How can technology help wrangle complex claims?
Here are some strategies that attorneys, executives and risk managers will share at the 2024 Complex Claims Forum.
Claims become complex when they involve multiple factors, including coverage issues, more than one defendant, more than one plaintiff, damages that exceed available limits, contractual indemnification issues, and jurisdictional issues.
Complex claims are unavoidable, but there are ways for the industry to navigate them more effectively.
Four insurance-industry thought leaders will discuss the shifting landscape of complex claims and offer their predictions for the year ahead during a panel at the 2024 Complex Claims & Litigation Forum at the Green Valley Ranch Resort in Las Vegas.
Panelists will bring points of view from the claims side, the underwriting side, and the legal side of the business. They include:
- Jonathan Schwartz, an attorney with Freeman Mathis & Gary LLP, who specializes in insurance coverage litigation and counseling arising from matters involving commercial and residential property, primary and excess commercial general liability, cyber, D&O, E&O, and commercial auto and trucking liability insurance policies.
- David Corry, head of casualty at Argo Group, who is responsible for leading primary casualty, excess casualty, construction, environmental and Rockwood. He has experience in all lines of casualty insurance, having served as senior director at Markel Specialty and VP at Liberty Mutual. He also held senior positions at Chubb and Crum & Forster and is a veteran of the armed forces.
- Nationwide ESS Casualty Claim Leader Geoff Borger, who has more than 25 years of experience in the commercial excess and surplus property, casualty and workers compensation space. He leads a department of more than 50 claim professionals and nine managers who handle complex and severity-driven casualty claims.
- Barbara Gliszczynsk, most recently a risk manager for the City of Henderson, Nevada. She has more than two decades of experience in the gaming and hospitality industry and managed the city’s insurance program, including litigated and high-exposure claims. She recently joined Westgate Resorts as vice president of Risk Management.
Inside a complex claim
Complex claims and severe claims are not always synonymous, Borger said.
“You can certainly have complexity without severity and vice versa,” he said. “That said, a lot of the time the two go hand in hand. The more complex the claim, the more challenges there are to iron out before a resolution can be reached.”
A named storm is a primary example of a complex claim because it affects multiple homes and businesses as well as multiple insurers including homeowners and business insurance carriers. There also is an entire chain of commerce impacted, not to mention loss of life and loss of property, said Corry. The industry is also seeing severe rainstorms creating complex claims and domestic terror incidents such as the 2017 music festival shooting in Las Vegas, which involved loss of life, injuries, property damage, municipalities, security companies and the venue itself.
Even single claims can be complex, Schwartz said. For example, a single auto accident involving multiple people with injuries may be a complex claim. How to divvy up money is always complicated when there is not enough insurance payout to satisfy the demands or judgments associated with a particular incident, he said. Essentially, anything that requires more attention from the insurer’s outside counsel or in-house professionals may be considered complex, said Schwartz.
Claims trends on the horizon
“As the globe spins, I can tell you that there’s always going to be new issues confronting the insurance industry because insurance is how business is able to function,” said Schwartz. One emerging area for complex claims is biometric privacy concerns, he said.
“We see a lot of claims for alleged violations of certain privacy statutes, not just biometrics, but other consumer privacy statutes,” said Schwartz. Such claims involve financial exposure, legal nuances and implicate many areas of the insurance industry.
“Policy limit demands are certainly something that we’re seeing much more of since the pandemic and social inflation is something the insurance industry has been talking about for years, but I don’t think we have our hands around that issue yet,” said Schwartz.
Corry said insurers are always working to identify emerging issues by learning lessons from claims.
“You can’t prevent a hurricane, but as the carrier, you can aggregate your property values and limit your potential loss with modeling systems,” said Corry.
Typically, complexity comes from external factors, so carriers are limited in what they can do to avoid complex claims, said Borger. Conducting thorough investigations, providing a quality defense and innovative approaches to resolutions are all strategies insurers can take to address complex claims.
“Nationwide is developing an AI tool that will help us identify claims with severity elements faster,” said Borger. “This ensures the claim is assigned to the appropriate level claim professional and allows us to employ the appropriate mitigation strategies sooner.”
Navigating complex claims
The panelists emphasized the need for quick response and resolution as well as effective communication.
“Most claims that last for a long time do not get better with age,” said Schwartz. “With that in mind, we have a plan at the very outset for how we can try to resolve claims, from getting people involved from the insurance industry to look at the complex claim, putting all our heads together and collaborating to come up with the best and most effective solution possible.” Insurance professionals are accustomed to responding to the unknown, said Corry. For example, when a named storm hits, insurers are already prepared with go teams that have mapped out how to reach impacted areas and what they need to do once the wind stops blowing.
According to Borger, Nationwide is working closely with its defense counsel partners and encouraging open collaboration and sharing of ideas with each other.
“We are exploring greater early resolution tactics as well as striving for more out-of-the-box thinking such as pre-suit mediations and defense-oriented anchoring,” said Borger. “Nationwide also has processes in place that get potentially complex and/or severe files to the review process quicker, which allows us to devise a resolution strategy earlier in the life of the claim. “The sharing of ideas, exchanging of information and learning from each other is an area of opportunity for the industry and the defense bar,” said Borger. “The plaintiff’s bar is well organized and leaps and bounds ahead of carriers when it comes to collaboration and congruence — insurers need to take note and be more unified in their approach.”
ALM’s Complex Claims & Litigation Forum, happening in Las Vegas Feb. 26-28, 2024, is designed to help insurers and litigators Prevent, Prepare and Prevail in complex claims cases and emerging risks. This event will spotlight a winning mix of thought-leadership presentations, actionable case-studies, and closed-door peer-sharing. Follow this link to find out more and register.
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