December 23, 2024 • 48 mins
In this rebroadcast episode, ADJUSTED welcomes Julie Greer, Senior Catastrophic Resolution Specialist with Berkley Industrial Comp. Julie discusses some general best practices of reserving claims and the possible effects of poor claim reserving.
Season 8 is brought to you by Berkley Industrial Comp. This episode is hosted by Greg Hamlin and guest co-host Matt Yehling, Directory of Claims at Midwest Employers Casualty.
Visit the Berkley Industrial Comp blog for more!
Got questions? Send them to marketing@berkindcomp.com
For music inquiries, contact Cameron Runyan at camrunyan9@gmail.com
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:12):
Hello everybody and welcome to Adjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, Alabama, andBerkeley Industrial Comp.
And I'm excited to share withyou this special rebroadcast.
I find myself very fortunate towork with Julie Greer.
She's an amazing, talentedadjuster who has spent so much
(00:33):
time in the industry, and one ofthe things that I wanted to
tackle was the importance of theart of reserving.
I really do believe reservingis an art.
It takes years of experience tobe good at reserving, and Julie
has a skill of reserving someof our most complicated claims,
(00:53):
and so obviously, everyorganization is going to have
their own reserve philosophy,but Julie does a very nice job
in this episode, breaking downwhy reservingerving is important
and some of the steps to makingsure that that philosophy is
documented in a way for othersto understand.
So I definitely encourage thisone for adjusters, no matter
(01:14):
your experience, and also see itas a great training resource
for new employees.
So enjoy this one with Julie.
Thanks everyone.
Hello everybody and welcome toAdjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, alabama, where it isfinally starting to get cold
but I guess, having grown up inthe Midwest, we wouldn't call it
(01:36):
cold.
And then with me today is myco-host, matt Yaling.
Matt, if you want to introduceyourself.
Speaker 2 (01:45):
Good morning everyone .
This is Matthew Yaling withMidwest Employers Casualty, and
I'm coming from the banks of themighty Mississippi up in St
Louis.
Speaker 1 (01:53):
Missouri.
Are you guys going to get snowanytime soon here, Matt?
Speaker 2 (01:57):
Well, we had some over the weekend actually, but
it stuck around for about 30minutes and then it's gone.
So I like it when it does thatpersonally.
Speaker 1 (02:06):
Yeah, well, I still got a couple of snow shovels in
my garage that are just likerelics, since we don't really
see that down in Birmingham.
I think we've had two dustingsin four years and both were gone
within two hours, so I guessthe kids have seen it, but and I
bet it shut down everything.
Oh yeah, there's nothinghappening.
If that happens, the world endsso well with us.
(02:29):
Today we've got a special guest, Julie Greer, who's our Senior
Catastrophic ResolutionSpecialist for Berkeley
Industrial Comp.
So we're glad to have her withus.
Julie, if you could say helloto everybody.
Speaker 3 (02:41):
Hello everybody.
Everybody's talking about wherethey're from, and I sit here
down in the great state of Texas, where typically it's very hot,
but I've actually had somefreezing weather here over the
last week and I'm already overit, so I'm ready for the warm
weather again.
Speaker 1 (02:57):
Now you're in the Dallas area, dallas-fort Worth
area, is that?
Speaker 3 (03:00):
right Correct.
Just north of Dallas, in theMcKinney area, which is
considered North Texas, suburbof Dallas.
Speaker 1 (03:07):
Excellent.
Well, we're glad to have Juliewith us.
We're also glad to have her asa member of our team.
Julie brings a lot ofexperience.
For those who don't know,berkeley Industrial Comp is
focused on high hazard workers'compensation insurance, which
means we see very difficultinjuries on a fairly regular
basis, although we don't have alot of frequency in our losses,
(03:27):
and so Julie's part of ourcatastrophic team that helps us
manage those challenging claimsand has a lot of experience, so
we're very fortunate to have herwith us.
The topic of the day isreserving claims reserving and
we were actually chatting alittle bit before this started.
This is probably one of thoseclaims 101 topics that we
(03:50):
haven't covered in nearly twoyears of doing adjusted, so we
felt like it was time.
So Julie's going to be ourexpert on that today, because I
think Matt and I are too farremoved now to consider
ourselves experts at reserving.
I don't know about you, matt,but that's where I'm at now to
consider ourselves experts atreserving.
Speaker 2 (04:06):
I don't know about you, matt, but that's where I'm
at.
I do want to add my owndisclaimer.
Everyone, every company,reserves a little differently.
So anything we say or commenton, we're not giving away the
secret sauce here, but I thinkthere's some common best
practices in the work compindustry that we're going to
comment on reserving From anexcess carrier, midwest
Employers' excess work compcarrier that we're going to
comment on reserving, but froman excess carrier.
(04:26):
So Midwest Employers is anexcess work comp carrier.
I see the reserves on a lot ofthird-party administrators, a
lot of our other insuranceentities and account partners.
So I see a lot of differentreserve philosophies and
different styles of reserving.
So always interesting, andthat's why I was telling Greg
earlier I'm curious to see howthis discussion pans out.
It so always interesting andthat's why I was telling Greg
earlier, like I'm curious to seehow this discussion pans out,
(04:48):
it'll be interesting.
Speaker 1 (04:49):
No, I'm glad to have you.
I think your perspective willbe interesting, having seen so
many different styles, and Ithink we've all worked actually
in this group for differentcarriers, so we've all seen
different ways of doing that,and so it should be a pretty
interesting discussion.
I know for myself I've beenjoking.
We have a couple team membersthat moved on to new positions
(05:10):
and so we're hiring and in thatprocess I've been helping out
with some claims tasks.
Again, I'm a big Marvel fan andI kind of feel like Fat Thor
right now.
I can wield Mjolnir, but it'sjust not like how I used to.
So I'm glad that we havesomebody who's in the trenches
that can talk about this topic.
I definitely have my ownthoughts and we'll be sharing
(05:31):
them, but I think Julie's goingto do a fantastic job today.
I thought we'd start, julie, byyou just telling us a little
bit how you ended up in claims.
We always like to start withthis question, and I'm sure when
you were young, this was yourdream job to be an insurance as
a claims person.
So tell us, how did it happen?
Speaker 3 (05:52):
Well, like so many, it was quite by accident.
I was just out of school and Istarted looking for work and I
absolutely had no idea what Iwanted to do.
So I applied for a front deskjob at what turned out to be an
insurance company and the claimmanager came out and brought me
back to her office and said shehad noticed that I had been to
(06:12):
college and wanted to know ifI'd be interested in being a
claims adjuster.
So and I remember telling her Ihad no idea what that was or
whether I was qualified, and shejust smiled and I think back
it's probably an evil smile andsaid don't worry, you'll get the
hang of it.
And next thing I knew I wasgiven a book of rules and
regulations for the jurisdiction, 200 plus files, an assistant
(06:34):
to help with the payments andstate form filing.
I didn't even know.
I didn't know the differencebetween a defense attorney, a
plaintiff attorney, and Idistinctly remember asking the
first attorney that called me ifhe was a good guy or a bad guy,
and so I mean, and I I amhorrified thinking back what he
(06:55):
must've thought.
He kind of laughed and said I'mthe bad guy and, uh, you, you
take this to your supervisor.
And so from there, you know, itwas truly a baptism of fire
into the claim world ofinsurance.
But in about six months I wasalready licensed and I was
really good at what I was doingand I found I really loved the
challenges of handling everyaspect of the claim and
(07:16):
eventually I went on to handleboth work comp and liability
claims, which has really servedme well over my career in the
insurance industry.
Speaker 2 (07:24):
That's awesome, julie , which has really served me
well over my career in theinsurance industry.
That's awesome, julie, greatyeah, thanks for sharing that.
So when we talk about reserving, we can probably vacillate on
just what that means.
But to start at the beginning,what is a reserve from a claims
perspective?
Speaker 3 (07:43):
Well, in the simplest sense.
I mean it's the amount of moneyyou set aside to cover the
legal and financial obligationsthat are arising out of a claim,
and it's much more complex thanobviously.
I mean we've got Sarbanes-Oxleyand other regulations that
require insurers to accuratelyaccount for their liabilities.
Insurers are subject toquarterly and annually reporting
, as well as audits, and ifthere's an indication of
reserving issues, you know thesewill need to be satisfactorily
(08:06):
addressed.
And if we're insured tocontinue to do business in a
state, you need to have accuratereserving.
And the key is, you know thekey word is accurately.
You know from a claimsperspective it's often a
challenge.
You know all the informationthat's needed is not necessarily
available when that claim comesin.
There's uncertainty what's theextent of the injuries?
(08:27):
Is medical care?
What's that going to look likeover time?
Is there a return to workpossibility with our customer?
Can they accommodate the returnto work?
All this can be difficult topredict and, depending on the
reserving protocols or bestpractices of the insurer,
initial reserves might be basedon what they call a statistical
reserve.
So every new loss that comes inthe door is automatically going
(08:49):
to be assigned the same reserve.
The second approach is literallya best guesstimate, and that's
to allow for benefits to be paidwhile the necessary information
is gathered and reserves can bemore accurately established.
Once you get that sufficientinformation, it's at that point
that you're going to do yourdetailed evaluation, which is
necessary to ensure again thatwe have appropriate funds that
(09:11):
are being set aside to cover theanticipated future costs of
that claim.
You know, once that claim isestablished, that focus then
shifts to monitoring theaccuracy of the reserve as new
information becomes available,and I think that piece is
critical.
I mean, once you get thereserve set, you can't just let
it go.
You need to be looking forthose changes in condition.
You know, what was thought ofmaybe as a simple back claim
(09:32):
coming in the door now, forinstance, is now progressing to
surgical intervention.
Conversely, though, you know,what we thought was a severe
injury is not as significant.
So we might look to lowerreserve to more accurately
reflect the exposure from whatwas initially determined.
Speaker 1 (09:47):
I think those are great points, julie.
You know, for me I think aboutit a lot Like if you were going
to go on vacation and you hadsomewhere fun I'm going to make
it something more fun thansomebody getting hurt.
But you know you have to planout.
Well, what's it going to cost?
What are the plane ticketsgoing to be?
What is it going to cost to dothe activities?
Is it all inclusive resort ordo I need to be paying for all
(10:10):
the activities we do?
And then when you get there, youfind out that some of the
things you plan for either areless or more than what you
thought.
You find out that food was waycheaper than you thought or way
more expensive, and you have toreassess your budget right and
make some choices on okay, well,what does this look like?
(10:31):
And claims that's really at ahigh level what we're doing, but
we're doing it with theknowledge that we have that
changes and I thought you did anice job of highlighting that.
I know, talking to our actuary,one of the things that would
give him the most pain is if weare not being consistent on how
we evaluate reserves, becauseand Matt hinted at this working
(10:53):
with different TPAs, differentcompanies everybody might have a
slightly different way to goabout reserving their claims,
but if they're doing it exactlythe same way, then it makes it
easy to anticipate what could beout there From your perspective
.
Why is having a reservephilosophy within your company
(11:14):
that's consistent important,julie, and you've worked a few
places as well.
Speaker 3 (11:19):
Yeah, I mean, one thing everybody looks at is the
overall outcome, making surethat we're reserved for that
ultimate outcome.
But I kind of look at thereserve philosophy as a roadmap
of sorts.
You know it provides what youwere talking about, that more
consistent approach.
You know when and how reservesare calculated.
You know it's also an insurer'sbest practice that will ensure
(11:40):
compliance from a regulatorystandpoint.
And I think what's importantfor an adjuster in following
these established guidelineswith this reserving philosophy,
it's going to ensure thatconsistency, like you said,
across all claims.
And that's the critical pieceof it, along with the adherence
to best practices.
And since the insuranceindustry is such a heavily
regulated industry, how well wemanage our claims from a
(12:02):
fiduciary standpoint can eitherhave positive or negative
long-term impacts on the abilityto do business.
Part of the auditing process isreviewing whether or not
adjusters are following the bestpractices, operating within
their specific authority andadhering to the insurer stated
reserving philosophy, whateverthat might be.
Speaker 2 (12:20):
I appreciate that summary and I like Greg's
reference to actuarial walkingover and you know asking that is
this consistent with ourreserving philosophy?
It reminds me of you know goinggolfing with with actuarials.
I don't know if you've evergolfed or golfed with actuarial,
but the one one actuary willline up hit the ball dead to the
right.
The other one lines up, it's adead to the left.
(12:42):
They look at each other and sayperfect.
Speaker 1 (12:48):
Yeah, no, that's exactly it, and I think what
I've learned from them is theyhave a lot of pressure on them
because they're basically beingasked to be fortune tellers.
They're being asked to lookinto the past and predict the
future, and if our past isinconsistent, then they're going
to have a hard time evengetting in the ballpark of
what's going to happen.
(13:08):
So, being consistent in thatphilosophy, whatever that
philosophy is within yourcompany, I think that's really
important.
One of the things we hear aboutis under-reserving.
I'm sure Matt has an opinion onthis, being an excess carrier,
they don't like surprises either.
But, julie, what are yourthoughts on the impacts of
under-reserving?
Speaker 3 (13:37):
So you know, as mentioned previously, you know
that reserving is setting asidethat money, you know, to cover
an insurer's financialobligations.
And here's the part that getscomplicated is it's not.
You know, like you mentioned,personally I'm not setting aside
, you know, $50 to do X here andnow.
You've got to do that here andnow on the reserve on a claim
file.
But you've also got to projectinto the future, which is really
difficult to do.
You know, and we always jokeabout having crystal balls and
(13:59):
you know voodoo magic and allthat other thing to you know, to
predict something.
We don't really know what'sgoing to happen, but we have to
be as good as we possibly can inorder to make sure there are
sufficient funds out there onthese claim files to make claim
payments when they need to bemade.
So under-reserving has a numberof negative downstream impacts
and this is where you know,actuary, you know they're under
(14:20):
the gun constantly to make surethat we're doing what we need to
be doing on the front line.
If an insurer is unable to meetits financial obligations, it's
going to impact the financialstability and one of the things
it leads to is a downgrade infinancial stability and rating
from firms such as AMBEST.
So you see, an insurancecompany that's A-rated, a-plus
rated, a-plus plus rated that'swhat you strive for as a
(14:43):
financial institution.
You want to be rated highly andif you're downgraded in the
stability rating, it's going toresult in fewer potential buyers
of the insurance product,ultimately running the risk of
insolvency.
And as a customer, wouldn't yourather be with an A++ rated
company?
Even as an adjuster, I want towork for a company that's highly
rated and this is usually agood indicator.
(15:05):
The company is well managedfrom a financial aspect.
The other impact is on futurepremiums.
The reserves on open claims arepart of the calculations an
underwriter uses in establishingthe loss experience of a
company.
So if the loss experience isunderstated because the reserves
are insufficient, the insurerwill be charging an inadequate
(15:25):
premium, which is going toresult in lower profits and
again potentially pushing thecompany to insolvency.
Speaker 1 (15:31):
I think you hit on it perfectly there and I won't go
into all the details, but I'veworked for places that have been
on both sides of that fence andthere's nothing more stressful
than when your AM best rating iseither changed or the outlook
has changed.
That creates a lot of pressureand stress within a company.
And you're right, people wantto work for places where they
(15:53):
know that they don't need toworry about those things, right?
People want to work for placeswhere they know that they don't
need to worry about those things.
Matt, I'm curious from yourperspective you mentioned this
as an excess carrier what keepsyou up at night when there's
under-reserving by somebody thatyou're doing business?
Speaker 2 (16:05):
with Quite honestly.
So if it's an excess levelclaim, we do look at the TPA's
reserves, but we have enoughstatistical data that we
primarily will ignore theunderlying reserve on the
account.
If we're having a claim open andwe're tracking it ourselves, we
set our own independent reserveand from an excess perspective,
(16:29):
we're doing that independentbecause this goes back to some
previous conversations TPAs andcarriers are set up for
frequency claims and they're notgenerally set up for the big
bad ugly claims that make up100% of an excess carrier's
caseload.
So we set our reservesindependent of whatever the TPA
or whatever the underlyingcarrier.
(16:51):
Self-administered partnersreserves would be so it's a
little different.
Self-administered partnersreserves would be so it's a
little different.
You know, in each GPA, you knowI can tell you reserves
differently and we see different, you know different best
practices and I get to, I get tosee a lot of those best
practices.
So the philosophies aregenerally very similar but you
can definitely see differenttrends in different places.
And, and you know, reserving isa tough topic because in some
(17:14):
states you know you're reservingtotally different because and
we're going to get into some ofthese examples but you know like
in this part of the state, youknow, a carpal tunnel claim is
worth this.
If I go 300 miles north of StLouis, the carpal tunnel claim
is maybe twice as expensive, youknow, in Chicago, illinois,
versus what it would be inCarbondale Illinois, what it
would be in Carbondale Illinois,and that's probably not 300
(17:36):
miles.
But the point is, you know, youhave to know where you are,
what the circumstances of theclaims are, and we always joke.
You know, not joke, but youknow reserving is more of a soft
science, right, it's not alwayshard and fast rules.
And then we talk a little bitabout, like stair-stepping, and
there's a question for Julie iswhere do you see stair-stepping?
(18:01):
And you talked a little bitabout and I mentioned it even
too the dynamics of a claimchanging.
What's the difference betweenrecognizing the changing
dynamics or something's changedin this claim?
That's an accepted claim versusstair-stepping, like, maybe you
know, can you talk to both ofthose points, because I see this
all day where you know acondition worsens, but you know,
(18:24):
stair-stepping, I think, is atotally different thing than,
hey, there's a worsening of thecondition.
Speaker 3 (18:29):
Yeah, well, at stair-stepping.
I mean I look at stair-steppingas kin to the under-reserving.
I mean not to sound hokey, butit's kind of like the stepsister
of under-reserving, you know,these small incremental
increases to cover just enoughof what needs to be paid at any
given time and it's just asdetrimental as under-reserving,
you know.
In effect, you know it isunder-reserving, I mean, and I
(18:50):
think this can be symptomaticperhaps of an adjuster not
understanding the context of theclaim or not utilizing
resources to accurately assessthe exposure over an appropriate
period of time.
So you're in the file andthey're going in for surgery and
you only have a few weeks ofindemnity.
So they pop up a little bit ofindemnity and they have to pay
(19:10):
for.
They say, oh, surgery, so theyput that in, but then they don't
think beyond, like there mightbe physical therapy.
Maybe now I need to assign anurse case manager.
I haven't seen any bills comein and I'm already down and I
only have X number of dollarsleft in medical.
Perhaps my original assessmentwasn't accurate at all.
But they never take the time toactually look at where the case
is, look at the medical reportsand look at the prognosis, and
(19:32):
look at the prognosis and lookat what the treatment plan might
be to project out accurately.
And I adjust reserves all thetime, so it doesn't necessarily
mean you have to know everydollar it's going to be spent.
But if you have the informationthere in front of you, that's
the point in time that you needto be doing it, not when you've
(19:53):
run out of money and then nowyou're popping up a little bit
more and a little bit more andit kind of goes back to what we
were talking about with Actuary.
They've already reported outfor the quarter and now the next
quarter.
Now they're having to reportthis big bump in reserves
because somebody finallyrecognized that we were
under-reserved on a file.
And the question is, why wasn'tthis done last quarter or last
policy period?
And you're left there standinglike well, because I really
(20:15):
didn't look at anything, and nowI'm being forced to put the
money up that should have beenput up.
You know, six, eight months agothe change in conditions a
little bit different, and thatkind of goes back to what I was
talking to you about.
Under reserving is, if you havea strain can make it easy.
Have a strain come in backstrain.
You know there's typicaltreatment, conservative care,
that happens.
But now all of a sudden, thecomplaints go on and now they
(20:37):
have an MRI or a CAT scan and itshows they have a herniated
disc and the doctor is nowrecommending surgery.
So now we know that thedisability is going to be much
longer, there might bepermanency.
We have to account for surgeryand recovery, and you know some
of the things that go along withthe cost of surgery.
So that's a changing conditionthat you did not have available
(20:57):
to you when you reserved thefile previously.
So now you go through the sameprocess of looking at what does
that exposure look like overtime, short term as well as long
term?
Speaker 2 (21:07):
Right, yeah, I appreciate that.
I think just to add on to thatcomment you know, and we you
know I work with a lot ofdifferent TPAs comment you know
I work with a lot of differentTPAs.
One of the things that you knowif we see consistent, like this
adjuster is setting the reserveat $5,000, a bill comes in and
it's a $5,000 bill and thenthey're not recognizing the
(21:30):
difference in that development.
And then you know they'readjusting the reserve every time
a new bill comes in.
So they're not reallyrecognizing the changes.
And you know we all are verybusy right in claims and claims
handling and that you knowthere's maybe a file that flips
through the cracks.
But when you're auditing thesefiles and you see like hey, it's
always with you know, bob thebuilder and it's, you know it's
(21:54):
on every one of his claims,that's when it becomes an issue
and it's probably a performancething when the reserving is not
consistent with the claimshandling reserving philosophy
for the organization.
So that's different.
But one bad one adjuster that'snot recognizing that I don't
want to say bad, but oneadjuster that's not being
proactive with setting thereserves for whatever reason,
(22:18):
may be impacting the wholeorganization in a very negative
way.
I mean reserving is verycritical.
I always preach to my staffit's reserving, mitigation and
settlement.
If you're not doing those threethings right and if you're not
doing the reserving, reservingthe critical part you can have a
(22:38):
claims organization thatdoesn't mitigate and doesn't
settle.
If you have to reserve setappropriately, but anyway.
Speaker 1 (22:47):
No, you're right, Matt.
It's going to be reflected inyour rates when you're trying to
renew.
So hopefully we're doing thoseother things because we want to
have positive outcomes, but atthe end of the day, if your
reserves are off, everythingcould be off, and no one wants a
$20 million or $30 millionsurprise where we find out oh,
it turns out all these fileshave not been where they needed
to be.
That creates a lot of heartburnwhen that happens.
Speaker 3 (23:11):
I think also companies do themselves a great
disservice by not educating theadjusters.
I mean, you think of an adjuster, you think, well, they just
adjust claims, they processpayments or they manage return
to work and they litigate.
But they are the financial backof the company and if you don't
understand as an adjuster whatthe impact is to the company and
(23:34):
then the downstream effects soif we're writing business but
yet we're spending more thanwe're bringing in, it affects
not only the financial stabilitybut from a personal standpoint,
my ability to maintain a jobwith the company bonuses raises.
If there's none of this surplusfrom the profits we make
because we're managingeverything really well.
You make it real for them andmake them understand, provide
(23:57):
them that education from anactuarial and underwriting
standpoint, then you know thatevery time I pick up a file,
it's not just this file that I'mimpacting, it's my teammates,
it's myself, it's otherdepartments and the company as a
whole and I think that piece ofit.
Once you make it more personallike that and they really
understand the impact, then Ithink people tend to get better
(24:21):
at what they do, because thenthey understand how much control
they have over that part oftheir jobs and their success in
the role of an adjuster.
Speaker 2 (24:27):
I love that.
I 100% agree.
Thanks for bringing that up,because I think we're going
through that here at Midwestwhere the claims and the
underwriting and the marketingand sales.
We need to know what our impactin claims is for the
underwriting and the actuarialpiece.
I'm not saying everyone needsto be an actuary or everyone
(24:50):
needs to be an underwriter.
I'm saying you need to know andunderstand when we do this it
impacts how we sell.
You know how we sell ourbusiness and when you do this it
impacts underwriting andactuarial.
So having that relationship, youknow I think we all came from a
similar organization where, youknow a lot of those people were
all siloed and apart from eachother and that's one of the
(25:10):
things I really appreciate withour organization.
I know Greg's is the same wayat Berkeley Industrial Comp is.
You know, actuarial is rightdown the hall or maybe in the
next room or the next office orcube, and so it's important to
have that stuff close by andhave an understanding of your
impact in the organization andwhat that means for all those
other steps.
So thanks for doing that, john.
Speaker 1 (25:32):
No, I couldn't agree more and I think you know,
understanding the 5,000-footview makes it easier when you
zoom back in to know how whatI'm doing impacts the company
and what things I can do thatmove the needle.
Julie, as you think aboutreserving, I want to zoom in on
that a little bit and talk aboutsome of the things, some of the
(25:53):
details that make an impact onthe reserves.
That, if you were a claimsadjuster, specialist examiner,
whatever the word title is foryour company, what are some of
the things that you should bemindful of when you're thinking
about a reserve?
Speaker 3 (26:09):
Well, I think, breaking it down.
One of the first things I lookat is you know, the age,
education, taking it down.
One of the first things I lookat is you know, the age,
education, maybe transferableskills of an injured worker.
Also, the mindset of theinjured worker.
You know you have an individualwho's suffering a work-related
injury.
That can be very impactful.
You know, here they are working, earning a living for
(26:31):
themselves, for their families,and all of a sudden now they've
been injured and that's beentaken away from them, along with
any sense of control.
So not only is an injuredworker, you know, trying to
recover from an injury, they'realso financially impacted and it
can be incredibly stressful forthem.
So it's important you justpartner with the injured worker,
you know, to ensure therecovery process is as
stress-free as possible.
You know, and with a positiveexperience, it can have such a
(26:52):
great impact on the bestpossible outcome of the recovery
process and then the overallfinancial outcome of the claim.
So I already get my mindset andyou know what am I working with
, who am I working with and whatpotentially can I do with this
injured worker to make sure theyhave the best outcome possible.
And then then, how does thattranslate out into the overall
exposure on the claim?
You know you're looking atcomorbids.
(27:15):
It's important you know,determine what impact the
comorbid might have on recovery.
You know, as well as anylong-term impact from an overall
health standpoint.
Working with the customer isalso important.
You know what is their abilityto bring the injured worker back
to work If there arelimitations.
And is this just a short-termfix or would they have a
long-term perspective as well?
Because if they can accommodatemaybe a short term, but what if
(27:36):
those limitations are therepermanently?
Do I have a resource with thecustomer?
Because if not, it's going toimpact indemnity and potentially
the medical, because you getall of the factors of not being
able to return to work.
It just exponentially impactsthe overall financial expense of
the claim file.
And is the medical care qualityin alignment with goals of
(27:58):
recovery to return to work andif not, what steps can be taken
to make sure the best carepossible is being provided?
So if you're not getting whatyou need out of the doctor and
the recovery is not progressingand the necessary tests aren't
being done and there's really nofocus of the doctor on the
prognosis and outcome and atreatment plan with timeframes
built in, then maybe it's timeto get another doctor and maybe
(28:19):
get a second opinion or see ifwe can get better medical care.
And, of course, litigation whatimpact will a litigated claim
have on management of theexposure and long-term impact on
cost to bring it to resolution?
Sometimes, no matter how wellyou work with an insure worker,
for whatever reason, they stillmay get an attorney and that
process has to be thought aboutand brought into the impact
(28:42):
it'll have on the exposure overa long-term basis and as you
look to either settle the claimor bring it to some form of
resolution.
Those are just some of the keyelements that will impact how we
look at the overall exposure,but I think those are some of
the key that I look at when I'mlooking at how I want to reserve
long term.
Speaker 2 (29:00):
You just said a lot of things and you've had a lot
of experience and expertise inthe industry, but for a newer
adjuster or somebody that'smaybe putting together a
reserving best practiceguideline, what resources are
you aware of or what resourcesdo you know that maybe we could
point some people to and say,hey, you know, consider doing
this.
Or can you have a list or someexamples of resources?
Speaker 3 (29:24):
Yeah.
So the indemnity and I thinkeverybody can agree medical is
the most difficult part.
I mean the indemnity isrelatively easy to evaluate
compared to the medical.
Your jurisdiction is going toprovide guidelines that spell
out the limitations, along withother factors like return to
work potential.
You know whether or not there'simpairment other things that
each jurisdiction has that'sunique.
(29:46):
That'll aid in reserving forthe indemnity.
The real challenge is estimatingaccurate medical.
Some of the resources I rely onfirst and foremost are medical
records.
The different components of amedical record will really help
you spell out not only what theinjury is but what kind of
treatment is going to beanticipated.
And then again the treatmentplan and then prognosis, and
(30:06):
that goes a long way intohelping guide you into the
number of weeks and the othercosts that you need to factor in
pharmacy, physical therapy,nurse, case manager.
So that's a good roadmap tostart with.
If the physician isn'taddressing these two key factors
, then you need to ask for it.
I mean, it's as simple as that.
You need to have good medicalreports and a good rapport with
(30:27):
the doctor's office to get thatinformation so that you're both
on the same path to get thisperson either back to work or
getting the right care they need.
I also rely on the ODG.
These guidelines are a goodresource and a standard
reference for evidence-basedmedicine you can get, and
they're not the end-all and thebe-all.
I mean carpal tunnel may onlybe X number of weeks that you
(30:47):
can expect disability, but thenyou've got to factor in the
other things as far as return towork options and if there's
comorbids and other things.
But it's a really goodguideline to give you an
indication of how long somebodymight be out and what kind of
care is involved in that type ofinjury and or surgery, et
cetera.
I use the National VitalStatistics to address life
(31:09):
expectancy and one of the things.
I don't know if it'sunderutilized, but it should be
utilized.
I use it on all my claims.
But a reserve worksheet.
It's a great tool to calculateexposures.
The components of a reservingworksheet can act as a mind
jogger to make sure all aspectsof the care have been considered
.
I don't know how many timesI've kind of hand jotted down
(31:30):
all the things that I'm thinkingand then when I go to put it in
the worksheet, I totally forgot.
You know a DME or pharmacy oreven my nurse case manager who
I've been working with, Itotally forgot to account for
those expenses.
So the worksheet helps me breakdown those different and then
and think, well, do I need that?
And if not, fine.
But if I do need it, I didn'tthink about it.
There it is right in front ofme and when you have those
(31:51):
different, like I said, carecomponents listed on a worksheet
you're not going to missaddressing, like you might if
you're manually trying tocapture each aspect of the care
provided.
Most companies have resources.
They have resource tools forpulling data at the claim level.
These tools are really great tosee the actual cost in a claim.
That can be replicated whencalculating out over time.
(32:12):
And to give you an example, Iestimate physical therapy each
session 175.
Yet when I pulled the claimdata on that same claim file, I
realized that I'm being chargedfor something and then with the
fee scheduling I'm actuallypaying 325.
So I'm almost 50% off on mycalculation on PT.
So pulling that data and reallylooking at the actual costs
(32:33):
that are coming in helped mereplicate that out when
calculating out over the future.
I've been in claims for manyyears and I'm still learning
something new all the time.
If I can't readily findinformation.
I'll Google it.
I mean, there's an amazingamount of information out there
that helps me understandinjuries recovery time costs
Matt, you mentioned thatsomething might cost $5,000 down
(32:56):
here in Chicago, but up inCarbondale it might be less
expensive.
I did it the other day lookingat life care, the flights it's.
Down here in Philadelphia itmight have been $25,000, but up
in upstate Pennsylvania it'sonly between $9,000 and $12,000.
So I simply Googled it and Ican find that information that
might help me factor in what Ineed to set aside to cover that
(33:19):
cost.
And last but not least, yourexperienced coworkers and team
managers.
I mean, what better place tostart than the people you work
with every day?
I mean most people.
You have a variety of peoplewith different experiences, and
I'm chatting constantly, notonly with my manager but my
teammates, like hey, have youever seen this before?
What should I expect?
Your nurse case managersthey're a wealth of information
(33:41):
as well, and they can help guideyou on things that you might
not have thought about.
So those are some of the keythings that I look at that help
me every day and even with allmy experience, I still utilize
these things religiously.
Speaker 1 (33:55):
I think you hit on so many good resources there, so
hopefully people will rewind andlisten again, because I think
there really is a lot there andyou're not out on your own.
That's the biggest thing I'velearned and you are limited by
your experience.
I remember being a new adjusterand I had a claim where the
injured worker had a knee injuryand was 400 pounds and five
(34:18):
foot one and he has a newadjuster, you know, and had
diabetes and a number of otherhealth issues.
This was years and years agobut I remember, you know, not
understanding I went into OGGguidelines and saw, well, what's
a meniscal tear cost, you know?
And it gave me some guidelines.
And I remember the senior on myteam saying, well, wait's a
meniscal tear cost.
And it gave me some guidelines.
And I remember the senior on myteam saying, well, wait a
minute, he's going to have to beweight bearing on this knee.
(34:40):
He's very heavy.
That's going to cause a lot ofproblems with his recovery.
You need to be thinking aboutthat.
These guidelines aren't goingto tell you all that.
So in that case I went to aresource, but I still needed
help from somebody with moreexperience that could kind of
point me in the right directionand say, hey, have you thought
about this?
And she wasn't wrong.
I mean, that was a difficultclaim and we were able to
(35:01):
identify that pretty early thatthere were some challenges there
.
So I think you made some greatpoints on what's out there as
far as resources go and youtalked about this a little bit.
But when you talk aboutdocumentation, so we know like
in a perfect world every claimwould live with the person who
had it from the day they got it.
(35:22):
And I think we all know that wedon't live in that world, that
files get moved around, peoplehave new opportunities, people
retire, people get promoted,people leave the company and
when somebody is taking over afile for somebody else, that can
be really challenging.
So talk a little bit aboutdocumentation and from your
(35:42):
opinion, julie, and some of theroles you've been in and why
that's important.
Speaker 3 (35:47):
Documentation.
I mean it tells the story andit sets the roadmap for where
the claim is going.
I mean, when you're looking atreserves in particular, you want
to have a detailed rationalespelling out the basis for the
reserve and the duration.
What are your short-term goals?
What are the long-term goals?
And when I'm looking at myfiles I look at short-term and I
(36:07):
look at long-term each andevery time.
Are there key milestones toconsider?
I reference my reserverationale every time I'm in a
file to see if what I hadplanned is still on track or if
I need to make adjustments basedon new information, detailed
documentation.
It actually forces you to thinkabout how that claim is
developing and what the plan isto mitigate the loss and bring
(36:29):
the claim to resolution.
So if you're really thinkingabout all the components and
you're thinking about your claimand you're kind of just putting
out that story, I do myrationale first, because then
that helps me, then level set onwhat I want to set aside in the
way of funding for all of thoseand do a rationale.
It's the rationale first andthen it dictates what my
(36:51):
breakdown is going to be and thedocumentation.
Like you have to look at themitigation of loss and how
you're going to bring it toresolution.
So that's part of your plan.
Within your rationale and I knowall of us have heard this a
million times the file shouldspeak for itself and this is
definitely important from areserving standpoint.
(37:13):
I don't know how many timesI've picked up a file and it has
a couple of items in thereabout the indemnity breakdown
and there's permanency, but Ihave no idea how they came up
with that permanency number.
I have to then go back and doresearch to figure out.
We handle a lot ofjurisdictions in my current role
, so I'm not an expert in everyjurisdiction, but I have no idea
(37:33):
how this is calculated andwhere those numbers come from.
What is it based on?
And there's not enoughinformation in the rationale.
There is even a rationale therethat helps guide me to
understand what the adjuster wasthinking.
Same thing if my manager picksup my file and is reviewing my
file, she should be, or heshould be able to go in and look
at my rationale and see if itmakes sense for what I'm
(37:54):
calculating out over the life ofthe claim at that particular
point in time.
Speaker 2 (37:58):
Yeah, thanks for sharing that, and I think you're
hitting on something that maybeit's a question for both you
and Greg is looking intodifferent partners at the TPA
level and carrier level.
I do see a tendency and I'm nottrying to say this is bad or
that it's a trend wide in theindustry but most adjusters have
(38:26):
some level of authority right.
So you're going to broaden thatauthority based on their
experience and theircomfortability and maybe the
account or the account specificservice instructions and so.
But sometimes you'll see, hey,I've given them $50,000 in
authority and all of a sudden alot of their claims bought up
right against you know $50,000,you know $49,000.
(38:47):
Yeah, it's like well, you know,this is kind of odd.
So you know, and you go backand you're like you start
questioning that practice andwhat you hear is like, oh well,
I didn't want to have to fillout the form or I didn't want to
have to do the documentation toget to take it to the next
level of management.
So how do you address that?
You know, for your organization, greg and or Julie, like what
(39:10):
have you seen?
Like how do organizations liketear down that wall and simplify
that process?
You seen, how do organizationstear down that wall and simplify
that process.
So adjusters are willing tobring up the reserve.
And my president of theorganization which I loved it
when he said this he said, hey,bad news doesn't age well and to
me an adverse reservedevelopment is bad news.
So I want to be on top of those.
And how do we encourage theindustry as a whole to be more
(39:35):
forthcoming and be forthcomingnot more forthcoming but be
forthcoming on reserving,because I don't know that it's a
huge problem.
I definitely see it, but maybesome best practices around that.
So a little bit of a loadedquestion, I apologize.
Speaker 1 (39:48):
No great questions and I think these are real
challenges.
Obviously, I think part of itis talking about it all the time
and I think you kind of hit onthat.
Like in our department meetingswe talk about all the time, you
know, let's get those reservesup, let's make sure we got them
to where they need to be, let'smake sure they're
well-documented.
So if you're not here tomorrowcause you won the lottery, we'll
(40:10):
go with a positive, a positiveoutcome that, uh, you know the
next person can pick that up andyou're not putting pain on them
.
And I think there's no silverbullet to this, but I think
training, auditing, reviewingfiles and being involved all
those things matter.
One thing we do that I think ishelpful is we do catastrophic
claim roundtables every twoweeks.
(40:31):
We talk about these claims froma reserving perspective, from
an injury perspective, and weinvite everybody in on those
because we feel like everybodycan learn together and somebody
might have an idea that somebodyelse hasn't thought of.
So those are some of the thingsI think you know.
I know in a past life Juliemanaged an examining team and
(40:52):
had to probably look at some ofthese things from that
perspective.
Julie, what are your thoughts?
Speaker 3 (40:57):
I think probably one of the key things that might
prevent adjusters from diving inand really looking at reserving
as the medical andunderstanding medical.
It's intimidating and if youdon't have a medical background
which I would probably say 80%of our industry does not that
are actually claims adjusters.
Now you're having to think likea doctor and you have to
(41:18):
understand medical terminologyand now figure out how does that
impact a claim.
And many years ago there usedto be a requirement that you
took medical terminology so youunderstood what medical terms
mean.
Now you're kind of on your own.
You've got to, like I said,google it, you know and look at
and try to understand it andlearn and as you get more
(41:39):
experience you feel morecomfortable with those things.
I think the other thing isintimidating is just the value.
I don't know how many timesI've seen people not reserve
something because it's more thantheir authority or it's not
necessarily because they want toavoid reserving over the
authority.
It's intimidating to come andsay I want to put on a million
(42:01):
dollars in a reserve.
That's kind of whoa and to me,years of experience, a million
is nothing.
It's like oh, seven, five,eight, doesn't matter, it is
what it is and I think thatconcept of how you reserve a
file for $20,000 and the processthat you use at reserving that
claim for $20,000 is absolutelyno different than how you
(42:22):
reserve a file for $10 million.
Now, understanding all thedifferent components is
obviously based on experienceand your level of understanding,
but the philosophy and theprocess and the resources and
tools is identical, no matterwhat stage of that claim you're
in financially.
And I think if you can removethat fear factor and that you
know you said draw the curtainsback and adjusters understand
(42:45):
that, I think they'll be alittle less fearful and more
fearless in going in andtackling a reserve.
Secondarily, I mean it's alsoit takes time.
I mean it takes time to sitdown and actually reserve a file
and it doesn't matter whatlevel it is.
And I think, as organizationslook at their financial health
and how well we're doing inreserving is get to the key.
You know the key drivers as towhy we might not reserving.
(43:07):
Is it an educational level?
Is it?
You know we're understaffed.
You know, are we allowing ouradjusters enough time to
thoroughly evaluate?
And it goes back to the oldadage penny wise, pound foolish.
If you just add one adjuster,that one adjuster salary and all
the benefits associated aretaken care of by one mistake in
reserving.
So if you can avoid it, itmakes more sense to hire an
(43:29):
adjuster than it is to losehundreds of thousands of dollars
in a claim that wasn't reservedproperly.
So you've got to thinkholistically about reserving and
really understand what'sdriving our inability to get
reserves done correctly, whetherit's as a whole or individuals,
and then from there startbuilding that person's
capabilities by looking at thedifferent resources available to
(43:51):
help them achieve those kindsof goals that they need to
achieve to be successful in therole I thought that was
fantastic, julie, you've said itbetter than me.
Speaker 1 (44:04):
I thought you explained that very well.
Well, first of all, I just wantto say I appreciate all of the
information you shared today.
I felt like we tackled a prettytough topic that could be
pretty company specific and didit in a way that I almost feel
like, no matter where you work,you could gain something from
this that could help you be alittle bit better at what you do
.
One of the things, julie, we'redoing this season is I'm trying
to put some good vibes out inthe universe.
(44:26):
I felt like there's plenty ofnegativity, and so I decided to
end each episode talking towhoever our guest was and asking
them this question what is thefavorite part of what you do
each day?
So, of all the things that youdo, what gets you going in the
morning or what gets you excitedabout what you do?
Speaker 3 (44:47):
Well, obviously I enjoy the claim process and, if
you can't tell, I'm passionateabout reserving.
I love the claim process andthe challenges that are faced
with each claim.
I learn something new all thetime, which definitely keeps
things interesting.
And since we've been focused onreserving, I'll add that
reserving, while it's difficultat times, is a challenge I
really like to tackle and it'sreally satisfying to see a file
(45:09):
that's been managed well and thereserves were accurate
throughout the life of the claim, were accurate throughout the
life of the claim Aside from myteam and the people I work with,
which is it always makes thejob that much more doable and
fun.
But really, one of the thingsthat just really gets me going
is the satisfaction I get fromseeing an injured worker recover
enough to return to work orfind that resolution to their
(45:30):
claim that works well for them,and I know that I've been a part
of that journey.
There's something innatelysatisfactory about that and you
know, kind of in that empathyfactor.
You know that I haven't gonethrough it, but I have empathy
for what they're going throughand regardless of it's a
litigated claim or not, itdoesn't matter.
You know, I try to think ofthese people.
It's like how would I want tobe treated, and I try to live by
(45:53):
that every day.
And then when I see that we'vehad some kind of satisfaction,
satisfactory conclusion to aclaim where they're made as
whole as they possibly can bemade, it's really quite a perk
of the job.
Speaker 1 (46:08):
And it's fantastic.
I feel like that's what we'rein the business of.
Sometimes we forget we're inthe business of helping people
get back to work and get back tolife, and those are the best
moments, when you know thatyou've made, you've done the
right thing and everybodybenefited from the right thing
that was done.
Speaker 3 (46:24):
Yeah, and I and I feel supported by the company.
So it's nice, you know, it'snice to have that support that
you're, you're being supportedto do the right thing thing
regardless of the cost, and tohave that is it says a lot about
where I work and thesatisfaction I get out of my job
every day.
Speaker 2 (46:42):
That's awesome and it's a mind shift right, because
I mean I know your organizationis big on the Home for the
Holidays team and I think ifthat's promoted through the
whole organization it promotesthe mentality with the different
departments and underwritingand sales and claims.
You know it's like we're allhere to do a different piece but
(47:02):
it's all for that injuredemployee and how do we get them
back to a gain pool situation?
Make the wrong right kind ofmentality, appreciate it.
Thanks for the time, greg and.
Speaker 1 (47:14):
Julie.
Oh no, it's been fantastic, andI want to thank Matt and Julie
also.
In the background, noteverybody gets to hear, but
we've got Natalie Dangles whodoes our blog each week, so I
encourage people to.
If you didn't have time tolisten and you want to read, you
can do that, or if you justwant to go back and use it as a
reference of what went on in theepisode.
She does those every other week.
(47:36):
And then a special thanks toJacob Holmes, who's also hiding
in the background.
I always say he's my.
I've got teenagers and theyhave filters on their phone.
He's our filter.
He makes us look amazing.
So we all come out ofeverything looking like rock
stars.
So thank you, jacob, for that,and I just remind our audience
to do right, think differentlyand don't forget to care.
And that's it for this episode.
(47:57):
Thanks everybody.
We'll catch you next time.
Hello everybody and welcome to Adjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, Alabama, andBerkeley Industrial Comp.
And I'm excited to share withyou this special rebroadcast.
I find myself very fortunate towork with Julie Greer.
She's an amazing, talentedadjuster who has spent so much
(00:33):
time in the industry, and one ofthe things that I wanted to
tackle was the importance of theart of reserving.
I really do believe reservingis an art.
It takes years of experience tobe good at reserving, and Julie
has a skill of reserving someof our most complicated claims,
(00:53):
and so obviously, everyorganization is going to have
their own reserve philosophy,but Julie does a very nice job
in this episode, breaking downwhy reservingerving is important
and some of the steps to makingsure that that philosophy is
documented in a way for othersto understand.
So I definitely encourage thisone for adjusters, no matter
(01:14):
your experience, and also see itas a great training resource
for new employees.
So enjoy this one with Julie.
Thanks everyone.
Hello everybody and welcome toAdjusted.
I'm your host, greg Hamlin,coming at you from beautiful
Birmingham, alabama, where it isfinally starting to get cold
but I guess, having grown up inthe Midwest, we wouldn't call it
(01:36):
cold.
And then with me today is myco-host, matt Yaling.
Matt, if you want to introduceyourself.
Speaker 2 (01:45):
Good morning everyone .
This is Matthew Yaling withMidwest Employers Casualty, and
I'm coming from the banks of themighty Mississippi up in St
Louis.
Speaker 1 (01:53):
Missouri.
Are you guys going to get snowanytime soon here, Matt?
Speaker 2 (01:57):
Well, we had some over the weekend actually, but
it stuck around for about 30minutes and then it's gone.
So I like it when it does thatpersonally.
Speaker 1 (02:06):
Yeah, well, I still got a couple of snow shovels in
my garage that are just likerelics, since we don't really
see that down in Birmingham.
I think we've had two dustingsin four years and both were gone
within two hours, so I guessthe kids have seen it, but and I
bet it shut down everything.
Oh yeah, there's nothinghappening.
If that happens, the world endsso well with us.
(02:29):
Today we've got a special guest, Julie Greer, who's our Senior
Catastrophic ResolutionSpecialist for Berkeley
Industrial Comp.
So we're glad to have her withus.
Julie, if you could say helloto everybody.
Speaker 3 (02:41):
Hello everybody.
Everybody's talking about wherethey're from, and I sit here
down in the great state of Texas, where typically it's very hot,
but I've actually had somefreezing weather here over the
last week and I'm already overit, so I'm ready for the warm
weather again.
Speaker 1 (02:57):
Now you're in the Dallas area, dallas-fort Worth
area, is that?
Speaker 3 (03:00):
right Correct.
Just north of Dallas, in theMcKinney area, which is
considered North Texas, suburbof Dallas.
Speaker 1 (03:07):
Excellent.
Well, we're glad to have Juliewith us.
We're also glad to have her asa member of our team.
Julie brings a lot ofexperience.
For those who don't know,berkeley Industrial Comp is
focused on high hazard workers'compensation insurance, which
means we see very difficultinjuries on a fairly regular
basis, although we don't have alot of frequency in our losses,
(03:27):
and so Julie's part of ourcatastrophic team that helps us
manage those challenging claimsand has a lot of experience, so
we're very fortunate to have herwith us.
The topic of the day isreserving claims reserving and
we were actually chatting alittle bit before this started.
This is probably one of thoseclaims 101 topics that we
(03:50):
haven't covered in nearly twoyears of doing adjusted, so we
felt like it was time.
So Julie's going to be ourexpert on that today, because I
think Matt and I are too farremoved now to consider
ourselves experts at reserving.
I don't know about you, matt,but that's where I'm at now to
consider ourselves experts atreserving.
Speaker 2 (04:06):
I don't know about you, matt, but that's where I'm
at.
I do want to add my owndisclaimer.
Everyone, every company,reserves a little differently.
So anything we say or commenton, we're not giving away the
secret sauce here, but I thinkthere's some common best
practices in the work compindustry that we're going to
comment on reserving From anexcess carrier, midwest
Employers' excess work compcarrier that we're going to
comment on reserving, but froman excess carrier.
(04:26):
So Midwest Employers is anexcess work comp carrier.
I see the reserves on a lot ofthird-party administrators, a
lot of our other insuranceentities and account partners.
So I see a lot of differentreserve philosophies and
different styles of reserving.
So always interesting, andthat's why I was telling Greg
earlier I'm curious to see howthis discussion pans out.
It so always interesting andthat's why I was telling Greg
earlier, like I'm curious to seehow this discussion pans out,
(04:48):
it'll be interesting.
Speaker 1 (04:49):
No, I'm glad to have you.
I think your perspective willbe interesting, having seen so
many different styles, and Ithink we've all worked actually
in this group for differentcarriers, so we've all seen
different ways of doing that,and so it should be a pretty
interesting discussion.
I know for myself I've beenjoking.
We have a couple team membersthat moved on to new positions
(05:10):
and so we're hiring and in thatprocess I've been helping out
with some claims tasks.
Again, I'm a big Marvel fan andI kind of feel like Fat Thor
right now.
I can wield Mjolnir, but it'sjust not like how I used to.
So I'm glad that we havesomebody who's in the trenches
that can talk about this topic.
I definitely have my ownthoughts and we'll be sharing
(05:31):
them, but I think Julie's goingto do a fantastic job today.
I thought we'd start, julie, byyou just telling us a little
bit how you ended up in claims.
We always like to start withthis question, and I'm sure when
you were young, this was yourdream job to be an insurance as
a claims person.
So tell us, how did it happen?
Speaker 3 (05:52):
Well, like so many, it was quite by accident.
I was just out of school and Istarted looking for work and I
absolutely had no idea what Iwanted to do.
So I applied for a front deskjob at what turned out to be an
insurance company and the claimmanager came out and brought me
back to her office and said shehad noticed that I had been to
(06:12):
college and wanted to know ifI'd be interested in being a
claims adjuster.
So and I remember telling her Ihad no idea what that was or
whether I was qualified, and shejust smiled and I think back
it's probably an evil smile andsaid don't worry, you'll get the
hang of it.
And next thing I knew I wasgiven a book of rules and
regulations for the jurisdiction, 200 plus files, an assistant
(06:34):
to help with the payments andstate form filing.
I didn't even know.
I didn't know the differencebetween a defense attorney, a
plaintiff attorney, and Idistinctly remember asking the
first attorney that called me ifhe was a good guy or a bad guy,
and so I mean, and I I amhorrified thinking back what he
(06:55):
must've thought.
He kind of laughed and said I'mthe bad guy and, uh, you, you
take this to your supervisor.
And so from there, you know, itwas truly a baptism of fire
into the claim world ofinsurance.
But in about six months I wasalready licensed and I was
really good at what I was doingand I found I really loved the
challenges of handling everyaspect of the claim and
(07:16):
eventually I went on to handleboth work comp and liability
claims, which has really servedme well over my career in the
insurance industry.
Speaker 2 (07:24):
That's awesome, julie , which has really served me
well over my career in theinsurance industry.
That's awesome, julie, greatyeah, thanks for sharing that.
So when we talk about reserving, we can probably vacillate on
just what that means.
But to start at the beginning,what is a reserve from a claims
perspective?
Speaker 3 (07:43):
Well, in the simplest sense.
I mean it's the amount of moneyyou set aside to cover the
legal and financial obligationsthat are arising out of a claim,
and it's much more complex thanobviously.
I mean we've got Sarbanes-Oxleyand other regulations that
require insurers to accuratelyaccount for their liabilities.
Insurers are subject toquarterly and annually reporting
, as well as audits, and ifthere's an indication of
reserving issues, you know thesewill need to be satisfactorily
(08:06):
addressed.
And if we're insured tocontinue to do business in a
state, you need to have accuratereserving.
And the key is, you know thekey word is accurately.
You know from a claimsperspective it's often a
challenge.
You know all the informationthat's needed is not necessarily
available when that claim comesin.
There's uncertainty what's theextent of the injuries?
(08:27):
Is medical care?
What's that going to look likeover time?
Is there a return to workpossibility with our customer?
Can they accommodate the returnto work?
All this can be difficult topredict and, depending on the
reserving protocols or bestpractices of the insurer,
initial reserves might be basedon what they call a statistical
reserve.
So every new loss that comes inthe door is automatically going
(08:49):
to be assigned the same reserve.
The second approach is literallya best guesstimate, and that's
to allow for benefits to be paidwhile the necessary information
is gathered and reserves can bemore accurately established.
Once you get that sufficientinformation, it's at that point
that you're going to do yourdetailed evaluation, which is
necessary to ensure again thatwe have appropriate funds that
(09:11):
are being set aside to cover theanticipated future costs of
that claim.
You know, once that claim isestablished, that focus then
shifts to monitoring theaccuracy of the reserve as new
information becomes available,and I think that piece is
critical.
I mean, once you get thereserve set, you can't just let
it go.
You need to be looking forthose changes in condition.
You know, what was thought ofmaybe as a simple back claim
(09:32):
coming in the door now, forinstance, is now progressing to
surgical intervention.
Conversely, though, you know,what we thought was a severe
injury is not as significant.
So we might look to lowerreserve to more accurately
reflect the exposure from whatwas initially determined.
Speaker 1 (09:47):
I think those are great points, julie.
You know, for me I think aboutit a lot Like if you were going
to go on vacation and you hadsomewhere fun I'm going to make
it something more fun thansomebody getting hurt.
But you know you have to planout.
Well, what's it going to cost?
What are the plane ticketsgoing to be?
What is it going to cost to dothe activities?
Is it all inclusive resort ordo I need to be paying for all
(10:10):
the activities we do?
And then when you get there, youfind out that some of the
things you plan for either areless or more than what you
thought.
You find out that food was waycheaper than you thought or way
more expensive, and you have toreassess your budget right and
make some choices on okay, well,what does this look like?
(10:31):
And claims that's really at ahigh level what we're doing, but
we're doing it with theknowledge that we have that
changes and I thought you did anice job of highlighting that.
I know, talking to our actuary,one of the things that would
give him the most pain is if weare not being consistent on how
we evaluate reserves, becauseand Matt hinted at this working
(10:53):
with different TPAs, differentcompanies everybody might have a
slightly different way to goabout reserving their claims,
but if they're doing it exactlythe same way, then it makes it
easy to anticipate what could beout there From your perspective
.
Why is having a reservephilosophy within your company
(11:14):
that's consistent important,julie, and you've worked a few
places as well.
Speaker 3 (11:19):
Yeah, I mean, one thing everybody looks at is the
overall outcome, making surethat we're reserved for that
ultimate outcome.
But I kind of look at thereserve philosophy as a roadmap
of sorts.
You know it provides what youwere talking about, that more
consistent approach.
You know when and how reservesare calculated.
You know it's also an insurer'sbest practice that will ensure
(11:40):
compliance from a regulatorystandpoint.
And I think what's importantfor an adjuster in following
these established guidelineswith this reserving philosophy,
it's going to ensure thatconsistency, like you said,
across all claims.
And that's the critical pieceof it, along with the adherence
to best practices.
And since the insuranceindustry is such a heavily
regulated industry, how well wemanage our claims from a
(12:02):
fiduciary standpoint can eitherhave positive or negative
long-term impacts on the abilityto do business.
Part of the auditing process isreviewing whether or not
adjusters are following the bestpractices, operating within
their specific authority andadhering to the insurer stated
reserving philosophy, whateverthat might be.
Speaker 2 (12:20):
I appreciate that summary and I like Greg's
reference to actuarial walkingover and you know asking that is
this consistent with ourreserving philosophy?
It reminds me of you know goinggolfing with with actuarials.
I don't know if you've evergolfed or golfed with actuarial,
but the one one actuary willline up hit the ball dead to the
right.
The other one lines up, it's adead to the left.
(12:42):
They look at each other and sayperfect.
Speaker 1 (12:48):
Yeah, no, that's exactly it, and I think what
I've learned from them is theyhave a lot of pressure on them
because they're basically beingasked to be fortune tellers.
They're being asked to lookinto the past and predict the
future, and if our past isinconsistent, then they're going
to have a hard time evengetting in the ballpark of
what's going to happen.
(13:08):
So, being consistent in thatphilosophy, whatever that
philosophy is within yourcompany, I think that's really
important.
One of the things we hear aboutis under-reserving.
I'm sure Matt has an opinion onthis, being an excess carrier,
they don't like surprises either.
But, julie, what are yourthoughts on the impacts of
under-reserving?
Speaker 3 (13:37):
So you know, as mentioned previously, you know
that reserving is setting asidethat money, you know, to cover
an insurer's financialobligations.
And here's the part that getscomplicated is it's not.
You know, like you mentioned,personally I'm not setting aside
, you know, $50 to do X here andnow.
You've got to do that here andnow on the reserve on a claim
file.
But you've also got to projectinto the future, which is really
difficult to do.
You know, and we always jokeabout having crystal balls and
(13:59):
you know voodoo magic and allthat other thing to you know, to
predict something.
We don't really know what'sgoing to happen, but we have to
be as good as we possibly can inorder to make sure there are
sufficient funds out there onthese claim files to make claim
payments when they need to bemade.
So under-reserving has a numberof negative downstream impacts
and this is where you know,actuary, you know they're under
(14:20):
the gun constantly to make surethat we're doing what we need to
be doing on the front line.
If an insurer is unable to meetits financial obligations, it's
going to impact the financialstability and one of the things
it leads to is a downgrade infinancial stability and rating
from firms such as AMBEST.
So you see, an insurancecompany that's A-rated, a-plus
rated, a-plus plus rated that'swhat you strive for as a
(14:43):
financial institution.
You want to be rated highly andif you're downgraded in the
stability rating, it's going toresult in fewer potential buyers
of the insurance product,ultimately running the risk of
insolvency.
And as a customer, wouldn't yourather be with an A++ rated
company?
Even as an adjuster, I want towork for a company that's highly
rated and this is usually agood indicator.
(15:05):
The company is well managedfrom a financial aspect.
The other impact is on futurepremiums.
The reserves on open claims arepart of the calculations an
underwriter uses in establishingthe loss experience of a
company.
So if the loss experience isunderstated because the reserves
are insufficient, the insurerwill be charging an inadequate
(15:25):
premium, which is going toresult in lower profits and
again potentially pushing thecompany to insolvency.
Speaker 1 (15:31):
I think you hit on it perfectly there and I won't go
into all the details, but I'veworked for places that have been
on both sides of that fence andthere's nothing more stressful
than when your AM best rating iseither changed or the outlook
has changed.
That creates a lot of pressureand stress within a company.
And you're right, people wantto work for places where they
(15:53):
know that they don't need toworry about those things, right?
People want to work for placeswhere they know that they don't
need to worry about those things.
Matt, I'm curious from yourperspective you mentioned this
as an excess carrier what keepsyou up at night when there's
under-reserving by somebody thatyou're doing business?
Speaker 2 (16:05):
with Quite honestly.
So if it's an excess levelclaim, we do look at the TPA's
reserves, but we have enoughstatistical data that we
primarily will ignore theunderlying reserve on the
account.
If we're having a claim open andwe're tracking it ourselves, we
set our own independent reserveand from an excess perspective,
(16:29):
we're doing that independentbecause this goes back to some
previous conversations TPAs andcarriers are set up for
frequency claims and they're notgenerally set up for the big
bad ugly claims that make up100% of an excess carrier's
caseload.
So we set our reservesindependent of whatever the TPA
or whatever the underlyingcarrier.
(16:51):
Self-administered partnersreserves would be so it's a
little different.
Self-administered partnersreserves would be so it's a
little different.
You know, in each GPA, you knowI can tell you reserves
differently and we see different, you know different best
practices and I get to, I get tosee a lot of those best
practices.
So the philosophies aregenerally very similar but you
can definitely see differenttrends in different places.
And, and you know, reserving isa tough topic because in some
(17:14):
states you know you're reservingtotally different because and
we're going to get into some ofthese examples but you know like
in this part of the state, youknow, a carpal tunnel claim is
worth this.
If I go 300 miles north of StLouis, the carpal tunnel claim
is maybe twice as expensive, youknow, in Chicago, illinois,
versus what it would be inCarbondale Illinois, what it
would be in Carbondale Illinois,and that's probably not 300
(17:36):
miles.
But the point is, you know, youhave to know where you are,
what the circumstances of theclaims are, and we always joke.
You know, not joke, but youknow reserving is more of a soft
science, right, it's not alwayshard and fast rules.
And then we talk a little bitabout, like stair-stepping, and
there's a question for Julie iswhere do you see stair-stepping?
(18:01):
And you talked a little bitabout and I mentioned it even
too the dynamics of a claimchanging.
What's the difference betweenrecognizing the changing
dynamics or something's changedin this claim?
That's an accepted claim versusstair-stepping, like, maybe you
know, can you talk to both ofthose points, because I see this
all day where you know acondition worsens, but you know,
(18:24):
stair-stepping, I think, is atotally different thing than,
hey, there's a worsening of thecondition.
Speaker 3 (18:29):
Yeah, well, at stair-stepping.
I mean I look at stair-steppingas kin to the under-reserving.
I mean not to sound hokey, butit's kind of like the stepsister
of under-reserving, you know,these small incremental
increases to cover just enoughof what needs to be paid at any
given time and it's just asdetrimental as under-reserving,
you know.
In effect, you know it isunder-reserving, I mean, and I
(18:50):
think this can be symptomaticperhaps of an adjuster not
understanding the context of theclaim or not utilizing
resources to accurately assessthe exposure over an appropriate
period of time.
So you're in the file andthey're going in for surgery and
you only have a few weeks ofindemnity.
So they pop up a little bit ofindemnity and they have to pay
(19:10):
for.
They say, oh, surgery, so theyput that in, but then they don't
think beyond, like there mightbe physical therapy.
Maybe now I need to assign anurse case manager.
I haven't seen any bills comein and I'm already down and I
only have X number of dollarsleft in medical.
Perhaps my original assessmentwasn't accurate at all.
But they never take the time toactually look at where the case
is, look at the medical reportsand look at the prognosis, and
(19:32):
look at the prognosis and lookat what the treatment plan might
be to project out accurately.
And I adjust reserves all thetime, so it doesn't necessarily
mean you have to know everydollar it's going to be spent.
But if you have the informationthere in front of you, that's
the point in time that you needto be doing it, not when you've
(19:53):
run out of money and then nowyou're popping up a little bit
more and a little bit more andit kind of goes back to what we
were talking about with Actuary.
They've already reported outfor the quarter and now the next
quarter.
Now they're having to reportthis big bump in reserves
because somebody finallyrecognized that we were
under-reserved on a file.
And the question is, why wasn'tthis done last quarter or last
policy period?
And you're left there standinglike well, because I really
(20:15):
didn't look at anything, and nowI'm being forced to put the
money up that should have beenput up.
You know, six, eight months agothe change in conditions a
little bit different, and thatkind of goes back to what I was
talking to you about.
Under reserving is, if you havea strain can make it easy.
Have a strain come in backstrain.
You know there's typicaltreatment, conservative care,
that happens.
But now all of a sudden, thecomplaints go on and now they
(20:37):
have an MRI or a CAT scan and itshows they have a herniated
disc and the doctor is nowrecommending surgery.
So now we know that thedisability is going to be much
longer, there might bepermanency.
We have to account for surgeryand recovery, and you know some
of the things that go along withthe cost of surgery.
So that's a changing conditionthat you did not have available
(20:57):
to you when you reserved thefile previously.
So now you go through the sameprocess of looking at what does
that exposure look like overtime, short term as well as long
term?
Speaker 2 (21:07):
Right, yeah, I appreciate that.
I think just to add on to thatcomment you know, and we you
know I work with a lot ofdifferent TPAs comment you know
I work with a lot of differentTPAs.
One of the things that you knowif we see consistent, like this
adjuster is setting the reserveat $5,000, a bill comes in and
it's a $5,000 bill and thenthey're not recognizing the
(21:30):
difference in that development.
And then you know they'readjusting the reserve every time
a new bill comes in.
So they're not reallyrecognizing the changes.
And you know we all are verybusy right in claims and claims
handling and that you knowthere's maybe a file that flips
through the cracks.
But when you're auditing thesefiles and you see like hey, it's
always with you know, bob thebuilder and it's, you know it's
(21:54):
on every one of his claims,that's when it becomes an issue
and it's probably a performancething when the reserving is not
consistent with the claimshandling reserving philosophy
for the organization.
So that's different.
But one bad one adjuster that'snot recognizing that I don't
want to say bad, but oneadjuster that's not being
proactive with setting thereserves for whatever reason,
(22:18):
may be impacting the wholeorganization in a very negative
way.
I mean reserving is verycritical.
I always preach to my staffit's reserving, mitigation and
settlement.
If you're not doing those threethings right and if you're not
doing the reserving, reservingthe critical part you can have a
(22:38):
claims organization thatdoesn't mitigate and doesn't
settle.
If you have to reserve setappropriately, but anyway.
Speaker 1 (22:47):
No, you're right, Matt.
It's going to be reflected inyour rates when you're trying to
renew.
So hopefully we're doing thoseother things because we want to
have positive outcomes, but atthe end of the day, if your
reserves are off, everythingcould be off, and no one wants a
$20 million or $30 millionsurprise where we find out oh,
it turns out all these fileshave not been where they needed
to be.
That creates a lot of heartburnwhen that happens.
Speaker 3 (23:11):
I think also companies do themselves a great
disservice by not educating theadjusters.
I mean, you think of an adjuster, you think, well, they just
adjust claims, they processpayments or they manage return
to work and they litigate.
But they are the financial backof the company and if you don't
understand as an adjuster whatthe impact is to the company and
(23:34):
then the downstream effects soif we're writing business but
yet we're spending more thanwe're bringing in, it affects
not only the financial stabilitybut from a personal standpoint,
my ability to maintain a jobwith the company bonuses raises.
If there's none of this surplusfrom the profits we make
because we're managingeverything really well.
You make it real for them andmake them understand, provide
(23:57):
them that education from anactuarial and underwriting
standpoint, then you know thatevery time I pick up a file,
it's not just this file that I'mimpacting, it's my teammates,
it's myself, it's otherdepartments and the company as a
whole and I think that piece ofit.
Once you make it more personallike that and they really
understand the impact, then Ithink people tend to get better
(24:21):
at what they do, because thenthey understand how much control
they have over that part oftheir jobs and their success in
the role of an adjuster.
Speaker 2 (24:27):
I love that.
I 100% agree.
Thanks for bringing that up,because I think we're going
through that here at Midwestwhere the claims and the
underwriting and the marketingand sales.
We need to know what our impactin claims is for the
underwriting and the actuarialpiece.
I'm not saying everyone needsto be an actuary or everyone
(24:50):
needs to be an underwriter.
I'm saying you need to know andunderstand when we do this it
impacts how we sell.
You know how we sell ourbusiness and when you do this it
impacts underwriting andactuarial.
So having that relationship, youknow I think we all came from a
similar organization where, youknow a lot of those people were
all siloed and apart from eachother and that's one of the
(25:10):
things I really appreciate withour organization.
I know Greg's is the same wayat Berkeley Industrial Comp is.
You know, actuarial is rightdown the hall or maybe in the
next room or the next office orcube, and so it's important to
have that stuff close by andhave an understanding of your
impact in the organization andwhat that means for all those
other steps.
So thanks for doing that, john.
Speaker 1 (25:32):
No, I couldn't agree more and I think you know,
understanding the 5,000-footview makes it easier when you
zoom back in to know how whatI'm doing impacts the company
and what things I can do thatmove the needle.
Julie, as you think aboutreserving, I want to zoom in on
that a little bit and talk aboutsome of the things, some of the
(25:53):
details that make an impact onthe reserves.
That, if you were a claimsadjuster, specialist examiner,
whatever the word title is foryour company, what are some of
the things that you should bemindful of when you're thinking
about a reserve?
Speaker 3 (26:09):
Well, I think, breaking it down.
One of the first things I lookat is you know, the age,
education, taking it down.
One of the first things I lookat is you know, the age,
education, maybe transferableskills of an injured worker.
Also, the mindset of theinjured worker.
You know you have an individualwho's suffering a work-related
injury.
That can be very impactful.
You know, here they are working, earning a living for
(26:31):
themselves, for their families,and all of a sudden now they've
been injured and that's beentaken away from them, along with
any sense of control.
So not only is an injuredworker, you know, trying to
recover from an injury, they'realso financially impacted and it
can be incredibly stressful forthem.
So it's important you justpartner with the injured worker,
you know, to ensure therecovery process is as
stress-free as possible.
You know, and with a positiveexperience, it can have such a
(26:52):
great impact on the bestpossible outcome of the recovery
process and then the overallfinancial outcome of the claim.
So I already get my mindset andyou know what am I working with
, who am I working with and whatpotentially can I do with this
injured worker to make sure theyhave the best outcome possible.
And then then, how does thattranslate out into the overall
exposure on the claim?
You know you're looking atcomorbids.
(27:15):
It's important you know,determine what impact the
comorbid might have on recovery.
You know, as well as anylong-term impact from an overall
health standpoint.
Working with the customer isalso important.
You know what is their abilityto bring the injured worker back
to work If there arelimitations.
And is this just a short-termfix or would they have a
long-term perspective as well?
Because if they can accommodatemaybe a short term, but what if
(27:36):
those limitations are therepermanently?
Do I have a resource with thecustomer?
Because if not, it's going toimpact indemnity and potentially
the medical, because you getall of the factors of not being
able to return to work.
It just exponentially impactsthe overall financial expense of
the claim file.
And is the medical care qualityin alignment with goals of
(27:58):
recovery to return to work andif not, what steps can be taken
to make sure the best carepossible is being provided?
So if you're not getting whatyou need out of the doctor and
the recovery is not progressingand the necessary tests aren't
being done and there's really nofocus of the doctor on the
prognosis and outcome and atreatment plan with timeframes
built in, then maybe it's timeto get another doctor and maybe
(28:19):
get a second opinion or see ifwe can get better medical care.
And, of course, litigation whatimpact will a litigated claim
have on management of theexposure and long-term impact on
cost to bring it to resolution?
Sometimes, no matter how wellyou work with an insure worker,
for whatever reason, they stillmay get an attorney and that
process has to be thought aboutand brought into the impact
(28:42):
it'll have on the exposure overa long-term basis and as you
look to either settle the claimor bring it to some form of
resolution.
Those are just some of the keyelements that will impact how we
look at the overall exposure,but I think those are some of
the key that I look at when I'mlooking at how I want to reserve
long term.
Speaker 2 (29:00):
You just said a lot of things and you've had a lot
of experience and expertise inthe industry, but for a newer
adjuster or somebody that'smaybe putting together a
reserving best practiceguideline, what resources are
you aware of or what resourcesdo you know that maybe we could
point some people to and say,hey, you know, consider doing
this.
Or can you have a list or someexamples of resources?
Speaker 3 (29:24):
Yeah.
So the indemnity and I thinkeverybody can agree medical is
the most difficult part.
I mean the indemnity isrelatively easy to evaluate
compared to the medical.
Your jurisdiction is going toprovide guidelines that spell
out the limitations, along withother factors like return to
work potential.
You know whether or not there'simpairment other things that
each jurisdiction has that'sunique.
(29:46):
That'll aid in reserving forthe indemnity.
The real challenge is estimatingaccurate medical.
Some of the resources I rely onfirst and foremost are medical
records.
The different components of amedical record will really help
you spell out not only what theinjury is but what kind of
treatment is going to beanticipated.
And then again the treatmentplan and then prognosis, and
(30:06):
that goes a long way intohelping guide you into the
number of weeks and the othercosts that you need to factor in
pharmacy, physical therapy,nurse, case manager.
So that's a good roadmap tostart with.
If the physician isn'taddressing these two key factors
, then you need to ask for it.
I mean, it's as simple as that.
You need to have good medicalreports and a good rapport with
(30:27):
the doctor's office to get thatinformation so that you're both
on the same path to get thisperson either back to work or
getting the right care they need.
I also rely on the ODG.
These guidelines are a goodresource and a standard
reference for evidence-basedmedicine you can get, and
they're not the end-all and thebe-all.
I mean carpal tunnel may onlybe X number of weeks that you
(30:47):
can expect disability, but thenyou've got to factor in the
other things as far as return towork options and if there's
comorbids and other things.
But it's a really goodguideline to give you an
indication of how long somebodymight be out and what kind of
care is involved in that type ofinjury and or surgery, et
cetera.
I use the National VitalStatistics to address life
(31:09):
expectancy and one of the things.
I don't know if it'sunderutilized, but it should be
utilized.
I use it on all my claims.
But a reserve worksheet.
It's a great tool to calculateexposures.
The components of a reservingworksheet can act as a mind
jogger to make sure all aspectsof the care have been considered
.
I don't know how many timesI've kind of hand jotted down
(31:30):
all the things that I'm thinkingand then when I go to put it in
the worksheet, I totally forgot.
You know a DME or pharmacy oreven my nurse case manager who
I've been working with, Itotally forgot to account for
those expenses.
So the worksheet helps me breakdown those different and then
and think, well, do I need that?
And if not, fine.
But if I do need it, I didn'tthink about it.
There it is right in front ofme and when you have those
(31:51):
different, like I said, carecomponents listed on a worksheet
you're not going to missaddressing, like you might if
you're manually trying tocapture each aspect of the care
provided.
Most companies have resources.
They have resource tools forpulling data at the claim level.
These tools are really great tosee the actual cost in a claim.
That can be replicated whencalculating out over time.
(32:12):
And to give you an example, Iestimate physical therapy each
session 175.
Yet when I pulled the claimdata on that same claim file, I
realized that I'm being chargedfor something and then with the
fee scheduling I'm actuallypaying 325.
So I'm almost 50% off on mycalculation on PT.
So pulling that data and reallylooking at the actual costs
(32:33):
that are coming in helped mereplicate that out when
calculating out over the future.
I've been in claims for manyyears and I'm still learning
something new all the time.
If I can't readily findinformation.
I'll Google it.
I mean, there's an amazingamount of information out there
that helps me understandinjuries recovery time costs
Matt, you mentioned thatsomething might cost $5,000 down
(32:56):
here in Chicago, but up inCarbondale it might be less
expensive.
I did it the other day lookingat life care, the flights it's.
Down here in Philadelphia itmight have been $25,000, but up
in upstate Pennsylvania it'sonly between $9,000 and $12,000.
So I simply Googled it and Ican find that information that
might help me factor in what Ineed to set aside to cover that
(33:19):
cost.
And last but not least, yourexperienced coworkers and team
managers.
I mean, what better place tostart than the people you work
with every day?
I mean most people.
You have a variety of peoplewith different experiences, and
I'm chatting constantly, notonly with my manager but my
teammates, like hey, have youever seen this before?
What should I expect?
Your nurse case managersthey're a wealth of information
(33:41):
as well, and they can help guideyou on things that you might
not have thought about.
So those are some of the keythings that I look at that help
me every day and even with allmy experience, I still utilize
these things religiously.
Speaker 1 (33:55):
I think you hit on so many good resources there, so
hopefully people will rewind andlisten again, because I think
there really is a lot there andyou're not out on your own.
That's the biggest thing I'velearned and you are limited by
your experience.
I remember being a new adjusterand I had a claim where the
injured worker had a knee injuryand was 400 pounds and five
(34:18):
foot one and he has a newadjuster, you know, and had
diabetes and a number of otherhealth issues.
This was years and years agobut I remember, you know, not
understanding I went into OGGguidelines and saw, well, what's
a meniscal tear cost, you know?
And it gave me some guidelines.
And I remember the senior on myteam saying, well, wait's a
meniscal tear cost.
And it gave me some guidelines.
And I remember the senior on myteam saying, well, wait a
minute, he's going to have to beweight bearing on this knee.
(34:40):
He's very heavy.
That's going to cause a lot ofproblems with his recovery.
You need to be thinking aboutthat.
These guidelines aren't goingto tell you all that.
So in that case I went to aresource, but I still needed
help from somebody with moreexperience that could kind of
point me in the right directionand say, hey, have you thought
about this?
And she wasn't wrong.
I mean, that was a difficultclaim and we were able to
(35:01):
identify that pretty early thatthere were some challenges there
.
So I think you made some greatpoints on what's out there as
far as resources go and youtalked about this a little bit.
But when you talk aboutdocumentation, so we know like
in a perfect world every claimwould live with the person who
had it from the day they got it.
(35:22):
And I think we all know that wedon't live in that world, that
files get moved around, peoplehave new opportunities, people
retire, people get promoted,people leave the company and
when somebody is taking over afile for somebody else, that can
be really challenging.
So talk a little bit aboutdocumentation and from your
(35:42):
opinion, julie, and some of theroles you've been in and why
that's important.
Speaker 3 (35:47):
Documentation.
I mean it tells the story andit sets the roadmap for where
the claim is going.
I mean, when you're looking atreserves in particular, you want
to have a detailed rationalespelling out the basis for the
reserve and the duration.
What are your short-term goals?
What are the long-term goals?
And when I'm looking at myfiles I look at short-term and I
(36:07):
look at long-term each andevery time.
Are there key milestones toconsider?
I reference my reserverationale every time I'm in a
file to see if what I hadplanned is still on track or if
I need to make adjustments basedon new information, detailed
documentation.
It actually forces you to thinkabout how that claim is
developing and what the plan isto mitigate the loss and bring
(36:29):
the claim to resolution.
So if you're really thinkingabout all the components and
you're thinking about your claimand you're kind of just putting
out that story, I do myrationale first, because then
that helps me, then level set onwhat I want to set aside in the
way of funding for all of thoseand do a rationale.
It's the rationale first andthen it dictates what my
(36:51):
breakdown is going to be and thedocumentation.
Like you have to look at themitigation of loss and how
you're going to bring it toresolution.
So that's part of your plan.
Within your rationale and I knowall of us have heard this a
million times the file shouldspeak for itself and this is
definitely important from areserving standpoint.
(37:13):
I don't know how many timesI've picked up a file and it has
a couple of items in thereabout the indemnity breakdown
and there's permanency, but Ihave no idea how they came up
with that permanency number.
I have to then go back and doresearch to figure out.
We handle a lot ofjurisdictions in my current role
, so I'm not an expert in everyjurisdiction, but I have no idea
(37:33):
how this is calculated andwhere those numbers come from.
What is it based on?
And there's not enoughinformation in the rationale.
There is even a rationale therethat helps guide me to
understand what the adjuster wasthinking.
Same thing if my manager picksup my file and is reviewing my
file, she should be, or heshould be able to go in and look
at my rationale and see if itmakes sense for what I'm
(37:54):
calculating out over the life ofthe claim at that particular
point in time.
Speaker 2 (37:58):
Yeah, thanks for sharing that, and I think you're
hitting on something that maybeit's a question for both you
and Greg is looking intodifferent partners at the TPA
level and carrier level.
I do see a tendency and I'm nottrying to say this is bad or
that it's a trend wide in theindustry but most adjusters have
(38:26):
some level of authority right.
So you're going to broaden thatauthority based on their
experience and theircomfortability and maybe the
account or the account specificservice instructions and so.
But sometimes you'll see, hey,I've given them $50,000 in
authority and all of a sudden alot of their claims bought up
right against you know $50,000,you know $49,000.
(38:47):
Yeah, it's like well, you know,this is kind of odd.
So you know, and you go backand you're like you start
questioning that practice andwhat you hear is like, oh well,
I didn't want to have to fillout the form or I didn't want to
have to do the documentation toget to take it to the next
level of management.
So how do you address that?
You know, for your organization, greg and or Julie, like what
(39:10):
have you seen?
Like how do organizations liketear down that wall and simplify
that process?
You seen, how do organizationstear down that wall and simplify
that process.
So adjusters are willing tobring up the reserve.
And my president of theorganization which I loved it
when he said this he said, hey,bad news doesn't age well and to
me an adverse reservedevelopment is bad news.
So I want to be on top of those.
And how do we encourage theindustry as a whole to be more
(39:35):
forthcoming and be forthcomingnot more forthcoming but be
forthcoming on reserving,because I don't know that it's a
huge problem.
I definitely see it, but maybesome best practices around that.
So a little bit of a loadedquestion, I apologize.
Speaker 1 (39:48):
No great questions and I think these are real
challenges.
Obviously, I think part of itis talking about it all the time
and I think you kind of hit onthat.
Like in our department meetingswe talk about all the time, you
know, let's get those reservesup, let's make sure we got them
to where they need to be, let'smake sure they're
well-documented.
So if you're not here tomorrowcause you won the lottery, we'll
(40:10):
go with a positive, a positiveoutcome that, uh, you know the
next person can pick that up andyou're not putting pain on them
.
And I think there's no silverbullet to this, but I think
training, auditing, reviewingfiles and being involved all
those things matter.
One thing we do that I think ishelpful is we do catastrophic
claim roundtables every twoweeks.
(40:31):
We talk about these claims froma reserving perspective, from
an injury perspective, and weinvite everybody in on those
because we feel like everybodycan learn together and somebody
might have an idea that somebodyelse hasn't thought of.
So those are some of the thingsI think you know.
I know in a past life Juliemanaged an examining team and
(40:52):
had to probably look at some ofthese things from that
perspective.
Julie, what are your thoughts?
Speaker 3 (40:57):
I think probably one of the key things that might
prevent adjusters from diving inand really looking at reserving
as the medical andunderstanding medical.
It's intimidating and if youdon't have a medical background
which I would probably say 80%of our industry does not that
are actually claims adjusters.
Now you're having to think likea doctor and you have to
(41:18):
understand medical terminologyand now figure out how does that
impact a claim.
And many years ago there usedto be a requirement that you
took medical terminology so youunderstood what medical terms
mean.
Now you're kind of on your own.
You've got to, like I said,google it, you know and look at
and try to understand it andlearn and as you get more
(41:39):
experience you feel morecomfortable with those things.
I think the other thing isintimidating is just the value.
I don't know how many timesI've seen people not reserve
something because it's more thantheir authority or it's not
necessarily because they want toavoid reserving over the
authority.
It's intimidating to come andsay I want to put on a million
(42:01):
dollars in a reserve.
That's kind of whoa and to me,years of experience, a million
is nothing.
It's like oh, seven, five,eight, doesn't matter, it is
what it is and I think thatconcept of how you reserve a
file for $20,000 and the processthat you use at reserving that
claim for $20,000 is absolutelyno different than how you
(42:22):
reserve a file for $10 million.
Now, understanding all thedifferent components is
obviously based on experienceand your level of understanding,
but the philosophy and theprocess and the resources and
tools is identical, no matterwhat stage of that claim you're
in financially.
And I think if you can removethat fear factor and that you
know you said draw the curtainsback and adjusters understand
(42:45):
that, I think they'll be alittle less fearful and more
fearless in going in andtackling a reserve.
Secondarily, I mean it's alsoit takes time.
I mean it takes time to sitdown and actually reserve a file
and it doesn't matter whatlevel it is.
And I think, as organizationslook at their financial health
and how well we're doing inreserving is get to the key.
You know the key drivers as towhy we might not reserving.
(43:07):
Is it an educational level?
Is it?
You know we're understaffed.
You know, are we allowing ouradjusters enough time to
thoroughly evaluate?
And it goes back to the oldadage penny wise, pound foolish.
If you just add one adjuster,that one adjuster salary and all
the benefits associated aretaken care of by one mistake in
reserving.
So if you can avoid it, itmakes more sense to hire an
(43:29):
adjuster than it is to losehundreds of thousands of dollars
in a claim that wasn't reservedproperly.
So you've got to thinkholistically about reserving and
really understand what'sdriving our inability to get
reserves done correctly, whetherit's as a whole or individuals,
and then from there startbuilding that person's
capabilities by looking at thedifferent resources available to
(43:51):
help them achieve those kindsof goals that they need to
achieve to be successful in therole I thought that was
fantastic, julie, you've said itbetter than me.
Speaker 1 (44:04):
I thought you explained that very well.
Well, first of all, I just wantto say I appreciate all of the
information you shared today.
I felt like we tackled a prettytough topic that could be
pretty company specific and didit in a way that I almost feel
like, no matter where you work,you could gain something from
this that could help you be alittle bit better at what you do
.
One of the things, julie, we'redoing this season is I'm trying
to put some good vibes out inthe universe.
(44:26):
I felt like there's plenty ofnegativity, and so I decided to
end each episode talking towhoever our guest was and asking
them this question what is thefavorite part of what you do
each day?
So, of all the things that youdo, what gets you going in the
morning or what gets you excitedabout what you do?
Speaker 3 (44:47):
Well, obviously I enjoy the claim process and, if
you can't tell, I'm passionateabout reserving.
I love the claim process andthe challenges that are faced
with each claim.
I learn something new all thetime, which definitely keeps
things interesting.
And since we've been focused onreserving, I'll add that
reserving, while it's difficultat times, is a challenge I
really like to tackle and it'sreally satisfying to see a file
(45:09):
that's been managed well and thereserves were accurate
throughout the life of the claim, were accurate throughout the
life of the claim Aside from myteam and the people I work with,
which is it always makes thejob that much more doable and
fun.
But really, one of the thingsthat just really gets me going
is the satisfaction I get fromseeing an injured worker recover
enough to return to work orfind that resolution to their
(45:30):
claim that works well for them,and I know that I've been a part
of that journey.
There's something innatelysatisfactory about that and you
know, kind of in that empathyfactor.
You know that I haven't gonethrough it, but I have empathy
for what they're going throughand regardless of it's a
litigated claim or not, itdoesn't matter.
You know, I try to think ofthese people.
It's like how would I want tobe treated, and I try to live by
(45:53):
that every day.
And then when I see that we'vehad some kind of satisfaction,
satisfactory conclusion to aclaim where they're made as
whole as they possibly can bemade, it's really quite a perk
of the job.
Speaker 1 (46:08):
And it's fantastic.
I feel like that's what we'rein the business of.
Sometimes we forget we're inthe business of helping people
get back to work and get back tolife, and those are the best
moments, when you know thatyou've made, you've done the
right thing and everybodybenefited from the right thing
that was done.
Speaker 3 (46:24):
Yeah, and I and I feel supported by the company.
So it's nice, you know, it'snice to have that support that
you're, you're being supportedto do the right thing thing
regardless of the cost, and tohave that is it says a lot about
where I work and thesatisfaction I get out of my job
every day.
Speaker 2 (46:42):
That's awesome and it's a mind shift right, because
I mean I know your organizationis big on the Home for the
Holidays team and I think ifthat's promoted through the
whole organization it promotesthe mentality with the different
departments and underwritingand sales and claims.
You know it's like we're allhere to do a different piece but
(47:02):
it's all for that injuredemployee and how do we get them
back to a gain pool situation?
Make the wrong right kind ofmentality, appreciate it.
Thanks for the time, greg and.
Speaker 1 (47:14):
Julie.
Oh no, it's been fantastic, andI want to thank Matt and Julie
also.
In the background, noteverybody gets to hear, but
we've got Natalie Dangles whodoes our blog each week, so I
encourage people to.
If you didn't have time tolisten and you want to read, you
can do that, or if you justwant to go back and use it as a
reference of what went on in theepisode.
She does those every other week.
(47:36):
And then a special thanks toJacob Holmes, who's also hiding
in the background.
I always say he's my.
I've got teenagers and theyhave filters on their phone.
He's our filter.
He makes us look amazing.
So we all come out ofeverything looking like rock
stars.
So thank you, jacob, for that,and I just remind our audience
to do right, think differentlyand don't forget to care.
And that's it for this episode.
(47:57):
Thanks everybody.
We'll catch you next time.
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com