Tag Archives: documentation

How to Tap Value of Smart Glasses

Many P&C carriers are realizing the value of smart glasses for claims management, underwriting and training but are struggling to successfully implement the technology.

Smart glasses enable features like hands-free video and streamlined documentation that improve an adjuster’s efficiency when responding to a complex claim. But, even though 81% of CIOs believe wearables will eventually enter the workplace, integrating the technology past the “science experiment” stage is a challenge for many carriers.

An organizational commitment to robust connectivity and security fundamentals are sometimes daunting prerequisites to a successful wearables program, but the biggest obstacle isn’t technology-related; it’s change management.

This guide provides implementation best practices built from successful deployments. These strategies illustrate a “validation-to-
production” road map to scale smart glasses technology within your systems.

See also: Wearable Technology: Benefits for Insurers  

You will also learn which technology features provide immediate out-of-the-box value and which to defer until you’re fully scaled.

Whether you are already running a validation program or doing research for future implementations, this guide covers how to overcome pitfalls, identify essential members of a project implementation team and generate return on investment (ROI) faster.

Common Obstacles

Surveys of carriers exploring smart glasses revealed that nearly every unsuccessful implementation came down to three factors:

  • Scope Creep: People are often blinded by the “cool” factor of emerging technologies. They stop thinking in practical terms and instead specify outside-the-box features that are unrealistic or cost-prohibitive for a pilot.
  • Slow Decisions: Carriers that succeed with smart glasses are the ones that test, measure, interate and move fast. You should evaluate challenges and test solutions as soon as possible rather than agonizing over options.
  • Team Alignment: Successful implementation requires continuing collaboration among project management, the executive team, IT and end users, as well as any external stakeholders, such as customers, who may be affected.

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The Vuzix M100, pictured above, is one of the many smart glasses capable of delivering value from day one. Visit our smart glasses comparison for more details on wearable devices from Google, Epson, Vuzix and ODG.

Features Your Pilot Should Include for Rapid Value

Risk-control skills are in high demand, and senior risk auditors dislike heavy travel requirements. The features listed below help major carriers use remote collaboration to reduce travel for senior risk controllers while simultaneously training new adjusters and risk control auditors.

      • Video Collaboration: Simultaneous two-way video and audio allows experts to remotely assist front-line workers any time, anywhere, on-demand. Workers can broadcast live video feeds to allow the expert to “see what I see” for troubleshooting, training, supervising, inspections and more. Enterprises have paid for their wearables validation program in a single day from travel savings alone.
      • Annotation: Field teams can capture images and send them to back-office experts for review. The back-office experts can then mark directly on the images, make notes and upload those annotations directly to the field teams’ smart glasses in real time.
      • Documentation: Insurers in the field can save valuable time per job by using smart glasses to upload captured audio, video and images to the cloud.

Who Should Be Involved?

We often joke that every major carrier has a pair of Google Glass sitting on a shelf somewhere. Someone from IT typically procured those smart glasses with the best of intentions, but simply ordering hardware without an implementation plan or assigned project roles will not generate value.

Implementing a disruptive, innovative technology requires overcoming people’s inherent resistance to change. A project management team, which includes consistent and visible involvement from senior leaders and a communications plan, are the first steps to successful change management.

See also: The Case for Connected Wearables  

Decisions should not be made in a bubble or based on a bare minimum of heavily filtered information delivered to senior leaders via status reports. The executive team should have a keen understanding of project deadlines to provide guidance and remove roadblocks for the project management team.

In our experience, a successful implementation team includes: a project manager, a technical expert, an executive leader, an end-user manager to champion the project and a customer success manager provided by the technology vendor.

Rarely is technology the roadblock between idea and value. Instead, the difference between success and failure is a keen attention to a rigorous experimentation process. Having the right team in place and making sure the team understands the desired outcomes of the experiment will improve your ability to generate faster value and adoption.

Wearables are not right for every company. Better to experiment with a validation program today to explore the viability of wearables before you are playing catch-up with competitors that have been using this technology for years.

You can download the full white paper for free here.

‘Gig Economy’ Comes to Claims Handling

Why is this taking so long?!

The challenge I hear echoed throughout the insurance industry is, “How do we speed up the claims process for customers?” Insurance companies often bear the brunt of frustrations from customers stressed out about delays. As we all know, processing claims takes time and patience to gather information, details, photographs and a myriad of other documentation. Getting the right information and accurate documentation takes even longer.

Based on the volume of claims, resources and personnel can become stretched thin quickly. Despite all the efforts within organizations, it’s not uncommon to see claims departments contorting themselves like Gumby to get it all done. Insurance claims are stressful, and relying on customers to reliably and quickly provide information is a challenge — even when it’s to their benefit.

The problem becomes exacerbated following natural disasters or claims in geographic locations where companies have little to no footprint and limited resources to document and gather the information needed. In those situations, companies have to reallocate and sometimes relocate resources, which is expensive, time-consuming and a logistical nightmare.

Saving time and improving data quality and accuracy are all key components to avoiding customer frustration and increasing customer satisfaction and loyalty.

Traditional Challenges Meet Disruptive Solutions

Recently, there’s been a lot of handwringing about the “sharing economy,” the “gig economy” and what it means for traditional lines of business and workers. Will the workplace as we know it change completely? As Tony Canas shared in his Insurance Thought Leadership piece, “What Will Be the Uber of Insurance?,” the gig economy is hardly the end of the world, and the insurance industry is probably due for some disruption.

What a number of traditional lines of business are beginning to discover is that the gig economy presents an opportunity to leverage the power of crowdsourcing to solve challenges, eliminate inefficiencies and even spark innovation within their organizations. Target and Instacart, GM and Lyft, are great examples of how large, traditional verticals are finding ways to integrate the gig economy into new products and services to attract and keep customers while increasing the bottom line.

Now going back to one of insurance’s greatest challenges — saving time and improving accuracy in the claims process, particularly when it comes to getting information such as photographs, records, police reports and inspections. These tasks sometimes feel like they can go on forever with a single claim as companies try to coordinate logistics with policyholders.

What if there was an Uber for insurers? A service that could dispatch an objective third party with a smartphone to quickly take pictures and gather exactly the information needed in the claims process almost immediately?

There is.

Disruption Gets Good for Insurance

Like Uber, WeGoLook is changing the way the gig economy is disrupting B2B by providing inspection and custom tasking services. Building on the strength of the gig economy and using the crowdsourcing model, WeGoLook has built a nationwide network of field agents that provides a nimbleness that is often buried alive in large enterprises.

Here’s how it works at one of the nation’s largest auto insurance companies, where WeGoLook is incorporated into the claims-handling process:

  • A claim handler places an order on a custom dashboard and chooses a service: (1) vehicle photos, (2) scene inspections, (3) salvage retrieval, (4) police record retrieval.
  • A WeGoLook representative calls the onsite contact/policyholder to verify address/item information and schedule an appointment.
  • The “Looker” arrives on-site and captures the data needed for the service/task.
  • Data is submitted via the mobile WeGoLook app and reviewed by internal staff at WGL for quality assurance.
  • The completed report is sent directly to the claim file.

Turning to the gig economy and its on-demand workforce is generating economic benefits and creating true efficiency. We’ve witnessed the process being replicated in companies both large and small and in a variety of categories.

Since starting the company in 2009, I’m continually inspired by the creativity of entrepreneurs and how they’ve found new and inspirational ways to apply crowdsourcing. From crowdfunding, ridesharing, coworking and delivery services to even “pet Airbnb,” the gig economy marketplace is homing in on specific consumer and business needs and delivering.

How to Manage Claims Across Silos

The long-minimized and largely untapped synergy between casualty claims and benefit programs may offer opportunities for both industries.

Some argue that these worlds are just too different and distinct to bring together, whether through simple alignment or partial to full integration. Managers are often more comfortable in their own functional areas, and sometimes crossing over can stretch expertise and focus. Fundamentally, however, claims are claims.

There’s been a shift in thinking and a growing interest in a more collaborative, aligned and even fully integrated services approach – one that takes many forms but that at its core incorporates a more combined strategy from date of incident through claim closure. The targeted goals for this approach are:

  • Ensuring an appropriate employee experience throughout the life of the claim
  • Targeting and delivering optimal outcomes
  • Minimizing the cost of risk associated with the reasons employees are under medical care or unable to contribute productively to their employer’s mission

Shared Goals

On its face, the value of collaboration seems obvious. From both an employee benefits and risk management perspective, providing care for the individual is of the utmost importance. One of the main objectives is ensuring the right outcomes, which includes leveraging the basic skills of investigation, verification, documentation and equitable resolution that are common between these two realms.

The nuances and distinctions that exist between them are not insignificant, but the key goals are the same – caring for people under medically related distress (regardless of source), minimizing disruptions to workforce productivity and closing claims efficiently and effectively with fairness to all parties and their respective goals and objectives.

Although these objectives have varying levels of importance in each field, they are fundamental to process effectiveness in both. This is not to say that there aren’t peculiar and unique aspects of each that require certain expertise and skills to achieve specific goals.

However, while blending skill requirements among a common group of claims professionals can be challenging, it is not rocket science. Defining and filling positions to enable successful claims handling in both worlds is eminently doable. The biggest hurdle may in fact be the necessary collaboration between these typically distinct functional areas and their leaders.

Many employers are already effectively managing employee injury and disease exposures. There are discernible trends emerging toward fewer silos and more performance-oriented measurements that are focused on short- and long-term strategies. Those companies taking a more collaborative approach can benefit from key elements such as:

  • Compassionate care that puts employee interests first
  • Integrated reporting and measurement across departments
  • Robust analytics that result in prescriptive actions with impact
  • Innovative tools targeted to specific process opportunity areas
  • A more holistic focus on the care of affected employees
  • The over-arching goal of a healthy, productive workforce

So whether or not you have direct responsibility for both functional areas, I urge you to lead the charge that would leverage this opportunity for the benefit of your organization.

7 Common Issues on Property Claims

When a property claim occurs, with or without business interruption, it is very common to assume that it will be straightforward. Just submit your invoices, and your insurer sends you a check. You may think, “We can do it ourselves,” or, “We have it under control.” If this has been your approach, you need to read on.

There are many potential issues when preparing a property claim that are commonly overlooked or misunderstood. The challenge is even greater if there is a business interruption component to your claim.

From experience, my partners and I have identified the most common property claim issues that can slow down the claim process and have an adverse affect on recovery.

  1. Repair vs. Replacement

Repair vs. replacement comes up in almost every significant property claim. The issue arises when it becomes a battle of opinions and assumptions. We all know the humor on opinions and assumptions — but your property damage claim is no laughing matter, so let’s explore what can happen.

If you have a replacement policy, you have the option to repair or replace. If it makes more sense to replace with a new and improved item, then you should do what’s best for your business. However, if repairs are possible and at a lower cost, the adjuster will undoubtedly dispute the claim, and you’ll be debating a matter of opinion. When the adjuster’s experts recommend repairs that you know are not guaranteed to work, especially long-term, you face a challenge. As a business, you cannot afford to risk a failed repair, so you elect to go with new equipment with a warranty. The repair option will now be a theoretical scenario that your insurer can leverage to adjust your claim payment. Regardless of the adjuster’s position, you did what was best for your business, but there’s a way to neutralize this potential adjustment.

  • First, the worst thing you can do is proceed on a plan without sharing your logic with the adjuster. Include the adjuster in the initial assessment and decision-making process. While you have the right to do what is best for your business, the adjuster’s involvement and buy-in early on will make her part of the decision and can help to avoid an issue down the road.
  • Next, get several (at least three) independent quotes to repair or replace the equipment — these quotes should include the time, expense and predicted reliability of the repair. If you only get a quote from the original manufacturer, there could be a perception that it has an ulterior motive. Armed with data, you will have an easier time justifying your decision. For example, the repair option may be cheaper, but if it takes longer to complete, it will add to your business interruption claim and ultimately cost more.
  • Finally, perform a realistic analysis of various failed repairs scenarios and the potential impact on timing and costs. Discuss your findings with the adjuster to ensure any subsequent repairs and resulting business interruption would be covered as part of this claim and not a separate occurrence. After all, everything is technically repairable — it is just a matter of determining the most practical solution given all the circumstances.
  1. Betterments

Losses often present opportunities to make useful changes and improvements to operations. Adjusters anticipate this and will be prepared with reasons to limit recovery by labeling certain repairs, reconfigurations, and replacements as betterments. Most of the time, newer is better, and that is why you pay for a replacement policy. However, just because something is better does not mean you should not get full replacement value.

Let’s say you are replacing a piece of production equipment that was damaged as part of your loss. In searching for a replacement, you find that the as-was capacity replacement for your equipment is no longer available and that the alternative equipment has a 10% greater production capacity than the damaged property. In this case, the adjuster may argue for a credit for the increased capacity. Though the new equipment is clearly a benefit to your business, because the exact model that is being replaced is no longer available, you don’t have an equivalent alternative. If required to justify and validate your decision, simply compare the cost/time differential between your decision and a custom order built to spec. In cases like this, you should not be penalized for the betterment.

There are valid adjustments for betterments, but it’s important to understand the difference between a betterment and your rights to a replacement of like kind and quality.

  1. Property Damage vs. Extra Expense

From a policyholder perspective, the types of expenses related to the claim do not really matter because they are necessary to get back in business. The insurance company, however, needs to see expenses segregated into their proper insurance claim buckets. To ensure a smooth claim process, knowing how best to account for expenses is critical to the outcome of your claim. Let’s say you have payroll expenses for cleanup and remediation. If you consider that property and extra expense are subject to different limits and deductibles, it makes good sense to claim them according to your coverage limits. As a rule of thumb, look at the property bucket first for expenses related to cleanup and repair of the property because the extra-expense bucket will offset business interruption, thus allowing you to operate as normally as possible during the indemnity period.

As an example, assume you have production labor working overtime to keep production going and to clean up and repair damage from the loss. This time should be separated as normal labor, property damage cleanup and repair and extra expense. To complicate things further, both normal rates and overtime rates need to be factored into each calculation. Finally, you have to keep detailed records that document the who, what, when and where that is involved in the work being done.

Remember, when appropriate, it’s best to claim expenses as property damage, provided the costs can be documented. It is a more tangible approach and will avoid conflicting with the business interruption calculations for extra expense and inefficiencies, which are based on assumptions and subject to debate.

  1. Actual Cash Value

Immediately after a loss, you are entitled to recover the documented actual cash value (ACV) of your damaged property. You may claim ACV as the amount you are due before exploring replacement options. This is a good tactic if you want to get the cash flowing early in the process while the replacement values are being determined and decisions on replacement are made. However, accurately determining ACV can be challenging.

Typically, the starting point is the asset ledger that shows a depreciated value of the asset. However, this number is usually used for tax purposes and may not represent the actual value of the asset. Other options to value the asset include pricing based on what a willing buyer would pay or replacement less physical depreciation based on the actual life of the asset. These methods vary state by state. Do your research to value the asset appropriately under the circumstances and know that there is not one right answer.

Additionally, some policies allow you to recover full replacement value for assets even if you do not replace them. The policies usually require that you spend the money on a capital project that was not approved at the time of the loss. The capital improvement does not necessarily have to replace capability of the lost assets. If this is of interest, check with your broker about adding this option to your program.

  1. Period of Indemnity Impact

In general, the period of indemnity is the length of time it takes (or should take) to make property repairs. Once repairs are complete or should have been complete, the period of indemnity terminates. While you can, and should, attempt to settle portions of the property claim as you go, any agreements related to the property side of your claim can have a costly impact on the indemnity period for the time-element portion of the claim. It is critically important to address property issues in tandem with time element, to avoid unnecessary recovery issues.

This can be a little confusing. As an example, let’s assume you have a total loss to a piece of equipment, and the replacement cost is known. It would be reasonable to settle for the replacement cost of that equipment. However, the adjuster assumes an aggressive timeline to order and install the equipment, not considering how installation might affect continuing production. When this happens, make sure the timeline and assumptions for installation are clear and acceptable before settling on the cost to replace the equipment. Otherwise, you might get what you want on the property settlement and then lose on the time element.

If you have a separate team working on the property and time-element claims, collaboration is essential to avoid assumption-based adjustments, This becomes especially important when repairs are theoretical, as this will be the basis for the time-element recovery. Always remember to consider all assumptions needed for time-element claims as part of any property settlement.

  1. Residual Value Adjustment

If you have a significant property claim, you may need to purchase equipment or supplies on a temporary basis. The validity of these purchases is not in question, but their use once permanent repairs are made is. For items such as this, the adjuster may look to take a residual value credit. Essentially, the adjuster agrees that you needed that item, but when the permanent repairs are made (and paid for), you will no longer need it. This may be true, but this does not always mean you should not get full value for the item.

For example, you have an electrical loss that will keep you out of business for an extended period. You purchase a generator to provide basic power to areas of your business. When repairs are complete and power is restored, you no longer need the generator but still have the unit. Because you still have it, the adjuster takes a residual value credit. Is that fair?

The first question you need to ask is whether you want to keep the generator. If there is some value to you, a fair credit can be negotiated with the insurance company. If you do not want to keep the item or do not feel the credit is reasonable, you can have the insurance company take possession — after all, the insurer paid for it. If the insurance company thinks it can get value from the generator by taking possession and selling it, the company will probably take you up on this. More often than not, this is not cost-effective, and you can minimize or eliminate the residual value credit.

  1. Documentation

If you have never been through a significant property claim, you might not appreciate the level of detail that is required to document your claim. The general perception is that you gather some invoices and quotes on a sample basis, and that should be enough. Unfortunately, the requirements for an insurance claim are more detailed than most capital projects and audits. Quotes and estimates need to be extremely detailed, and proof of payment needs to be documented almost entirely — if you cannot properly document a claim, it will likely not be paid. It may not be acceptable to the insurance company to use a dollar threshold for charges because the company will insist on auditing 100% of the charges.

To demonstrate the level of scrutiny that claims come under, I refer to an experience I had on one of the largest claims I worked on. The property portion of the claim was close to $200 million. Months of work and tons (literally) of paper were presented to support this claim. During a meeting between the accountants and engineers, one of the engineers made copies for everyone of one invoice presented for payment. He adamantly pointed out that the invoice had been duplicated in our claim submission. It was for one $5 roll of duct tape.

The point is that handling and organizing all the documentation required to support your claim can be daunting. To avoid mistakes, it is advisable to assign a dedicated person or team to locate, scan, print and manage all the support documentation. Bringing in an expert forensic accountant is always a good option to consider, especially for larger, complicated claims or just to relieve your team from these tedious and burdensome tasks. Forensic accountants that specialize in claim preparation may be covered in your policy to work on your behalf. Though you will still have some work to do, your claim will go more smoothly, with fewer pitfalls.

Now you know why property claims are not as easy and straightforward as you might expect. After decades of preparing claims for policyholders, we can attest that what you don’t know comes at a cost in both time and money. We hope the information above can help you prepare for at least some of the issues you might encounter should you have a future property damage claim.

When Terrorism Becomes A Reality

This week's tragedy at the Boston Marathon has touched each of us on a very personal level and puts fear in our hearts that this could happen again. As the dust settles at the site, there will be many unanswered questions, and some of those issues will concern terrorism and insurance for terrorism.

What do we know at this point?

  1. It is being speculated that this is an act of terrorism.
  2. It is uncertain if it is an act of domestic or foreign terrorism.
  3. It is, also, unlikely at this point that this will be a Certified Act of Terrorism.

What are the immediate insurance issues that we see from this event?

  1. Severe injuries and death
  2. Direct damage to buildings and structures
  3. Direct damage to property (including vehicles)
  4. Closure of areas due to direct loss and civil authority
  5. Debris removal and damage
  6. Workers Compensation

For all of us in the insurance industry, we have to be asking ourselves:

  1. Are we offering terrorism coverage to our insureds?
  2. Are we going beyond just the offer of the Terrorism Risk Insurance Act (TRIA) and offer stand-alone terrorism insurance, which is available in the insurance market place?
  3. Are we carefully documenting our conversations with our insureds about the terrorism offer?

The Insurance Community University has two important classes for you to attend:

Update on Terrorism Exposures and Insurance — May 7, 2013

  • Overview of terrorism risk and exposure
  • Review of TRIA (Terrorism Risk Insurance Act)
  • Terrorism Insurance

Insight on Errors & Omissions — April 25th and 26th

We have heard it a thousand times — “documentation;” but in light of the bombing, we have to take a harder look at what we are doing: your files must speak for themselves and contain the notes on discussions, offers, acceptances, rejections, and follow ups. The Errors & Omissions class is approved with various insurance companies, including Fireman's Fund for credit on your agent's Errors & Omissions renewal insurance.