By CYRIL TUOHY, managing editor of Risk & Insurance®
Steve Hatch, former chief operating officer for Zurich, North America's claims operations, was recently promoted to chief claims officer for Zurich, North America. Managing Editor Cyril Tuohy spoke with Hatch about his new role and the value good claims management brings to an organization.
Q: Congratulations on your promotion. How tall an order is this for you?
A: We have a great claims team. I am looking forward to this rewarding opportunity to lead a group of talented claims professionals at Zurich, North America. Prior to this assignment, I was the chief operating officer for Zurich, North America claims. My new position focuses on delivering the value proposition of Zurich's claims operations to our customers. I'll be based in Schaumburg, Ill., but will be visiting our claims offices, as well as broker and customer locations around the country.
Q: The rate environment in property/casualty is very soft, as we
all know. What does that mean, if anything, for insureds when they go to submit a claim to Zurich?
A: At Zurich, we strive to improve our service levels regardless of market conditions. Our customers are the center of what we do and we partner with customers to reduce their overall loss costs. We measure our performance through customer surveys, broker feedback, and our quality assurance program. We also solicit feedback from our customers so that we can modify our products and services to better fit their needs.
Q: How does the slow economy hurt or help the claims industry? Given your experience formerly with GAB Robins, does the slow economy mean a contraction in the claims world, or an expansion?
We have seen a slowdown in industries like construction and auto sales. We have also seen a decline in the claims volume of certain lines such as workers' comp since there are fewer people on the payroll. We have the ability to shift resources within our claims department to adjust for changing claim volumes. We continue to manage our customer service through these slow economic times very well.
The way we approach claims service at Zurich is that we constantly think about alternative products and services for our customers. Claims plays a very big role in the overall insurance value proposition. The more we know about our customers the better we can serve them. We stress a culture of continuous improvement in our claims organization to address changing economic times.
Q: Are third-party administrators (TPAs) going to be a growing part of the claims business down the road? What are the advantages or drawbacks of using third-party administrators (TPA)?
A: There are many variables in answering this question specifically. We consider the needs of the customer and will continue work with third-party administrators as part of our claims service.
Q: In your experience, what area within claims does the property/casualty industry need to work on the most to improve its service and/or processes to benefit commercial insureds?
A: One of the key things that comes to mind is that we have to understand our customers' needs better. We have to understand what their business is all about, what solutions will address those needs from a risk perspective, and then partner with them to deliver the solutions. Through this partnership, we will work with them to evaluate ways to reduce their overall loss costs.
Q: We hear a lot about automating the claims process, yet so much of it remains paper-based, particularly for large claims. Will there ever come a day when a large claim can be processed end-to-end electronically?
A: At Zurich, we've had electronic files for over 14 years so we are able process work and move it around very easily. We are now moving from document management to content management, which includes digital audio and video. As we look to the future, it will be more rules based; there will be more predictive modeling. The goal is to reach better outcomes, through enhanced automation from first notice of loss to claims resolution. How you move work through the claims process varies by company. In personal lines with a homogenous book, it's fairly straightforward.
On the commercial side it really depends on the type of claim. I am not aware of any technology today that will completely automate a commercial claim for a complex line of business from beginning to end. I believe using the critical thinking skills of adjusters is key to delivering the service our customers expect.
Q: On the hardware side, will the advent of PDAs like iPads and other slate form factors make it easier for claims adjusters, the carrier or the TPA? Are you seeing some uptake in the claims world with these hand-helds?
What are other technology advances you are seeing?
A: I believe technology enhancements have and will continue to improve adjusters' capabilities. The virtual desktop offers opportunities from a cost and performance perspective. The real advances will be in business processes, business rules and predictive modeling technology, which will help us achieve better outcomes and provide better service. We will continue to evaluate innovative technology solutions for our adjusters and customers.
Q: What would you like to be able to tell a commercial insured about what they can expect with regard to claims handling from Zurich, North America in four or five years?
A: We will continue to make financial investments to provide technical excellence, superior service, and to develop the best solutions for them. Our focus remains on improving their total loss costs. We listen to our customers and are confident that we will provide excellent value and service for them. By doing so, this will enhance our customer's financial performance.
Q: We've heard in some circles that the industry is facing a shortage of talent when it comes to training the next generation of claims managers.
A: We are seeing a shortage of people in the claims pipeline. It's an issue that is broader than any one company and it will be necessary to solve this as we look to the future. We have reached out to colleges and universities to generate interest in Zurich and the claims profession. We have also developed in-house programs to train people on technical and leadership capabilities. I started as a claims adjuster and I know what a rewarding profession it is. We just have to get the message out there.
Q: What is the one thing a commercial insured can do to make the life of a claim manager easier? What is the one thing that an insurance carrier can do to make the processing of a claim by a commercial insured more pleasant or bearable?
A: I believe a commitment to a partnership of transparent communication is critical. The sooner a customer can report a loss to a company with as much information as possible, the better. Getting the claims process moving quickly is critical from a service and technical perspective. The carrier can make life easier for the customer by being very proactive in handling the claims and keeping them well informed on a timely basis.
December 1, 2010
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