LinkedIn Discussion of the Week: Insurance Carriers Leaning Towards Using Software to Determine Liability Rather Than Teach Adjusters How To Determine Liability

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This week’s LinkedIn discussion that sparked our interest was in the P & C Claims Professionals Discussion Group. It is a community designed to connect people who share expertise in Property and Casualty Insurance claims handling in order to deepen their skills, perform their jobs at a higher level and advance in their careers. This includes all levels of Claims roles from front line adjusters, managers and executives. It also includes enabling roles like Claims Technology, Audit, and Claims data & metrics. The group was started by Steve Ellis –  The discussion of the week post was started  Insurance Professional Christopher Pratt.

Question regarding insurance carrier leaning towards using software to determine liability rather than teach adjusters how to determine liability

I spent 14 years as a Senior auto/GL adjuster. I was trained on how to determine liability based on the facts I obtained through my investigation, obtaining statements, etc. I have moved onto the agency side of the industry as a claims analyst now. I am seeing though, that a lot of carriers are using software to determine liability and provide settlement figures for adjusters.
Is this a good thing or a bad thing? Arguments can be made either way. My concern is how much training does an adjuster receive on how to make liability determinations now compared to adjuster who have been trained prior? Does this help settle claims more efficiently?
A few commenters replied:

Christopher Reid

From my experience, the “computer assisted” liability and settlement evaluation software really only does what a well trained adjuster should already be doing, just faster and with somewhat greater accuracy. Faster, because it is a computer. With somewhat greater accuracy because the computer has, presumably, a wider set of results (more data) to compare, it doesn’t make mathematical errors (we hope), and it doesn’t forget to include all of the parameters the employer wants considered (humans do forget things). That said, no computer can ever exercise the good judgment that a properly trained adjuster can when a “technical” evaluation won’t settle a claim. And it is the lack of “judgment” by a computer that can well lead to bad faith claims when the insurer starts to ignore human judgment.

Dennis Franchetti

Call me old school, but in my view we do no service to our insureds or to our companies by simply inputting data into a program and regurgitating the findings to an adverse party. At some point, an adjuster needs to be intimately familiar with the facts and with the applicable laws. In order for an adjuster to argue liability with an attorney, he/she must understand the issues and the specific elements of the case at hand. Such understanding can never be obtained through data entry.  As the adjuster’s career takes him/her into more complex claims, a true understanding of liability basics will guide his/her understanding of the issues at hand.  Lastly, it is much easier to defend oneself in any potential 3rd party bad faith claim/suit by independently investigating each claim with regards to liability as well as damages.

Marty Smith, CPCU,CLU®ChFC®

I think it is a tool and can be very helpful in handling the less complex claims thereby increasing efficiency, reducing operating cost and providing a great service to both insureds and claimants. However, I think the more complex claims will still require a human to review before a final decision is made but even then, it will increase efficiency and reduce the workload of the adjuster.  Take this software and couple it with proper data analytics and you can easily identify fraud and other claims that require additional attention. The challenge for us is to not be afraid of new technology but objectively review it and explore ways for its’ proper use. It’s about in the increasing world of technology, what can I and the people I lead do to add value to the process and our companies.
JDi Data agrees that computer program  won’t be able to solely work on it’s and  measure what needs to be done without the adjuster having trained knowledge of the proper items to input into the program.
Join the discussion over on LinkedIn and share with us your comments and favorite discussion for the week!