Given the fact that it’s Halloween, we probably shouldn’t be surprised that we came across a blog the other day called, Insurance Nightmares. Nope. Not making that up. To be more specific, the purpose of Insurance Nightmares is to write about insurance claims. And to be even more specific than that, the purpose is to write about dissatisfaction with insurance claims:

Insurance claims are, in fact, boring and monotonous. That is until you have a claim and you are unprepared to deal with it. What’s worse is that if your claim is not handled correctly the first time, it can result in subsequent claims and sometimes, years of pain and misery … If it sounds like I am writing this blog from a point of experience, that’s because I am. In fact, we are still dealing with an open claim from 2017 (yes, it’s 2022 now).

The dude might have a legitimate gripe about his five-year-old insurance claim. We don’t know. In fact, we can’t know. We can’t know and we can’t help because he’s wiped the blog clean of any means by which his identity might be determined. That’s spooky.

Curiouser and Curiouser

We have trouble with folks who cause trouble anonymously. The author of Insurance Nightmares even went so far as to protect his privacy when he registered the domain. That has to make you wonder: What’s he hiding? Why is he hiding it? Is he afraid of something or someone? What does he hope to achieve by airing vague grievances about unspecified events or circumstances? Did he have a traumatic experience with a claims adjuster in his childhood? Was he fired from a job at an insurance company? Is he a Professional Troublemaker?

Presuming the blogger’s beef is legitimate, he’d stand a better chance of resolving his claim satisfactorily if he went about it in a more constructive way. We’re in business to prevent people from having miserable experiences with insurance claims. And while we develop our products for people who manage claims — to make them better able to satisfy policyholders who experience losses and file claims — we still sympathize with the guy. But he’s not likely to be helped in any meaningful way if he doesn’t come into the light and specify the nature of his complaint.

Hmm … we never thought of this before. But maybe the ghosts, goblins, and gremlins that haunt our neighborhoods on Halloween are dissatisfied insurance claimants.

That’s spooky, too.

For its most recent edition, Claims ‘R’ Us magazine surveyed 3,467 risk managers across a number of industries. There were only two questions asked in the survey. Here are the questions, followed by the top ten answers to each of them:

Question 1: Does your claims software integrate with other data sources across your enterprise to centralize claims data?

  1. No.
  2. What?
  3. I don’t know.
  4. I’m new around here.
  5. Oops. My phone’s ringing.
  6. I’m sorry. I’m on break right now.
  7. Can I get back to you?
  8. My boss is on vacation.
  9. I just work here.
  10. Could you repeat the question?

Question 2: Does your claims software allow you to analyze incidents and claims by type and location to determine trends and better manage risk?

  1. No.
  2. What?
  3. I don’t know.
  4. I’m new around here.
  5. Oops. My phone’s ringing.
  6. I’m sorry. I’m on break right now.
  7. Can I get back to you?
  8. My boss is on vacation.
  9. I just work here.
  10. Could you repeat the question?
Our Analysis

We can’t say we’re terribly surprised by those survey results. Organizations typically operate in silos, even by default. The larger the organization, the greater the number of silos. The idea of software that can act as a hub or a platform for centralizing and aggregating data doesn’t occur to many people because they’re never compelled to think outside of or beyond their silos. I do my job. You do yours. We go home at the end of the day. We come back tomorrow and do it again.

But we think there’s a better way.

We think those silos can be nullified to a significant extent with claims software that serves as a hub for all of your claims information. The advantages are short-term and long. Most immediately, you’ll be able to overcome operational challenges with silo-busting management and workflow capabilities that let you organize financials, documents, notes, and notifications. Over the long haul, you’ll be able to run reports, identify loss trends and patterns, manage risk, and integrate data across your entire organization to better control your losses.

You’ll be able to turn trial and error into smile and error, with fewer and fewer errors all the time.

In the first post in this series, we discussed potential claims that might be subrogated in various lines of business. This time around, we’ll take a more general view of subrogation and the importance of managing the intricacies of subrogated claims.

Recently, PropertyCasualty360 published an article entitled, “Why subrogation is more than a final box to check“, that noted the financial importance of subrogating claims efficiently and accurately:

In the current economic environment … insurers are looking for every dollar they can add to the bottom line. Carriers also know that customer experience has become paramount in policyholder retention. The carrier’s ability to successfully subrogate and provide a deductible reimbursement to their policyholders in a timely fashion is a key driver for a positive claims experience.

We’d venture to say maximizing profitability, optimizing customer experiences, and providing a positive claims experience is important in any environment. And if you accept the notion that insurance is the fulfillment of a promise, making your policyholders whole in the event of a loss is the promise.

What to Do?

Needless to say, every insurance company would like to acquire as many new customers — and write as many new policies — as it can. But according to CB Information Services, it costs insurance companies $500 to $800 to acquire each new customer. And according to Insurance Thought Leadership, it costs insurance companies seven to nine times more to attract a new customer that to retain an existing one.

So, if the old saying is true, “A bird in the hand is worth two in the bush,” wouldn’t it make more sense (along with dollars and cents) for insurers to improve their subrogation performance? This may seem counterintuitive, but a small increase in net subrogation revenue could be more profitable than issuing a new policy.

Maybe we should consider that to be food for thought, at least for now. But with competition for new policyholders on the increase, with claims costs an abiding source of concern for every insurance company, and with profitability being a key measure of sound operations, it might be worth looking for that extra buck a little closer to home.

In any event, as they say in Brooklyn, it couldn’t hoit.