By KATIE KUEHNER-HEBERT, a freelance writer based in San Diego with more than two decades of journalism experience and expertise in financial writing
Greenwich Associates in Stamford, Conn., last month named FM Global, Travelers Insurance Co., Chubb Corp. and The Hartford Insurance Co. as winners of the 2010 Greenwich Claims Excellence Awards. Honorable mentions were Old Republic Co., AEGIS and Allianz.
While these major insurance carriers received accolades for the quality of their insurance claims process, it appears that risk managers are saying that most of the industry could stand to significantly improve their performance.
The awards were part of Greenwich's 2010 Large Corporate Insurance Study, in which 683 corporate risk managers ranked carriers' claims processes using three criteria: coordination with brokers, processing responsiveness and willingness to pay.
Greenwich consultant David Fox said that most carriers received top ratings from less than half of their corporate clients--in some cases significantly less.
It's not just the speed of the claims process that risk managers care about, Fox said.
"Risk managers have to answer to their C-suite and to business-line managers, and they need more than technical legalese responses from the insurer," Fox said. "They want to know that somebody at the insurance company is really on this and will be there if there are any problems or when the risk manager needs information."
Two companies stood out in the study, Fox said: FM Global for its superior client ratings in every aspect of the claims-paying process, and The Hartford, for its improvements in claims quality ratings from 2009 to 2010.
FM Global's senior vice president of claims Gerry Alonso said that his first reaction to the study's findings was pride for the efforts of his team, but his second reaction was "how to build on this for the coming years."
"We may be in the business of adjusting losses, but it may be the first time our client has experienced a loss, and the more we can do to assist them and take things off their plate, the less stress for them," Alonso said. "They may be dealing with injuries or God forbid deaths--so if we can assist them with mitigating their losses and get them back into production as quickly as possible, it's a win-win."
Chubb ranked in the top five in all three categories, as 33 percent of its clients gave it an excellent rating for coordination with brokers, 41 percent gave it that rating for processing responsiveness and 38 percent for willingness to pay.
"Customer service is a hallmark of Chubb and one of the differentiators of the marketplace," Chubb spokesman Mark Schussel said. "We continually assess our service through our own feedback mechanisms, and we are pleased that this study reflects that feedback."
THOSE WHO DIDN'T EXCEL
Paul Tuhy, global head of claims for XL Group, said that he was pleased that his firm ranked higher than its principle competitors in two categories--coordination with brokers (37 percent) and processing responsiveness (29 percent). However, Tuhy was "surprised" at the firm's lower ranking (25 percent) for willingness to pay.
"We always want to do better, and so we're initiating a global claims system, which will be fairly unique to the industry," Tuhy said. "For example, processing on a global basis will help risk managers whose claims policies originated in Austria but had a loss in California."
Commercial insurer ACE Group ranked in the middle for coordination with brokers (30 percent), in the lower half for processing responsiveness (24 percent) and in the lower half for willingness to pay (27 percent).
"We recognize the importance of claims management in the overall customer relationship.As such, we have been taking several steps to improve our claims service, including moving claims professionals closer to customers, enhancing automation to speed the servicing of smaller, high-frequency claims and establishing claims client executives for large customers to coordinate the necessary ACE resources for resolving claims issues," said ACE spokesman Stephen
Liberty Mutual and Chartis declined to comment. Liberty was ranked near the bottom of the list for coordination with brokers (24 percent), in the middle for processing responsiveness (30 percent) and in the middle for willingness to pay (29 percent). Chartis was at or near the bottom for the three categories, with 25 percent, 23 percent and 14 percent, respectively.
THE RISK MANAGER'S ROLE
Chris Hess, partner and co-founder of RWH Myers, an accounting firm that consults risk managers on insurance claims, said that risk managers can be more proactive in the claims process to get better service.
"We propose that you set up a meeting early on to manage everyone's expectations," said Hess, who is based in Pittsburgh, Pa. "Try to set up a timeline where you promise to deliver documentation and get them to promise to provide responses within a certain amount of time. If they can provide feedback on an interim basis, hopefully that will lead to interim payments."
For the study, Greenwich interviewed risk managers at 683 U.S. companies with $500 million or more in annual revenues between October and December 2009.
September 13, 2010
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