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| | Understaffed, Overworked Claims Departments a Liability for Insurance Companies
By Robert Warne - July 13, 2001Insurance company cutbacks have left claims departments too lean to weather the impending storm of claims. Cutbacks have weakened and overworked claims departments and left insurance companies vulnerable.
For the past few years, IT professionals have been the hot item. But now as the economy slows, it appears claims professionals are the ones in demand. A recent study by Conning & Co. found a number of reasons why it’s time to bolster up claims departments with fresh talent.
The study, titled "Property-Casualty Claims Management: Adjusting to New Realities," points to the ’90s as a time when insurers sought profitability from pouring profits into outside investments rather that investing in core-business efficiencies (i.e., claims departments). This focus drew cutbacks in recruiting and training new claims adjusters who could eventually step up and succeed upper management.
"There are many experienced professionals at the executive and senior management level, but not enough people lower down the line who can be expected to take their place," according to Geri Riley, assistant vice president at Conning & Co. "The scarcity of future claims leaders needs to be addressed immediately. The claims division is the most public part of an insurer and it is as responsible for retaining customers as it is for minimizing losses."
Part of the industry’s claims department deficiency is due to reduced efforts to attract college graduates. Another weakness is blamed on the lack of educational and training opportunities insurance companies make available to claims staff. Claims executives, when questioned, expressed that there isn’t a clearly defined career path or development plan to prepare claims professionals for promotion.
The current litigation trend has ripened the need for experienced claims professionals that can skillfully manage each claim to minimize its cost. |
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