NASP 2009 Annual Conference Management Potpourri Caryn Siebert Carl Warren & Company Chris McPadden Travelers

Scenario #1 Your Chief Claims Executive asks to meet with you to discuss the recent results of your subrogation centralization efforts. You have been contacted since you have a unique view of the company’s total claims operation. Since you are receiving files from all units, you have the opportunity to see and review every unit’s work product. The company has a lot of young staff and recognizes that turnover is increasing; claims staff is younger than at any other time in history. You are asked what trends you are seeing that could negatively impact subrogation and what you can do, from a big picture, to correct any such trends. Is this an appropriate role for the subrogation department? Does this type of corrective action have potential to create a conflict with the front-line claims operations?

Scenario #2 You have been asked to work as the subrogation department chair. You and your team have been asked to develop a program for your line claim operations in order to help them better understand the importance of subrogation. To begin, you determine it would be beneficial to conduct some interviews with claim representatives and unit managers from your line claim units. In the course of these discussions you are repeatedly told that line units simply don’t have time to deal with subrogation. You are told that priorities are returning phone calls, paying claims, and answering questions about first-party portions of the claims they hadle. Subrogation is simply something that has to wait until the first-party claim is handled to a conclusion. One of the most repeated phrases heard in these discussions was, “Besides, I’ve got what I need to pay the claim, that’s the important part of the process and what really matters, isn’t it?” As your team discusses the results of these interviews the question arises, do our front-line claim operations really understand the “danger zones” in today’s subrogation environment? What are these danger zones? What do we need to make our front line people understand with regard to potential danger that may exist if subrogation is not considered at the onset of the claim? What circumstances affect these issues – large deductibles, shared objectives, subrogation metrics?

Scenario #3 You have hired a new director for your company’s subrogation department. Things are going well, but in a recent visit, your new director has expressed some concern about inconsistencies among units, especially in the selection and management of subrogation providers/vendors. There seems to be little rhyme or reason as to how certain vendors were approved, and when searching for data that might lend some clarity regarding vendor performance, the director learned there was no such data available. It was noticed that certain vendors were utilized more than others, and some vendors, while still shown as active on the companywide list, in fact had received very little or no work over the last twelve-month period. The unit/team managers seem to have very little or no contact with these particular vendors. Your newly appointed director suggests that the company has to do a better job in creating effective vendor relationships and asks for your input. How can we manage vendors on a national basis that we may have never seen or met?

Scenario #4 Your company’s catastrophe claim operation does an outstanding job of getting to the site and handling the claims promptly and efficiently for your insureds. The focus has been on putting people back together and helping them regain their lives. You’re extremely proud of this. At a recent catastrophe site, the team handled the claims efficiently and quickly, and as a result of their tremendous efforts, the feedback from your insureds was excellent and the operation was closed in a relatively short period of time. After the operation had been shut down, a call comes in to you from a concerned insured who asks whether the building codes had been appropriately followed in the subdivision where the storm hit. The neighboring subdivisions didn’t experience near as much damage, and the wind patterns seem to indicate that those neighborhoods experienced the same wind speeds. The insured asks if there is any way that the builders would be held responsible if it could be proven that building codes had been violated. Then the insured asks “is your company doing anything to pursue collection efforts against builders?”

Scenario #5 XYZ Company is a major manufacturer of a product that is found in many homes in America. You have just reviewed data indicating this particular product appears to be the root cause of many claims being presented by your insureds. Some line claim units have properly investigated the claims, appropriate experts have been hired and testing indicates there is more than reasonable proof that the product manufactured by XYZ is indeed defective and the cause of the losses. XYZ is taking a firm denial stance. They are refusing to consider the information your claims people are presenting. Through your relationships with other professional associates, you realize that other insurers are also seeing the same trends with regard to products manufactured by XYZ. Your company’s experts inform you that XYZ is taking the same position with other carriers. As you consider this situation, you question whether there may be some way that the industry might not somehow share information for the benefit of the insurance buying public and aggregate the claims with regard to XYZ Company? What issues are important as you consider this matter? How are you going to share information within your company so the right hand knows what the left hand is doing?