The Claims Adjuster Decision-Makers
Stop Overanalyzing to Separate Yourself From the Pack
There’s a hesitation in the claims industry about making a quick decision. And why wouldn’t there be, given all of the information and evidence that might be out there? What if your decision is incorrect? There are consequences for actions that could follow you around, whether the decision affects customer or claimant service, or especially come performance review time.
But do we always have the ability to obtain every little piece of available information? In most cases, the answer is rarely. Sometimes there is a need to make the call to settle and move onto the next, or to stop the expense payment bleeding and work the other 119 files in your inventory. Time is money, after all.
However, often is the case where an adjuster does not feel comfortable deciding and overanalyzes a claim that is ripe for settlement. Some enjoy “decision shopping” and straining the time of coworkers. While it’s prudent to ask a teammate for advice, it doesn’t extend to every single team member (on multiple occasions) and all three supervisors on the floor.
That fine line between seeking the appropriate information and overanalyzing is what separates the top claims decision-makers from the pack. A manager’s dream is the hardy adjuster who requires little watering and sprouts flowers on their own. The type of adjuster who struggles to make a decision and disregards the time of others can be a supervisor’s burden. The “analysis paralysis” gets old, and soon becomes a trend where the manager is sought to make the decision for the adjuster.
Adjusters who struggle with decisions should also consider the source of the advice they are receiving. While outside defense attorneys may think they have a great chance to defend a case at trial, give thought to their motivations. Your phone calls and emails to them are productive to a point, but once you have the info you need, it makes little sense to keep asking them for their input if none of the facts have changed.
Consider the scenario in which a new lawsuit arrives for an errors and omissions claim. A broker's documentation blunder resulted in a coverage gap between a primary and umbrella policy for the high net worth insured who is now potentially on the hook to fill the gap based on the claimant's damages. Is it always the best decision to acknowledge the new suit and send it off to counsel for a full review, filing of an answer, and to start the discovery process? Or could it be beneficial to request a 60-day extension to answer, determine the information surrounding the oversight, and begin to evaluate the case? What about calling the plaintiff’s attorney and engaging in a quick negotiation to see if settlement is an option before incurring defense bills? Would that also save face with the insured's client if you were proactive and looked to extinguish the exposure as quickly as possible? Think about the fact that if liability is an issue now, it is likely to be the same in the future, so why not move towards a resolution? Obviously, there are appropriate cases to defend, but sometimes when we struggle on a decision, we can soon find ourselves at the steps of the courthouse in a mad scramble to resolve for an inflated price.
It is true that many of the top experienced liability claims adjusters have their battle stories, the tough decisions made where some resulted in “scars,” taking a chance at trial when they could have settled. But they can stand behind the fact that they made the decision and were proactive instead of waiting too long and then dealing with a decision thrust upon them.
Ask any senior claims representatives or management if they have made a mistake on a case. They all have, but while they retain those scars, the valuable part is that they made the decision and it was a valuable learning experience in retrospect.
So, can you spot the claims decision-maker in a new-hire interview? The standard questions that are used could be “Tell me about a time you were faced with making a tough decision under a deadline with limited information. What happened? Did you have all the information you needed? Would you do anything differently in hindsight?”
Can you always get an answer from the candidate? Maybe not, maybe they dance around the question, which is a good indication where they may fall. Perhaps a senior claims representative could fit into the interview process for a different perspective? Do they see this candidate being able to make the big decisions they frequently make with the proper training and practice? Would a simple take-home test or follow-up questions of a hypothetical scenario be a good idea? When (or perhaps, if) a candidate sends the thank-you email for the interview, how about a response to them with a real-life adjuster question to assess critical thinking?
Also, think about your direct reports. How do you change their thinking and confidence? How do you develop decision-makers as a manager? Don’t give them the answers; have them make the call before you provide your opinion. Perhaps being mentored by a senior adjuster can encourage such thinking. Let them know there are no wrong answers; they just need to back up their stances with sound reasoning. Do you encourage “decision shopping,” or is it recognized as a habit to use only sparingly? Can you use an example of “decision shopping” as the basis of a unit training session? In fact, it is clearly recognized that regular training sessions are a means to help staff develop strong decision-making skills that are founded in confident knowledge.
At the forefront, we are not talking about making a claims decision in haste or ignoring key information. We want to develop the critical thinkers to make decisions and learn a valuable lesson they can use in the future. That is how we grow as adjusters. Gather your information, consider the avenues to get to your decision and potential consequences, make the call, and move on. The claims will keep coming and you’ll never be without a new one. There will always be another file in need of the next big decision.