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Claims Changer

When dealing with complex claims started to eat into producers' time, JDIMI president Bob Jones launched a claims handling department and has been winning clients since

Claims management is how clients ultimately judge an insurance broker. It’s a simple statement, but one that can sometimes be forgotten when dealing with complex claims and stressed clients.

However, Robert Jones (or “Bob” as most know him), president of Jones DesLauriers Insurance Management Inc. (JDIMI), an Ontario-based brokerage with six offices, annual revenue of approximately $35 million and one of the “largest privately held insurance firms in the nation,” says how you handle claims is the most critical component of any insurance program, and it affects the reputation of the broker.

As JDIMI grew, so did the sophistication of insurance coverages required by its clients and expectations of delivery, says Jones. Eventually, he found that the firm’s producers and account managers were spending a disproportionate amount of their workday dealing with claims matters that “were complex and outside their comfort zone,” he says.

“They did not have the relationships with the claims departments, adjusters and vendors that are required to be effective and efficient. D&O, fiduciary, E&O and complex property and liability claims would be successfully negotiated and settled with the insurer. However, it was taking longer and straining the resources within our organization.”

To deal with the problem, Jones set up a dedicated claims department that would handle all claims, large and small, giving special attention to the larger complex claims of JDIMI’s varied commercial clientele. The goal was to offer its clients an improved level of service around claims and provide support for brokers on smaller claims issues.

In January 2010, Mark Watson was brought on board as vice-president of claims to oversee the ClaimsPro Assistance team. Previously, as senior vice-president of claims at an international insurance brokerage, Watson gained experience in claims handling and loss control.

Now, a client can call or email to report a claim 24 hours a day, seven days a week. The JDIMI team will address the claim and customize a claims reporting process for the client, such as how to deal with the insurer. For large claims from high-retention clients, the team may suggest engaging a third-party administrator, such as an independent adjuster.

Watson stresses the importance of reporting the claim as quickly as possible, appointing a third-party expert if needed, and ensuring the client is fairly paid and the policy responds to their needs.

This is especially important in today’s difficult economic environment when insureds are fighting for every dollar they can get, comments Jones.

“It is our role to advocate for the client to ensure that the policy responds to its full extent while also supporting the insurer and helping manage the client’s expectations,” he says.

Open Communication

Jones believes the foundation of effective claims handling is open and honest communication with all parties, which enforces healthy relationships and keeps business growing.

“The development and maintenance of a strong claims relationship with the insurers, adjusters and vendors are extremely important because client satisfaction through a claims experience can be the beginning or the end of the relationship,” says Jones.

The company continues to maintain strong relationships with JDIMI’s partner markets and claims service providers. This is achieved through a technical broker claims team, regular meetings with senior claims executives at insurance companies, adjusters and vendors, and developing claims reporting and claims management protocols for clients to ensure the efficient flow of claims information to the broker and insurer.

Since the broker is the mediator between the insurer and insured, they should maintain the relationship and be upfront with clients about any concerns regarding policy coverages, says Watson. In fact, identifying issues, such as coverage exclusions, and overcoming them is one of the biggest challenges in managing claims.

“Some brokers are scared to address these issues with the client because they’re not sure what the client reaction will be,” he says. “But it’s more effective if you’re upfront with them, and you identify what the problems are quickly instead of letting them fester.”

He adds that when a claim occurs, brokers should remember that it’s a very stressful situation for the insured–one they’re not accustomed to dealing with–so addressing issues quickly will further help alleviate their stress.

Watson recalls a case where he met a potential client to discuss an ongoing claims matter. The client was upset with the support they were getting from the current broker on the claim. Also, the insurer was denying the claim due to insufficient coverage.

Mark Watson vice-president of claims JDIMI

Once the client moved the account to JDIMI, the ClaimsPro Assistance team went to work to provide a full defence and argue the client’s case. They selected a specialized lawyer to investigate the claim.

“We had to get the approval from the insurer on that,” says Watson. “The rate [paid to the lawyer] was higher than what the insurer would pay, but we got them to agree it was necessary because it was a specialized claim.”

Further investigation found the claim had a D&O aspect to it, and JDIMI was able to get the client additional coverage under the policy.

“Our claims team successfully resolved the coverage issues and the client received full payment from the insurer,” says Jones.

Watson’s approach with all claims cases is to look at the circumstances of the specific claim, apply the coverage, ensure the right third-party experts are in place, and manage all parties through open communication to make sure there are no last-minute surprises.

JDIMI’s experience with claims handling demonstrates how critical it can be to client retention.

“On a number of occasions because of the direct involvement of our claims team, resulting in resolution of claims issues, our clients have stated that they did not conduct an RFP or did not entertain another broker’s advances because of this service,” says Jones.

Moreover, an effective claims handling strategy can be a business builder going forward.

“Our V.P. of claims regularly attends targeted prospect meetings and all of our marketing materials outline all of our value-add propositions, including claims advocacy,” he adds.


Tips

  1. Report the claim as quickly as possible.
  2. Identify claims issues and whether the coverage is sufficient. If there are coverage issues, do not be afraid to discuss them with the client.
  3. Ensure you have a good relationship with your insurance partners, independent adjusters and are an advocate for your client. Have excellent communication with all parties during the claims process.

Company Stats

Established: 1952

Annual revenue: approximately $35 million

Locations: Toronto, Cambridge, Belleville, Ottawa, Brampton, Collingwood

Staff: 200+

P&C business: 20% personal lines, 80% commercial lines

Commercial lines: transportation, surety bonding, construction, real estate, manufacturing, franchise, professional liability, risk management


Copyright 2011 Rogers Publishing Ltd. This article first appeared in the January 2011 edition of Canadian Insurance Top Broker magazine.

Transcontinental Media G.P.