Re -Ad juste dTaking Your Claims Organization From Ordinary To Extraordinary!

Christopher Tidball, SCLA, SSBB

Executive Claims Consultant

(904) 742-9031

www.christidball.com

Ed Kent, Esquire

Law Offices of Kent & Senen

(661) 362-0800

edkentlaw@att.net

“Don’t tel l me the sky is the l imit… there are footprints on the moon” – Paul Brandt

“Guttenberg Moment”

The Ah-ha moment

Archimeades- levers, pulleys, irrigation and the calculation of pi

Mesopotamians (circa 3500 B.C.) discovered that wheels made moving things easier

Through the prism of history…• Nikola Tesla- “Inventor of the 20th century”

– Induction motor, 3 phase electricity, fluorescents

• Thomas Edison- Let there be light– 1097 patents, light bulb, phonograph, movie

camera and projector

• Karl Benz- Mobility on the ground– internal combustion engine

• Wright Brothers- Mobility in the air– First successful airplane

Getting to Extraordinary

• 2012 is a year for bold new ideas

• Leveraging people, processes & technology

• A chance to redefine and reposition organizations to gain a competitive advantage

• Changing paradigm from “what we do right” to “where can we improve?”

• Learn from transformational innovators across the business landscape

Great leaders not only lead, they transform industries…

Leaders…Innovators…Transformers

Innovation Wins!

Source: Business Week

What’s missing?

Source: Business Week

?

Taking Your Claims Organization From

Ordinary to Extraordinary!• Benchmarking- The devil is in the details

• Organizational Improvement- Leveraging People, Process & Technology

• Just Win, Baby – Getting the right people into the right positions

• Perfection- It may be impossible but chasing it will result in excellence

Benchmarking

The devil is in the details…or is it???

Benchmarking

• Over measuring• Measuring the wrong metrics

•Timeliness•Quality•Accuracy

The foundation of claims

•Timeliness•Quality•Accuracy

The foundation of claims

Benchmarking

• Over measuring• Measuring the wrong metrics• Well intended goals• Unintended consequences

Unintended Consequences

Benchmarking

• Over measuring• Measuring the wrong metrics• Well intended goals• Unintended consequences• Organizational calibration

Defined Metrics

• Avoid tendency to measure everything possible

• Consider the most meaningful metrics to bottom line results

• Which metrics are causally related

• Which metrics will achieve intended goals without unintended consequences

Effective Metrics

• Don’t set a goal of “improving subrogation referrals”… subro unit will be inundated with every closed collision and simply close most of them as unrecoverable.

• Set a goal of increasing subrogation by X%.

• Set a counter measure of decreasing subrogation referrals closed with no recovery.

Benchmarking that really works

• Where are you now?

• Where do you want to be?

• How do you fare against the industry?

• ISO Fast Track Report, NASP Benchmarking Study

Effective Claim Metrics

• Quality Focused– People, process and technology

• Accuracy Driven– Was the outcome the right one for the given situation?

• Missed Opportunities– Fraud Recognition– Missed Subrogation (15% of all claims)– Adverse Demand Containment

The impact of cycle time…

Organizational Improvement

Leveraging people,

processes and technology

This is what we are up against!

People

Your biggest assetPeople provide your knowledge and culture

Your most expensive a$$et FTE can account for 50-60% of operating budget

Your long term solutionPeople, not gadgets, gimmicks or even technology, define

your future

The root cause of your problems 80/20 Rule 20/60/20 define A/B/C players

Claims isn’t for just anyone…

Getting Results

• People– Proactive behavior

• Change mindset from reactive to proactive, front load claims with aggressive contacts, inspections and settlements

– Hire for quality• Not everyone has the skill or tenacity to be a great adjuster

– Blocking and tackling• The greatest technology and most streamlined processes are

meaningless without fundamental execution of basics

– Accountability• Stop giving ribbons for participation; focus on getting it right

Money left on the table

• 15% of claims closed with a missed subrogation opportunity

• $15 billion dollar industry

• Monthly reviews of files closed with no recovery potential identified can yield significant returns

• How many collisions are paid with no PD payment and no referral to subrogation?

Process Improvement

• Define current processes– Map out end to end claims workflow

• Identify process gaps– Aggressively seek out process deltas

• Right people in right positions– If a person isn’t cutting it in claims will they cut it in subrogation,

salvage or total loss?

• Organizational calibration– Ensure that expectations are fully understood by staff and

properly communicated to all stakeholders

Process Example – Adverse Subrogation

Technology• Predictive Analytics• Data Mining• Historical Analytics • Claims Process Technology• Claims Data Warehousing• Internet /Social Networking

Internet Resources

Just Win Baby!• Getting the right people into the right positions

• Recognize that there isn’t just one way to get results.

• Think outside of the box

• Al Davis’ 2 Rules:

Rule #1 -Show up on Sunday

Rule #2- Don’t break the law

(Of course, #2 was flexible if you followed #1…)

The Culture of Raider Nation

• The “Bad Boys of Oakland” did things differently

• They broke the mold of a traditional franchise

• Al Davis proved there was more than one way to skin a cat

• Breaking down barriers and transforming the NFL– George Blanda was too old yet he played for the Raiders until age 48– John Madden was too green yet he won several division titles and a Super Bowl– Art Shell- 1st African American head coach in the NFL– Tom Flores- 1st Hispanic head coach in the NFL– Amy Trask- 1st female NFL executive

Paradigm Shift

• What Al Davis taught us is that success can come unconventionally

• His motto was “Just Win, Baby”

• Just because we’ve always done it this way doesn’t mean we are doing it right….we need to do it BETTER!

• A paradigm shift to “where can we improve” is the surest way to yield meaningful results

Failure is not fatal, but failure to change might be - John Wooden

Maximizing Efficiencies

– Headcount (A/B/C players)– Workflow efficiencies– Economies of scale– Cost per claim– Basic Blocking & Tackling (80/20 rule)

“By identifying A players, motivating B players and removing C players, any leader has the ability to fundamentally transform any organization”

– Re-Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary!

• Examining claims model

Perfection is hard to attain

• 1972 Miami Dolphins – Never lost a game– But they gave up points

• 1933 Providence Huskies– Never lost a game– Never gave up a point– But even they gave up first downs

Execution and Results

• Southwest Airlines– On time performance is 87.5%

• Toyota Lexus Division– 108 vehicle defects per 100 cars

• Amazon– Customer Satisfaction rating 83 of 100

• Your company– Current leakage rate

“Perfection is not possible, but chasing it will result in excellence” -Vince Lombardi

Open Discussion

Chris Tidball, SCLA, SSBB

Executive Claims Consultant

(904) 742-9031

chris@christidball.com

www.christidball.com

Management Consulting/Process Improvement/TrainingClaims Strategies/Subrogation/Six Sigma Methodology

Edward S. Kent, Esq.

Attorney At Law

Kent & Senen Law

(661) 362-0800

edkentlaw@att.net

Insurance Defense Litigation/Personal Injury/Estate Planning/Trusts/Bankruptcy