Use of the Six “I’s”

We adjusters deal in a world involving words, the key ones of which begin with the letter ‘i’. The first is information. Adjusting is an information-based vocation. We have a professional duty to produce and use information in the proper settlement of claims. The vast majority of information does not exist in cyberspace; it exists because the adjuster investigates and produces the facts that must go into the file if the proper decisions are to be made. Those facts may involve the insurance policy wording, the statements of the parties involved in the claim, or the physical evidence.
.
The next word is initiative. We are not in a "fill in the blank" business. It takes our own initiative to get busy and find the information needed to evaluate and negotiate the settlement on behalf of our client. No one is going to do it for us.
.
But adjustment of claims also requires individualism,for each of us is different, and we must use our social skills and knowledge to obtain the correct information that we need.
.
This is also related to integrity,that sense of wholeness. The word comes from both mathematics and logic; an integer is a whole number. Two and two must equal four; if we try to make it equal something other than the correct answer, then it lacks integrity.
.
Insurance is often referred to as a business involving indemnification. That word is defined as "being made whole." Unfortunately, the reality of insurance claims is that the goal of indemnity is rarely met. No amount of money "makes whole" a fatal injury or permanent disability. The value of pain and discomfort, both physical and mental, cannot be calculated on a computer. But in some cases indemnity may not meet the definition of full recovery. Some coverages, such as full cost of replacement in property insurance, leaves the insured in a better position, while an "actual cash value" recovery and deductibles may reimburse only part of the cost to restore the insured or claimant.
.
Finally, we must consider the most important tool every adjuster must have and use daily – his or her imagination. We cannot evaluate a loss unless we can envision it, nor understand an insured’s or claimant’s situation without listening to that person and then imagining what the loss means to that person.
.
Adjusters must practice empathy, not necessarily sympathy, although that also has its role in a serious loss. Just imagine how you might feel if left in the same situation as the claimant or insured! Imagination is the key to understanding needs and fitting those needs into the first "i" word, information.
.
It's interesting to see how all six of these complete the circle of what we do...

Collections Made Easier

Are customers slow in paying you or not paying at all? Here are some ways to collect more of what is owed to you.

-A collection phone call is 10 times more productive than another billing statement.

-Call frequently. Calling once or twice a week is not harassment and is far more effective than monthly calls or invoices.

-When you call, always ask for payment in full, sent today. If you have to negotiate, it's best to start from the strongest position.

-If your customer is vague and offers to send "a payment" or "something on the account," tell the customer, "That's great, but we need to have a specific amount on a specific date." Then, ask for half now and the balance in two weeks.

-If you agree to accept multiple payments, ask for postdated checks to be sent now, along with the first check.

-Offer a discount for PIF--payment in full--today.

-When you get a promise to pay, confirm the amount and when it will be sent. Tell the customer you will mark it on the calendar three days from that date to let him or her know you'll be looking for the check.

-If you get no cooperation, say that you hate to turn the account over to collections, but you may have no choice. That tends to focus your debtor's mind, more clearly.

--by Leonard Sklar, collections consultant and author of The Check is Not in the Mail (Baroque, 1991)

Surving a Meltdown

IN AN ECONOMIC SLOWDOWN, small-business owners become more vulnerable, because they often do not have a great deal of capital to carry them through tough times. Susan Carlisle, a certified public accountant (http://www.carlislecpa.com/) from Woodland Hills, California, says “On the
other hand, small businesses are well positioned to become lean and mean. They can respond quickly to the changing marketplace.” She offers these tips.

.
1. Watch inventory and supplies turnover. If sales are slowing down, order in quantities that offer a discount.

.
2. Revisit accounts receivables regularly and send out bills more frequently. Consider giving bigger discounts for prepayments, CODs and cash. Offer to take credit cards instead of waiting for checks in the mail—especially to those customers who tend to need second reminders to pay.
.

3. Stay in contact with customers to make sure they’ll still be in business when your invoice arrives. You should be staying in contact with them anyway. Right?

.
4. On the selling side, customers purchase more basic items and cut back on discretionary items. If you sell only discretionary products, emphasize value.

.
5. Keep well-trained, good employees through the downturn. If you must cut back, offer to cut hours across the board instead of firing good people, as this will keep employees’ spirits up. It will also show that you care about your people.

.
6. Look at your fringe benefits. You may have to cut back on some of these.

.
7. Bring your bookkeeping up to date. Use it to budget for the year ahead.

.
8. Visit your CPA to do a tax projection now instead of waiting until April. She or he may give you some tax-saving ideas and change your estimated
payment schedule based on a projection for this year and the next.

Stay The Course

I have utilized other blogs in the past to discuss the importance of not allowing fear to control one's decisions, whether personal or business related. This has been a common theme and it remains true, especially in this day and time. With so much fear rampant in the world at the moment, I'm not going to add to the eloquent pleas heard from so many quarters to avoid the pitfalls of panic.

.

Instead, I want to put in a plea for vigilance. That's right, that may not be a word that often finds its way into corporate mission statements or discussions of personal finance at the proverbial kitchen table. But vigilance is an all-important characteristic for anyone wanting to avoid situations that result in panic. Why? I'm glad you asked...

.

Vigilance is about keeping your eye on the ball, as my old baseball coach was apt to say. It is about noticing the incremental changes around you that may be accumulating into problems. And, being vigilant requires discipline and consistency. Perhaps that's one reason it's not the most common of characteristics.

.

Conversely, if you are vigilant then you are in a better position to steer your course carefully from day to day, year to year, instead of waking up one morning to find that the company down the street that you never paid attention to is now your biggest competitor and according to your P&L sheet, it is kicking your backside!

.

Although you cannot lead a healthy life fearing negative outcomes at every turn, you can however focus on taking daily steps that you believe are the right ones, for building the future that you do desire. Only with vigilance, active observation and the considered action that can result from it can such a future ever have a chance of being realized. And realizing it, we must...

Critical Thinking, Part III

Whether intended or not, we all use strategies of communication that can be deceptive. A good critical thinker is one who can recognize those deceptive strategies in order to avoid errors in reasoning. Here are some examples which we will go over briefly:
.
Making things too simple. This means making something so simple that it actually becomes
inaccurate. For example, Susan says to you, “We have to put all of these things into claims captioned reports because the Regional Managers want to know everything.” The best way to respond is to point out any error in the logic and provide other evidence for a more complicated reason. You might respond with, “I doubt that they want the information just to be nosey. I’ve
seen where they use it to analyze the complete situation to help determine the correct path
we should take on the claim.”
.

Using facts that are irrelevant. This means using facts that really have no bearing on the issue at hand. For example, Brad says to Angelina, “The new Claims VP is going to change all of our contact standards anyway, so we might as well not bother trying to beat the old standards.” The best way to respond is to point out that the facts have nothing to do with each other. Angelina replies to Brad by saying, “Yes, the new Claims VP might change things, but that doesn’t mean we should abandon what we are doing now. The current standards are still
important.”
.
Making a case based on no facts to the contrary. This means to take a position based
on the fact that it has never been disproved. Sonny says to Cher, “I’ve never seen a better
way to prepare a coverage analysis, so as far as I’m concerned, this is the best process there
is.”
.
The best way to respond is to explain that although part of the statement is true, it does not actually prove the point. Cher might respond, “I understand that you have never seen a better way, but there could still be better that ways we just haven’t seen yet. I think we need to do a little more research.”
.
Making a case for the masses. This means trying to get an agreement simply because it
is the most popular. Phil says to Harry, “We should use that estimating system because most companies use it.” The best way to respond is to show a lack of support for the conclusion. Harry could reply, “That estimating system may be the most popular because it’s the cheapest, or has been around the longest. There may still be other systems that better suit our needs.”
.
Hopefully, these ideas will help you to drill down to the core of what case in point is being presented to you. Also, identifying the presenter's strategy will go a long way helping you decide what is the best way to proceed. Stay tuned for more on this topic.

Critical Thinking, Part II

Decision-Making:

Here is an example of decision-making that may have a negative result.

Your coworker, Jodie, says to you: "If you elect to extend or recommend coverage because of the nuisance value, then you can forget about any promotion. The Claim Executive hates giving in like that. Look what happened to Jill. She's been turned down four times in a row, now."

What is going on here? What questions come to mind about this statement made by your coworker? Here are some additional questions to consider when presented with this comment:

-Does my company (or my client's company) even utilize Nuisance Value determination(s) as a Lowest Ultimate Cost option?

-How much weight should I give this comment before deciding coverage or a recommendation of it?

Is NV an LUC option? Should I accept Jodie's statement and forget about considering NV? Is there a connection between Jill not getting promoted and her past practice of extending coverage for NV? What is Jodie's interest in this? The answers to these scenario questions may surprise you.

A clarifying strategy may be as simple as a phone call to the actual decision maker, to pose the question both directly and informally, before spending valuable time going through and writing the NV determination process.

Critical vs. Non-Critical Thinking

As anyone who has been successful in claim-handling can tell you, the process requires a special ability to make decisions. However, far too many claims people rely a little too much on their intuition to make those decisions and can often go astray due to the lack of critical thinking.

.

In fact, when polled informally, 50 percent of adjusters that I've queried say that they use very little formal critical thinking steps in order to analyze coverage, liability, or even the truthfulness of customer statements. In follow-up questions, 90 percent of adjusters could not even name a single formal critical-thinking step. An incomplete list is as follows:

.

-Make good decisions based on cautious reviews.

-Work through problems in detail to find the best answers.

-Stay focused on the real issues at hand.

-Apply critical thinking to your business writing.

-Apply learned skills to claims situations (e.g., coverage analysis, reporting, etc.).

-Utilize critical thinking when developing plans of action for claims handling.

.

In this multi-part series, I'll attempt to assist the claim professional by outlining some basic concepts when it comes to critical thinking. My goal with this particular article is to give you insight and cause to seriously think about these issues. So, if you find that you are in one of these situations or if you find yourself thinking that you should try to pinpoint the environmental factor(s) that cause these thoughts to arise, then you are correct. Everything begins with our thinking.