At the 2018 RIMS Annual Conference, Max Koonce from Sedgwick discussed decisions around risk management claims program administration.
- The first significant challenge is figuring out what is the most important aspect of your program and whether your focus is short term or long term.
- Do you view your risk management vendors as just a commodity where you want the cheapest possible solution? Is your focus more on the claims outcomes? Or is it something in between?
- What is your interest in the program and the partner? If you want a longer-term relationship, you need to make sure the fees you are paying to your vendor are sufficient so that they can provide the level of service you desire now and into the future.
- What impact does your claims administration program have on your employees and your customers? Claims that are not properly administered can have an adverse impact on your operations and your sales.
- It is necessary to keep in mind how your claims program, ultimately, impacts your insurance policy pricing. If you have poor claim outcomes, you will pay more for insurance coverage.
- There needs to be clear expectations around reserving philosophy. This impacts both premiums and collateral.
- Within the organization, it is important to have good communication about the cost drivers of your claims and the impact your risk management and claims management programs can have on these costs.
- What value does the claims administration provide to your company? Is value determined by the costs of the program, alone, or are you looking at the total costs of risk and the impact your claims management program can have on them.