In short, NO!

In a recent episode of Last Week Tonight, with John Oliver, the issue of Automation was the ‘main story’

Throughout the segment, all I could think about is the resistance and push back that our company has received from the ‘legacy adjuster‘, thinking that we are trying to replace him/her.  

In that episode, Oliver did a much better job that I could of dissecting the transition from blue collar manufacturing to a more efficient automated workflow, requiring less and less human task, and replacing them with automated tasks.

Here is a chart from the Brookings Institute that illustrates the long-term trend. (Brookings Institute)

When looking at this graph I see the way that insurance claims process will unfold.  Increased overall efficiency with hyper specialized adjusters playing a critical, (non-replaceable role) as the conductor of this automated symphony.    

But if you look at the employment line, though it has reduced, it has not gone to zero.  It’s down by approximately 40%.

To the employer, that means cost savings.  To the adjuster, that means those who are good at their jobs, have indefinite employment.

Oliver pointed out that the jobs of the future will be ones that consist of ‘a series of non-routine tasks, that require social intelligence, complex critical thinking and creative problem solving’.  

If that is not the job definition for an adjuster, it should be!

So, the next logical question is… How?  

How do you increase productivity, while hyper-specializing our adjusters and continue to provide excellent customer service.

The answer, an integrated workflow solution that allows the adjuster to perform a series of non-routine tasks, that require social intelligence, complex critical thinking and creative problem solving.


If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.



The next 18 months are going to be pretty interesting for carriers, agencies, and purveyors of technologies for the insurance industry as a whole.

According to the One Agency Universe Study, these are the top 5 most important issues to address leading up to 2020:

  • IoT for commercial lines – 25%
  • Usage-Based Insurance – 30%
  • Sharing Economy – 36%
  • Client’s Cyber Risk / Data Security – 41%
  • New Insurance Products – 51% . 
–ia – jan 2019



It’s almost impossible not to predict the success of IoT(internet of things) in this space. If data is the new game, then connected devices are the vehicle by which this data is channelled.

The applications for commercial lines are vast, not to mention needed. One reason why IoT is so suitable for this sector of the industry is because there’s no as much a concern for privacy issues.

And of course with better data comes the ability for carriers to write better risk.

The thing to figure out for carriers is the value prop and how is it going to get packaged for small and mid-sized businesses.


Most of the applications for UBI (user based insurance) have been in personal auto. It’s funny because we’re giving Google an insane amount of personal information every day, yet consumers still don’t want to be tracked when it comes to these devices.

Check this resource out, but don’t freak about what you’re going to learn regarding your personal data, just absorb it! Same goes for Facebook by the way.

WARNING: You’ll never use your phone the same way again!

According to Forrester research, 33% of consumers say they are unlikely to purchase UBI, compared to 28% who are likely to purchase, and 21% who fall somewhere in the middle. But despite that level of interest, Carney says actual adoption of UBI remains in the 2-3%. 

–ia – jan 2019 – Ellen Carney, principal analyst, digital business strategy at Forrester, Inc.

The commercial side presents a less problematic application for UBI, especially in commercial auto. Nevertheless there are still too many unknowns for carriers to feel entirely comfortable with this tech.


THE SHARING ECONOMY continues to be a black box for carriers. Though currently limited to cars and homes, the sharing economy will continue to expand in the next few years.

We’re starting to figure out that we can leverage our assets to make money. The challenge is that none of these assets are currently covered, nor are there any products that can bridge the gap in risk in the marketplace at the moment.

Certainly there are all kinds of solutions that cater to the imagination on how to leverage these assets, here are a few:

  • – list your property for backyard camping
  • – same concept but for your RV or trailer
  • – a place where you can sell your surplus garden produce
  • – for local pet sitting options. Spend time with a pet without owning one!
  • – I’m sure you’ve used it already. But talk about disrupting the food delivery space.

This trend is here and is not going away, on the contrary. The question is –as it continues to expand how do you manage the risk?

Here are a couple of pretty nifty reports on the topic.

Of the twenty-seven reports on the topic I had time to review, these two have the most relevant info for P&C Carriers and the sharing economy :

 The Sharing Economy – Implications for Property & Casualty Insurers 

 Squaring Risk in the Sharing Age 


CYBER RISK AND DATA SEC is a topic most everyone is familiar with. Whether you’re Sony, Target, or just Johnny from New Jersey whose FB account was hacked, this is a problem for everyone!

Here’s an article that will raise the hair in the back of your neck on the 18th biggest data breaches of the 21 Century

FYI  –Of the fifteen hacked companies listed on the article, eight of them have MY PERSONAL INFORMATION… Scary!

According to Forrester research only 12% of small business purchased cyber coverage in 2017.

The biggest challenge in the cyber market is risk modeling, because it’s so easy to misprice due to poor understanding of the actual risk, and the fact that they are using actuarial assumptions based on professional liability insurance.

“There are a lot of carriers now that are chasing cyber business and they’re not necessarily pricing it appropriately, because they don’t fully understand the risks.” 

–ia – jan 2019 – Jay Sarzen, Senior Analyst on the insurance team at Aite Group


There’s a fast approaching demand for NEW INSURANCE PRODUCTS. As society continues to leverage the gig and sharing economy in addition to new home business proliferation, there’s already a massive gap in exposure.

Expect innovation in the microinsurance space, also referred to as on-demand insurance. We want flexible solutions to our risk needs, like travel insurance for a day, insure a piece of expensive equipment you borrowed for an event. There’s no limit to product-market matching in microinsurance.

This doesn’t mean that traditional coverages are exempt from innovation culture, on the contrary. If something needs to be innovated, it’s the legacy way of managing risks, like flood coverage options in the private market for example!

“Folks are still not getting answers from FEMA about Matthew, and that was two years ago.” 

–ia – jan 2019. Owen Thomas, Agent & Senior account Exec, Dial Insurance

Bottom line regarding these trends and issues  –The insurers taking risks in new product innovation which meet consumers at the point of demand, will be the ones that will, hands down, become blue ocean companies in the next decade.


*Content sourced from the printed version of – ia – jan 2019 article titled “Wish List 2020What Emerging Issues and Trends Do Carriers Need to Address in The Next Two Years? – written by Jacquelyn Connelly.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me or David!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.


When talking about these hidden industry costs, the thought going through your mind may be that of an unscrupulous contractor packing a mitigation loss site full of equipment beyond written industry standard –with the intention of maximizing his daily rental profit.

Though not unlikely, this scenario only describes part of the problem. For example –equally important to consider is the possibility of a contractor who might install TOO FEW pieces of drying equipment.

In any case, you end up with an inefficient and poorly managed drying program.

The result will be missed deadlines and costs overruns.  And since the vast bulk of a mitigation invoice is made up of the costs of equipment rental –guess who gets stuck with the bill…

That’s right –the Carrier!

In this article I’d like to cover the most common causes of unnecessary costs of water damage mitigation, and how to avoid them.

So, let’s start with…


Not all contractors invest time, money, and training to ensure they’re providing the most efficient drying programs to policyholders.

For example, the difference between a mitigation contractor who uses infrared thermography to monitor losses and one who only employs moisture meters is huge from an outcomes perspective.

Equally as important, is the difference between the mitigation contractor who TRAINS his/her technicians on how to properly interpret what an infrared camera is showing them over the contractor who doesn’t!

These gaps in tools, tech and knowledge allow for a wide range in drying results –in addition to the potential risk for secondary damage, like mold for example.

If you’re hiring a water damage mitigation contractor, what are some questions that you might ask to ensure you’re getting a company that values the latest tools and techniques?



Any reputable mitigation contractor backs his drying program results up with empirical data, compiled into what is referred to as moisture mapping.

And this seems all well and good, but how is the accuracy of these numbers verified?

Even among well established nationally franchised brands, mitigation contractors can and do manipulate some of these numbers in order to show a linear and effective dry down –whether that was the case on a particular loss or not.

Furthermore, it’s seldom the case when the carrier and their adjusters have any significant grasp on what the numbers on the spreadsheets sent to them really mean, and/or how to interpret them.

This lack of oversight process, coupled with once again, a gap in knowledge –is costing carriers millions of dollars in unnecessary water damage mitigation costs.

To the consumer: Plan ahead, always be prepared to ask a water damage mitigation contractor to supply you with a copy of their daily drying logs.

To the carrier: What are some instances you can think of where you could have prevented supplemental damages if you had managed to have more oversight of a policyholder’ mitigation contractor?



While most of the industry has adopted the use of estimating software (MergeXactimate, Symbility, etc) which has positively reduced most of the billing inconsistency in unit costs for services & equipment, there continues to be substantial inefficiencies at play.

These inefficiencies are mostly due to line items written by the contractor that are either used in duplication, or incorrectly.

One example of this would be when billing for laminate flooring removal. Xactimate factors-in the removal of the underlayment of the flooring as a separate item in addition to original line item. And even though it’s clearly written in the explanation of the line item, it’s often overlooked –and an additional line item is written and billed for removing the underlayment separately.

While these types of oversights are typically small charges at the individual claim level, they stack up quickly; particularly when viewed broadly across all claims.

Quick math: As an insurance carrier, if each of your mitigation related claims had $50 of duplicate charges per affected area and you averaged 4 affected areas per claim…….how many dollars per year are getting wasted in small charges across all claims?



The Institute of Inspection Cleaning and Restoration Certification (IICRC) is the de facto standard in the writing of standards for the mitigation industry.

The standards the IICRC write cover everything from equipment sizing equations to the salvageability of different building materials affected by water. And while there is always room for professional judgement on a loss, there are many occasions when standards are simply overlooked or misinterpreted.

This causes inefficient drying conditions and secondary damages to property or cross-contamination of previously unaffected areas on a loss.

Creating more user-friendly applications that adhere to standards is an area of focus that would benefit the insurance industry at scale –while also providing knowledge driven oversight to guide more strict adherence for contractors.  

To the consumer: Always ask your water damage mitigation contractor to supply you with their technicians IICRC qualifications, and make sure that only technicians carrying “WRT” certifications are in charge of your property.

To the carrier: Are there ways for you to more efficiently manage standards compliance in water damage mitigation to catch potential problem losses, BEFORE they become problems?



It’s easy to lump every mitigation contractor in the category of a bad apple.

The stereotype of greedy carpet cleaner comes to mind, and frankly this mindset affects the decision making processes of adjusters throughout the industry.

It is certainly true that there are some contractors who manipulate and overcharge for their services, but these are not the majority. Often overlooked is the contractor who makes mistakes of omission, due to lack of training and/or knowledge.

Even though acting in good faith, these vendors’ mistakes of omission can be equally damaging –such as improper mitigations leading to replacement costs of items that should normally be salvageable, drying times that exceed all normal expectations, and a host of other secondary issues.

It’s in the carriers best interest not only to weed out the bad apples, but to focus also on what might appear to be “cheap” vendors on the front end  –that are ultimately MORE expensive on the back end.

What are some ways that carriers and contractors can build more symbiotic relationships versus adversarial?



Removing unwanted moisture from a building is a matter of physics.

Phase changes of matter, vapor pressure, grains per pound, relative humidity and temperature  –these are all just a few of the elements making up the juggling act that contractors are performing to get water to displace from one area to another.  

A deep knowledge of how and why a mitigation program completes its objectives is essential to finding contractors who make good decisions quickly and efficiently, particularly when drying challenges arise.

Unfortunately, these contractors are not easy to find. Most of them don’t possess the background knowledge of the science of drying. My suggestion is to thoroughly  interview them and review their past work.

Here are some question you should ask and details you should be aware of…

  • Ask your water damage mitigation contractor what their drying plan is, before they start it. Many times you can sense a knowledgeable contractor by listening to them lay out their strategy.
  • Pay attention to the cleanliness and/or condition of the drying equipment that a water damage mitigation contractor installs on a loss. If they don’t treat their equipment well, they won’t treat your property well.



It may be easy to blame mitigation contractors for any and all associated cost overages caused by water damage, but carriers are no innocent bystanders either.

Generally speaking, carriers’ attitude toward the mitigation industry default somewhere between uninterested and apathetic.

Carriers routinely pay out on inflated invoices because they don’t know how to contest them. They also underpay reputable and honest vendors causing working and relationship friction, and inevitably future invoice inflation. This cycle repeats itself from claim to claim without anyone challenging its process.

A more proactive and caring role is needed by carriers if they want a more predictable and equitable playing field when it comes to their water damage related costs.

Most water mitigation cost overruns are not only avoidable, but one hundred percent preventable.

What are some best practices you can think of for insurance carriers to be more proactive in making sure that their receiving excellent service and appropriate pricing?

Hopefully I’ve given you a few guidelines that will help you mitigate some of the hidden costs of water damage restoration services.

My hope is that you build on this, and ultimately develop your own water restoration vendor QA system!

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me or David!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

Marketing is about communicating value.

In today’s world where the average person gets bombarded with around 5,000 ads per day, we must be acutely aware of what is it we want to be known for.

In a world where attention is the number one commodity, being remembered for something special is a competitive advantage.

The way to do this is to talk less about our product and more about what are core values are in the context of who we service. Because that’s what people will remember.

Markets change, strategies change, brands pivot, and technology evolves. What shouldn’t change are your core values.

We’re not just about creating software that reduces claim cycle time, and increases claim handling efficiency for carriers, even though we do that very well. We’re about more than that…

We believe that people deserve to be HAPPY and reassured about the choices they make in life, specifically about the companies they put their trust in. In the business we’re in, it’s our job to prove them right!

We believe that a claim is a carriers chance to deliver on their promise. But delivering on the expectations is no longer enough.  The carrier must exceed the customers expectations.

This is where the battle is being fought, for hearts and souls. This is what will separate the carriers of today from the carriers of the future.  

Our mission is to get you there faster.

We don’t believe in the “you fake it till you make it” school of thought.

You have to be honest about who you are and what you stand for. And if you don’t know what that is, stop, search your WHY, and then get back out there and share your values.

Until then, don’t pretend to be something you’re not.

And by the way, there’s nothing wrong with not knowing what you stand for, it doesn’t make you a bad person or company, just makes you irrelevant to the marketplace.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

There is a hundred-year storm brewing, and it’s sitting offshore, just a few miles from where you are. Its impact will be imminent and direct.

Sadly few will survive it. But those who do will also thrive, primarily because of two things.

ONE, they read this blog post 🙂

TWO, they re-read this blog post, took action,  and shared it with their colleagues in the industry.

Here’s the problem…

Millennials are indifferent to all-things insurance.

In insurance, you often hear the term thrown around, “a hundred year storm”, referring to an adverse event that statistically only happens every 100 years or so.

This may sound like an apocalyptic view of the issue, but insurance is among the industries with the lowest appeal among millennials today.

That should scare the crap out of people in our industry!

The adjuster shortfall experienced after the recent storms pales in comparison to the perfect storm of adjuster deficit that’s slowly brewing and approaching the daily claims handling process in the next two decades.

The statistics are scary:

  • Average age of an insurance pro in the US is about 60 years old.
  • The number of insurance pros over 55 has increased by 74% between 2002–2012 compared to 45% in overall workforce (McKinsey & Company Building a Talent Magnet)
  • There’s 80 million Boomers, 60 million Xers, and 80 million Millennials. That 25% difference with so few Xers is a huge deal
  • 88% of CPCU members are over 40 years old.
  • Only 41% of millennials expect to be at their current job in 2 years.
  • Insurance companies expect 25% of retirements in the next 4 years.
  • Only 2% of recent grads express interest in the insurance industry (Accenture — The Insurance Workforce of the Future).
  • 66% of Millennials plan to be at a different company in 3 years (2016 Deloitte Millennial Survey).
  • By 2014 Millennials were already largest generation in the US (Council of Economic Advisers)
  • By 2025, 3 out of 4 workers will be Millennials (
  • Only 4% of Millennials are interested in working in Insurance (The Hartford — A Generation of Leaders).

But now that we’ve had the foresight to identify the problem, we need to fix it.

Here are a few ideas we are implementing at TelaClaims.

Let’s start by asking the right questions.


Why are millennials turned off by insurance?

It is well documented that insurance has an image of being stiff, boring, greedy, and exclusive.

Not exactly the kind of profession you’d have lots of fun on a regular Thursday.

These are exactly the sorts of characteristics  millennials tend to avoid in a workplace.

They want to work around arts & entertainment, education, technology, and healthcare.

They want work/life balance. They want to enjoy their work environment.

A cubicle is not a desirable environment for them.

Again, it presents as a rigid, formal environment, millennials don’t want ANY part of IT for ANY period of time.

The previous generations, such as baby boomers such as myself, we had a different perspective.

We figured that as long as the job supports your family and you did your job, you are a successful person.

It doesn’t matter if you are a businessman or a janitor — your paycheck justifies the fact that you spend much of your time doing something that you are not emotionally drawn to or even invested in some cases.

Millennials, on the other hand, don’t see it that way.

Boomers like me have always been willing to exchange time for money. Millennials, on the other hand, want a job that is fulfilling in and of itself.

Millennials need meaning from their work, more than almost anything else.

Insurance as an industry, has failed to give meaning to purpose, even if the work done is important and needed by many all too often, especially after a loss.

It is our role to change that cultural perception.

The claims process needs to be treated like an urgent care.

You first come in and you get triaged, stop the bleeding, and then get stitched up. Adjusting is not very different at all.

You had a terrible plumbing break in a wall, upstairs and a serious leak, the water is still flowing and your belongings and family possessions are being ruined. You call your insurance carrier.

A claims professional will need to assess the situation (triage) and stop the water (mitigate), send in mitigation experts (stitches), get the home dry and cleaned up (stabilize) to the then see how we can fix it using the terms and benefits contained within your policy for the home (recovery and follow up).

Millennials’ interactions with insurance are relatively brief and, if something does come up, it’s usually bad (newspaper articles about shady agents, horror stories from friends, etc.)

They also tend to pay higher premiums when they’re younger, so they’re likely to have an unfavorable impression from the onset.

We need to start to re-frame the narrative. We need to re-focus on what insurance really does. And we need to deploy lots of empathy, especially when dealing with a group we don’t understand very well.

Focus on what insurance does for communities and families.

Insurance already has a huge impact, they just don’t know it.

We need to draw more attention to that by giving detailed descriptions of how people were helped.

I don’t mean it in a salesy way, because Millennials can smell a sales pitch from miles away.

But by providing human interest stories that showcase the impact on quality on life for families and policyholders. 

Encourage employees to be vocal about why they like their job/Give them a sense of purpose.

Provide employees a Twitter hashtag, encourage them to submit stories to be featured on the company website, and also share these with other employees in the company.

At TelaClaims, we encourage all employees, millennials, GenZs, Genexers, and Boomers to share their experiences on social media.

I can’t wait to hand things over to them in a few years knowing full well that I in a small way helped to pave the road for that much needed change.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me or David!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

Let’s face it… video is generally a better medium to tell stories than text and pictures. Video brings a moment alive, gives it context, emotion, and color.

We would even argue that video in its original format provides a truer version of actual events, because it’s now replicated in its true form.

Video combines multiple senses, visual and auditory, which makes for a more wholesome experience, which can impact the quality of insights and therefore meaning.

But this post is not about just video, but how video can impact the claims process in a more qualitative way.

If you’re interested in a deep dive about video as a way to best engage overall, check this post out.

But for now… Enter Big Bertha!

The biggest green screen in South Miami.

A place where stories about helping people in need get framed, created, and ultimately produced for the adjusters and examiners responsible for making important decisions about homes and families.

We also use Big Bertha to film our Learning Management System (LMS) series for inspectors, vendors, and adjusters.

Human capital is at the core of everything we do. We’re only as good as the people we work with. The better trained they are, the bigger the impact on the communities carriers serve.

Here’s a quick video of what happens here on a daily basis… Enjoy!

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me or David!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

Where do I start!

A project of our scope is built by so many people. It’s tested by even more people, and finally adopted by even a greater bunch of smart users.

I’m eternally thankful to everyone individually.

From our team of engineers who so many times have worked around the clock to meet a deadline, go home, shower, then come back to work on more code.

I’m thankful to the Heads of Claims, VPs, Directors, and Managers at the carriers we currently partner up with us.

These men and women believed in us from the start and embraced what we believe… That a claim is more than an event. It’s an opportunity to deliver on a promise and positively impact the world while making good on it.

To the adjusters, inspectors, and vendors who chose to affiliate themselves with us, even when so many of them had never worked with us in passed CATs.

I’m especially thankful to the policyholders, for being courageous enough to try something different and give us feedback in the process.

And finally I’m thankful for all of you… the listeners of our podcast, and followers on our Instagram and Twitter accounts. Thank you for engaging with us, for the likes, hearts, the comments and suggestions. Thank you!

Happy Thanksgiving,


If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

Neither would I.

But if you are not updating or editing your case reservingthat’s exactly what you’re doing, flying blind.

Let me explain,

Many carriers’ current process to update reserves has been a rarely modified. 

Static case reserves lead to wild swings in claims reserve numbers.

Inflated catch-all IBNR’s, and a general lack of reserving accuracy cause claims to spiral out of control.

As with most things, the devil is in the details.  Reserving is no different.

While a very large company can over the course of time, average the numbers out, this approach is far from ideal.

But how do you set an accurate and case specific reserve at FNOL, plus track those changes over time?

Easy. By leveraging a multi-channel communication platform.

The result?

A reliable prediction of claim trends.  And an automated cherry-picking process for those specific claims that need to escalate.

We know claims reserving is a point-in-time representation of all claims, plus IBNR.

But the lack of granularity of those reserves leaves carriers way too exposed.

It’s not about the accuracy of reserving point in time quarter to quarter.

It’s about monthly, weekly, and hourly reserves that are accurate.

Think of your bordereaux. No more adverse developments.  The changes in total exposure are accurate in ‘real time’.  

It is for this reason that reserving is not buried 12 screens deep in our software. It’s omni-present throughout.

As new information comes in, reserves get adjusted.  As information streams in real time, so do your reserves.

Minor reserve adjustments in any direction will occur.  

But these deltas allow us to track outliers. Now we’re ready to escalate claims faster and more accurately.

So if you must fly, do so in good weather and with the best instrumentation possible.

The trip will be much more enjoyable than the white-knuckle ride you’ve been on.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

Happiness has been the topic of continuous study, research, and general interest in the last few years.

In his book, The Happiness Equation, Neil Pasricha observes:

“But after years successfully helping people lead teams, lead businesses, and lead organizations, something slowly dawned on me.

Hardly anyone was happy.

Every conference lunch was filled with conversations about struggling to find balance, feeling too busy, and keeping up with others. So many leaders said they didn’t have space in their lives, were stressed about time and money, and felt burdened with endless decisions and conflicting advice.”

But what does happiness look like for the insurance industry?

One thing for sure, it can’t be just a one sided happiness scenario while the other is bitter and frustrated.

How can the industry turns its biggest fears into its biggest successes?

Here’s a simple formula from The Happiness Equation:

A never ending loop ensues once you’ve dropped the mental barriers that block your creative and innovative drive.

I believe that necessary to achieve this, at the center of it from a Carrier’s point of view, is the sincere belief that they’re there to provide a service when required for their policyholders, and not the other way around.

In other words customers are not there for carriers. Carriers are there for customers.

Building a happy client or customer base is the only way to ensure a strong and thriving hundred year plus business.

A satisfied client, just like a wife or husband, doesn’t look for options elsewhere.

And as Seth Godin recently put it:

“If you want to create satisfaction, the two elements are:

Make useful promises
Keep them

Price is unrelated, except for one thing:

Charge enough that you can afford to actually keep your promise. The thrill of a low price disappears quickly, but the pain of a broken promise lasts a very long time.”

An interesting piece of advice for carriers isn’t it?

Being that an insurance policy is a promise. And the part about keeping that promise is what carriers specialize in, which is the Claim process.

I believe happiness in the insurance industry is defined as a claim being successfully handled and happily paid by a carrier … While the policyholder moves on with his/her life, stoked with the speed and quality of the service provided and telling all their friends about it.

It’s really that simple.

The rest is noise, misprioritized tasks, and poor execution on the things that matter most.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me or David!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.

At this very moment you are chasing thousands, or maybe even hundreds of thousands of ULAE dollars, all refusing to be hunted and tagged back into ALAE territory.

These clandestine dollars are experts in finding ways to stay undetected by even the most sophisticated insurance financial tracking systems in the world.

Every time I hear someone reference a ULAE, I get a slight nauseous feeling in the pit of my stomach.

Because unallocated means unmeasurable. Unmeasurable translates to unmanageable. And unmanageable means, “I don’t know where the money’s going!”

But let’s first define a few terms and make sure we’re all on the same page.

All claims have two primary exposures: Indemnity and Expense. 

Indemnity, of course are all payments made to the insured for the sole intent of returning the insured to their pre-loss condition.

‘Indemnification’, hence, the indemnity payment. Now many of these payments can be further broken down, but for the purposes of our ULAE conversation, let’s concentrate on the expense side of the equation.

The other payments that are made are ‘Expenses. These are any and all expenses incurred in the process of adjudicating the claim.

These expenses are broadly referred to a ‘LAE’ or ‘Loss Adjustment Expenses’.

LAE can further be broken down into two categories. ALAE and ULAE. 

ALAE or ‘Allocated Loss Adjustment Expense’. This is good loss LAE (to the extent that any expense can be good).

Allocated here means that any expense that can be attributed directly back to any one claim. Example, ABC Insurance Carrier hires an independent adjuster to handle a claim.

That adjuster submits an invoice for that one claim. That expense is ALAE. It is allocated to that ONE claim. So ‘A’ is allocated in ALAE, that means that the ‘U’ is unallocated. In contrast, ULAE is ‘Unallocated Loss Adjustment Expense’.

For that example, the claims department of XYZ Insurance hires 10 adjusters on salary to handle its daily claims in a metro area. They handle whatever claims come across their desk, and their claims expenses are usually booked as ULAE.

Adjusters need to be paid, and heretofore XYZ would have just booked those salary expenses as ULAE.

It is easy enough to calculate the true claims handling expense on those files, (salary/number of claims=costs). But that calculation is not showing the full picture, there are other soft costs that may or may not be loaded into that simple math equation.

Moreover, there are other expenses that are so minor that it doesn’t make practical sense to allocate them to the claim.

An example of these expenses would be weather reporting services, satellite services, postage expenses or ITEL reports.

All of these services are valuable, they all add to the global understanding of the claim and the position that the carrier needs to take on any number of issues, but their costs are generally rolled up and booked as ULAE.

So if you’re looking for the effectiveness of any one of these services, how do you begin to measure that?

Some anecdotal examples where the policyholder thought their builder grade carpet was a hand looped wool Berber and the ITEL report provided the analysis to refute and stand on the actual cost for like kind and quality?

The EagleView report showed the roof is 24.54 actual squares rather than the 29 that the roofer is claiming!

Each of these are impactful and justify the service, but again the question remains… How do you manage when and where to use these services?

The Solution

By having consolidated ALAE invoicing with each of the microservices, the claim expenses then becomes reportable, actionable and therefore manageable.

While accepting the mission to eliminate ULAE has been a daunting task, the impact has been equally rewarding.

By affording every qualified vendor a platform to reach the desk adjuster and provide single sign on microservices requests, the quality of the underlying claim has benefited.

The accuracy of the indemnification has become far more precise and due to transparency across vendor-to-policy holder, consumer confidence in the process has skyrocketed.

We pay NOW! 

This is the other differentiator to the carriers and vendors. Upon completion of their service; we pay the vendor up front and wait for the carrier to repay us for their services.

The time it takes a carrier with all of its moving parts to get a vendor paid, added to the costs for that vendor to perform its services drags too long and requires unnecessary human intervention and follow up.

Therefore, the carrier is getting little value because of the multiple deadspace points between service provided and monies paid to the vendor.

So by fastforwarding payments to vendors we’ve eliminated those issues.

ULAE is complex. Providing services to a geographically diverse group of policyholders is complex.

Most vendors do an amazing job and work very hard to partner with the carriers to perform their respective services. By eliminating the friction in the process, we are allowing the carriers the ability to better manage their vendors and their services while simultaneously allowing the vendors the ability to focus on what they do rather than getting paid.

We look forward to extending the conversation on the topic.

Your thoughts and comments as we continue to strive to make the claims marketplace as efficient as possible, and increase the carriers’ confidence that their goal of indemnification is being accomplished; is extremely necessary and welcome.

If you would like to know how our innovative claim process can help you make effective real time decisions, maximize control and minimize costs relating to your claims. Click here to schedule a brief chat with me!

Would love to know your take on the topic, if you’d like to chat, once again you can set up a time right here.