased the right coverage: But now here comes the insurance claim.
This is not the time to be shy, according to a panel of risk managers that Ernst & Young and Risk & Insurance®
convened in New York in June to discuss a survey the two organizations conducted on business continuity planning and claims resolution.
The survey, conducted in February with results compiled from more than 300 risk managers, uncovered an interesting fact: About one in three risk managers surveyed said that they met with the insurer once, or not at all, during the claims resolution process.
That isn't the best way to go, according to a panel made up of risk managers from General Motors Corp., Xerox Corp. and Honeywell International.
(Other findings from the survey were published in the Risk & Insurance® May issue.)
In some ways, reticence makes perfect sense and is--for better or for worse--part of human nature, according to Al Gier, the director of global risk management and insurance for GM. But, he said, there is really no good reason for shyness if you want to maintain a solid long-term relationship with your carrier.
"It can be uncomfortable. I mean, people try to avoid uncomfortable situations," Gier said, in describing risk managers' reluctance to meet directly with insurers during the claims resolution process.
But, guess what? Good things can happen when you talk, no matter how uncomfortable it might make you.
"It can actually make everybody better at the end of the day," Gier said. "I think we found out that some of our relationships got better after the loss."
Still, 25 percent of the survey respondents said they rarely talked even with the adjuster during the claims process.
Lois Fuchs, the vice president of risk management for Honeywell International, agreed that open communication can help to resolve a claim more quickly if there are no underlying coverage issues.
Talking during the claims resolution process and staying in touch at times other than renewal time or when there's a claim is a good way to maintain a strong insurer relationship.
In other words, don't be a stranger, according to Maria Diaz, director of global risk management for Xerox.
"I'm on the phone with the underwriter fairly frequently as things change, most of the time to pick his brain and see what's going on in the marketplace," Diaz said.
Diaz added that risk managers could also learn to be more open during renewal about the fact that claims exist and do happen.
"Clearly, we are buying insurance to cover claims, but no one wants to talk about the fact that you could have a claim and what that claim could be," she said.
A frank discussion of what kinds of claims might be in the pipeline is the best way to get language into the policy that will cover those claims, according to Diaz.
"If we don't have the dialogue in our potential claims scenarios, you are never going to get that," she said.
The insurance broker should be a big part of that discussion, of course, but it's one more reason for the risk manager to keep talking.
July 1, 2010
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