1. We are a specialized industry and need to operate/handle claims differently

2. We have clients that require us to manage the claims with their approval

3. The MGA or risk pool manages the claims program because it knows best what our clients want

4. We are too small to run our claims program like the larger companies/insurers

5. We operate in X state(s), which is a very difficult environment

6. We are a public entity, and we don't need to follow the same standards as insurers and corporations

7. Our procurement process requires us to select the cheapest TPA/vendor

8. We cannot afford the claims system that we need to manage our claims effectively and efficiently

9. We cannot find the right people in our location to manage the claims effectively

While there may be a very small grain of truth in some of these reasons/excuses, in most cases they are a sign that:

1. The person or group running the program is inexperienced in claims management, whether it is a Risk Manager or someone else who has been identified by the company to oversee the claims program

2. The leader has acquiesced to others and has stopped trying to improve the program because of inappropriate pressure exerted by others or due to frustration arising out of past attempts to improve the program that have been blocked without appropriate consideration of the claims costs

3. The organization operates in a vacuum. It has handled its claims the same way for many years, and has not sought an outside view or asked for comparisons to other organizations that might bring new ideas to the program

These attitudes and behaviors can result in mediocre claims programs that will result in claims costs and loss adjustment expenses that exceed what they should be. Let's examine each of the nine reasons that are given above, and discuss why they are invalid.

Reach for Higher Levels Of Claims Management

Claims organizations from all areas must work hard to develop and maintain claims excellence, and claims excellence should be the goal so that claims costs and expenses can be reduced to the greatest extent possible. This is possible for all entities that:

• Strive to be the best, and face their challenges without excuses

• Examine their claims program periodically, and compare it with others that are viewed in the industry as the experts

• Identify necessary products and services that are needed to enhance the program, and set a plan and a budget over a period of months or years to obtain them

• Ensure that your program is as independent as possible from inappropriate influences by others, such as corporate senior management, large clients, or others that may ask you to deviate from what you know to be the proper path

• Talk with others in your industry and share problems and solutions to similar claims issues

• Maintain a disciplined approach to claims management.