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.

Supermarkets are often hard to insure. There are at least three reasons for that: First, the number of coverages they need can be daunting. Second, the number of employees (workers compensation) and customers (general liability) that have to be covered can be even more daunting. Third and most important, the sheer number of claims they may incur and have to manage can be downright terrifying. If you think that sounds odd, consider just these four sources of claims:

  1. Slips and falls. Whether those slips and falls occur inside the store from spills and wet spots — or outside the store from ice, snow, and cracks or other defects in walking surfaces — the supermarket could have to manage claims for injuries to knees, ankles, hips, elbows, or skulls.
  2. Injuries to employees from loading, unloading, and other lifting tasks. Those kinds of tasks can lead to back strains, other muscle strains, tendon and ligament injuries, and more.
  3. Injuries to employees from cleaning and other equipment. Floor polishing machines and industrial vacuums can cause scrapes, lacerations, muscle strains, and other injuries.
  4. Spoilage from power outages or other reasons. Storms and aging power grids can cause power failures resulting in the loss of perishable inventory.

In any of those situations, the attendant claims have to be managed and adjudicated.

Connecting the Dots

To manage all those (types of) claims, you can record, manage, and adjudicate each claim separately. If you do, you’ll learn what your loss costs are, but you won’t be able to connect many dots.

Alternatively, if you adopt a flexible platform that constitutes one source for all of your claims information and gives you a disciplined process and workflow, you’ll be able to:

  • Track all your loss costs
  • Identify the trends suggested by types of incidents, their locations, their causes, and their related claims
  • Determine ways to anticipate and, therefore, to mitigate such incidents in the future
  • Better manage your overall risks, regardless of their types or their corresponding incidents and claims
  • Lower your overall loss costs and, thereby, lower your liability, property, and workers compensation insurance premiums.

We don’t want to tell you what to do. But if it were our supermarket, we know what we’d do. And remember: You can’t manage what you don’t track.

Oh … uh … you missed a spot on aisle five.

You can tell you’re really deep in the claims weeds when you start thinking about subrogation. Since we are deep in the claims weeds, we have to think about it.

To put it simply, just in case you’re not deep in the claims weeds, subrogation refers to an insurance company’s seeking reimbursement for the costs of a claim from the party — or the insurance company of the party — responsible for damages that precipitated the claim. If responsibility is established and documented, subrogation can begin at any point in the process of settling a claim.

Here are some examples from a few different industries:

  • Property/Casualty. A cement truck careens around a corner at 90 miles an hour, on two wheels, and t-bones the car you’re driving. By some miracle, you’re not injured. But your car has to be removed from the scene with a dust pan and a squeegee. The driver of the cement truck is determined to be at fault by virtue of the facts that (A) he was exceeding the posted speed limit by 60 miles an hour and (B) driving a cement mixer on two wheels is permissible only in movie stunts and monster-truck shows. The cement truck driver’s insurance should pay for the cost of finding and replacing your car. But that process is held up because the cement truck driver’s insurance company is also contending with the fact that the cement truck driver filed a workers comp claim, contending he had trouble controlling the vehicle because his vision was damaged from falling into the cement mixer. Under those circumstances, your insurance company would pay to find and replace your vehicle. Then it would seek reimbursement from the cement truck driver’s insurance company for the cost of your claim, including your deductible, the dustpan, and the squeegee.
  • Construction. A plumber is tricked by an electrician into biting a live wire. The plumber suffers burns to his face and ends up with a terrible perm. While the perm will grow out, he files an injury claim with his company’s insurer for the burns to his face. The electrician is determined to be at fault for professional negligence and for playing a practical joke in an inappropriate setting. The plumber’s insurance company uses subrogation to seek reimbursement from the electrician’s insurance company for the plumber’s injury, for playing a practical joke in an inappropriate setting, and for shaving the plumber’s head since he opted not to let the perm grow out.
  • Hospitality: The chef in a restaurant bets a waiter he can’t jump over a patron’s table without disturbing anything. The waiter takes him up on it. Since the waiter had pounded 12 shots of Jose Cuervo at the restaurant’s bar before his shift, he miscalculates his take off, fails to get the necessary speed and elevation, and plants his lead landing foot in the patron’s clam chowder. The patron suffers burns from the hot chowder and files a liability claim against the restaurant. He then goes to the emergency room (ER) to be treated for his burns. His ER visit is covered by his medical insurance. Since the waiter was determined to be at fault for improper execution and being over the legal blood-alcohol limit, the restaurant’s liability insurance is responsible for paying the patron’s liability claim and for comping him another bowl of chowder. And since the patron filed a liability claim against the restaurant, his medical insurer subrogates the cost of the ER visit to the restaurant’s insurer.

It’s Not That Hard

Chances are your claims won’t be anywhere near as complicated — or absurd — as the ones above. Nevertheless, we built subrogation capabilities into Cloud Claims to make sure you’d be able to cut through the weeds and handle anything that comes your way.

You and your claimants will be happy we did.

`Curiouser and curiouser!’ cried Alice (she was so much surprised, that for the moment she quite forgot how to speak good English).

We thought of that line from Alice’s Adventures in Wonderland when we read a recent article in PropertyCasualty360. The article — “Mitigating risk & reducing employee claims for commercial clients” — said this, in part:

As employers continue to struggle with managing remote versus in-person employee working conditions around the United States, it is expected that employee practices liability insurance (EPLI) claims will continue to rise. In fact, data from the Equal Employment Opportunity Commission (EEOC) shows that EPLI claims have increased every year since 2003. EPLI claims include any employment-related claims such as wrongful termination, discrimination, workplace harassment and retaliation.

That citation appears to employ the logical fallacy of false cause. The assertion seems to be (A) managing remote versus in-person employee working conditions will (B) cause EPLI claims to rise. But if EPLI claims have increased every year since 2003, then A is not necessarily the cause of B.

One More Thing

The article also says this:

Some degree of risk is unavoidable for businesses, but ignoring that risk increases the volatility of outcomes and potential damage. Sixty-five percent of founders admit that risk is an inherent part of business and is necessary to grow.

The first sentence is simply and logically true. The second sentence is shocking in that only 65 percent of founders admit to the reality of risk. (And we wonder why tort lawyers are overburdened.)

Universal Truth

All of that musing about philosophy and logic notwithstanding, one thing remains universally true: Claims — EPLI and otherwise — have to be managed. And a SaaS platform that automates workflow and operationalizes risk mitigation by enabling users to identify — and thereby mitigate — claims and risk trends by type is a good place to start. After that, if you can find a SaaS platform that also also tracks salvage, recoveries, subrogation, various parties to incidents, claims by type, vehicles, road conditions, types of injuries, wage details, and more — with customizable tags and drop-downs — buy it.

Anything else would even make Alice wonder.

The current issue of Claims Magazine contains an article called, “How Chatbots are Revolutionizing the Insurance Industry”. The article said this, in part:

Chatbots are available 24/7 /365 and don’t take vacations, sick days or personal time. Nor do they draw salaries or require matching benefit programs or resources dedicated to resolving interpersonal disputes, issues regarding advancement and promotions or office space.

We’re all about people, whether they be employees or customers. But the article got us thinking more about something that recently crossed our minds: What if we used a chatbot to enable people to reports claims? The idea might not be entirely novel. But we think it would be particularly beneficial in the context of Cloud Claims.

The Idea

We could create an entire chatbot-based incident-collection/claim-initiation/reporting process. Rather than creating yet another app (doesn’t the world have enough apps already?), we thought it would be preferable to report a claim conversationally with a chatbot. Such a conversation might go like this:

Claimant: Hi. I’d like to report an incident.

Chatbot: What kind of incident?

Claimant: My parked car was hit by a cement mixer that lost its brakes.

Chatbot: Is you car totaled?

Claimant: I don’t know. I can’t see it under the cement mixer.

Chatbot: Can you send photos of the damage to your car?

Claimant: No. It’s still under the cement mixer.

Chatbot: Was anyone injured?

Claimant: No.

Chatbot: Did you call the police?

Claimant: Yes.

Chatbot: Did you get a copy of the police report?

Claimant: Yes.

Chatbot: Were you charged with anything?

Claimant: Loitering.

Chatbot: Why?

Claimant: When I saw the cement mixer headed toward my car, I didn’t get in it. I just stood on the sidewalk.

Chatbot: Is there anything else I can help you with?

Claimant: Can I order a pizza?

Chatbot: You have to call another chatbot for that.

[click]

The Bottom Line

Using a chatbot would allow for flexible, out-of-order data collection. It would enable people to send photos and attachments to the chatbot via text message. And at the end of the call, the chatbot could create an incident in Cloud Claims and confirm everything with an e-mail. In addition, chatbots would also allow people to get 24/7 updates on the status of their claims and more.

The only thing it wouldn’t do is let them order a pizza.

We have a number of clients in the transportation industry. Given the number of claims to which trucks and truck drivers are susceptible, we’re always eager to help our clients manage, track, and settle their claims as quickly and efficiently as possible.

Two of our client companies — Long Haul Cowboys, Inc. and Big Rigs Amalgamated — recently had separate incidents at roughly the same time. Since each of those incidents produced multiple claims, we asked the CEOs of those companies — Tiny Littlestone of Long Haul Cowboys and Duke Waslewski from Big Rigs Amalgamated — if they would talk to us together. They said yes.

What follows is a cleaned-up transcript of our conversation, with all the bad truck-driver words taken out. Tiny is represented as TL. Duke is represented as DW. And we, as always, are represented as CE (Claims Expert):

CE: Thank you for joining us today, gentlemen.

Burt and his new rig.

TL: It’s good to be here.

DW: Speak for yourself, Tiny.

CE: Well, great start there, men. Let’s start with you, Duke. It seems you had a man who was refusing to drive. Is that right?

DW: Yeah. Burt Sniglitz said he just wanted to stand and admire his new truck.

CE: Did you file any insurance claims on Burt?

DW: No. But we did file claims against Burt for professional liability, property damage, and errors and omissions.

CE: Can you be more specific?

DW: Sure. The professional liability was because he was loitering on company property. The property damage was because he was kicking the tires. And the errors and omissions was because he omitted his job, which was supposed to be driving.

CE: And what was the incident to which you tied those claims?

DW: Burt was an accident waiting to happen. And he did.

CE: Okay, Duke. That’s quite the story, indeed. Tiny, I understand one of your drivers was involved in a crash caused by faulty equipment.

Ernie gets busted on the road.

TL: Yep. But it wasn’t exactly one of our drivers.

CE: Who was it?

TL: That was Ernie Bilge, our head mechanic.

CE: He got pinched for faulty equipment?

TL: He said he was taking it for a test drive to see if the tires were really flat and to determine if the engine was emitting excessive exhaust.

CE: And what were the charges?

TL: Driving with flat tires and emitting excessive exhaust.

CE: And what types of claims did you have to file for that incident?

TL: Well, we had two property damage claims — one for the flat tires and one for the blown engine.

CE: Uh huh. Anything else?

TL: We filed a negligence claim against Ernie.

CE: For what?

TL: Driving with a suspended license.

CE: Why was his license suspended?

TL: Because he had a prior arrest for driving with flat tires and emitting excessive exhaust.

CE: Thank you, gentlemen. We need a drink.

We’ll Take Our Tongue Out of Our Cheek

Is that story made up? Well, yes. Is it deliberately absurd. Well, yes. But the fact of the matter is you can manage almost anything — and all of your liability-related incidents — if you have the right claim system. If you’re in the transportation business, you likely don’t have to deal with people like Burt and Ernie. Nevertheless, we’re here to show you how Cloud Claims can transform your claims operations, whenever you’re ready.

In the meantime, be careful out there.

No. The title of this post isn’t a typo.

It occurred to us as we were thinking about crowdfunding, which Wikipedia defines like this:

Crowdfunding is the practice of funding a project or venture by raising money from a large number of people … typically via the Internet.

Then we thought about the time, the effort, and the money (not crowdfunded) we put into developing Cloud Claims. We wondered why no one had ever thought of calling the investment in developing software, the functionality of which is delivered from the cloud, as cloudfunding. We still don’t know. But we decided to use the term anyway.

It’s All About the Value

Aside from coining the term, cloudfunding, we decided to engage in it because we believed it was a better way to deliver value — more flexibly and less expensively — to the claims managers and risk managers who depend on our software to get their jobs done efficiently. We undertook the conversion of our old, on-premise claim product — IMS — for cloud delivery because we believed the cost savings, the increased productivity, the speed and efficiency, the performance, and the security would constitute valuable assets to our customers. We haven’t heard anything yet to suggest we were wrong.

We also think there’s value in playfulness, in having fun, in engaging in a little word play to come up with a term like cloudfunding, and in deliberately making life a little lighter. We take our work seriously. We take our commitment to our customers — their business and their loyalty — very seriously. But we like to believe we don’t have to take ourselves seriously all the time.

One More Thought

We’re a product company. We develop and sell software. But we’re also a service company. We provide the services that enable our customers to get the most out of the software they buy from us. And we’ve come to realize we derive at least as much satisfaction from supporting and interacting with our customers as we do from developing software. If we were inclined to coin another term, we might call that interaction cloudsourcing.

But we don’t want to get ahead of ourselves. 😉

Regardless of the business you’re in — insurance, transportation, construction, hospitality, carwashes, municipal government, or any other — the last thing you want and the thing you can least afford is an unhappy customer. And if you’ve been in any kind of business for a while, you likely know it costs significantly more to acquire new customers than it does to retain existing ones.

To our way to thinking, that means keeping your customers happy will keep them coming back. In fact, research by Bain & Co., Invesp, and others has determined that increasing customer retention by just 5 percent can yield profit increases of 25 to 95 percent, since the probability of selling to an existing customer is 60 to 70 percent, while the probability of selling to a new customer is between five and 20 percent. Those are pretty good reasons to keep your customers happy.

Plan A

Since we do what we do, we have to point out that one of the ways in which you can keep customers happy is to resolve their challenges — especially the challenges that result from insurance claims — as smoothly and quickly as possible. Whether your organization is fully insured (in which case, we can help your insurer), self-insured, or works with a TPA, Cloud Claims can help.

By improving everything from tracking to reporting, from workflow to reminders, from trend analysis and auditability, Cloud Claims helps manage claims more efficiently and adjudicate them more quickly.

The last thing you want is a customer steaming like the guy at the top of this post.