Captives: Claims Handling

For both property & casualty (P&C) and Employee Benefits (EB) captives, the strong focus on claim management is one of the most important membership benefits.

Current clients sometimes say it’s how their claims are handled that tests the insurance coverage decisions they made. We agree. Having the right program is indeed the basis of successfully navigating an issue, and it’s important to address any concerns from “day one – minute one”.

For the AssuredPartners P&C and EB Captives Vertical Service Teams, this entails looking at loss control and claims as a cycle of continuous improvement and being dedicated to providing services that include education, advocacy, availability, risk management service planning, and proactive claim management.

 

Each Employee Matters

First, it’s important to forecast what could go wrong in order to prevent it, and secondly you have to be ready to act when prevention doesn’t work. These are not mutually exclusive concepts. In our experience, they work best when working together. It takes simultaneously building a plan to avoid loss and making sure there are open communication channels for immediate response and control.

 

Building a Customized Plan

All loss control programs are unique to the needs of a business or industry, but all should begin with a focus on loss prevention and concentrating resources where they pack the most punch. The next steps are working to minimize the impact of events that cannot be prevented then come full circle to assure that what is learned from the past is used in building for the future.

A typical program for property and casualty will include components of direct loss prevention, training, and education such as, safety committee development, incident investigation and root cause analysis, industrial hygiene, and supervisory and employee accountability instruction as well as other specific industry requirements. Whereas a program for employee benefits will concentrate on including materials that help plan participants become better consumers of healthcare through educational offerings and information on topics such as nutrition, mental health, exercise, and stress reduction – all geared towards promoting healthier lifestyle choices.

 

Learning From Results

When all the loss data is collected, meaningful analysis can be conducted to get a clear picture of where changes can or should be made for continuous improvement. Working together with a focus on concerns before they become events; events before they become claims; and claims before they become suits means realizing constant quality progression.

For workers’ compensation claims, it takes working closely with medical providers, nurse case managers, employers, and injured workers to come up with solutions for getting workers back to work safely and timely while making sure to maximize savings in all areas of medical expenses. These metrics provide invaluable data to help control claim costs.

 

Captives and Claim Management: Bottom Line Impact

Both P&C and EB captives provide the opportunity for greater control over claim management. Services provided within the captive structure include claim negotiation, advocacy, assistance, and review meetings. However, there are claim services unique to each because of what they protect.

P&C captives cover an organization’s tangible (for example vehicles and cargo) and intangible (for example trademarks and expertise) assets with the safety of employees top of mind. Lessons learned from an incident are used to continuously refine best practices in an ongoing effort to mitigate potential future losses – thereby helping to create a more efficient and sound operational process.

An EB captive promotes flexibility and transparency that allows an organization’s benefit offerings to be tailored to best suit participant needs. Flexibility in plan design means an employer can customize their benefit offerings to meet the specific needs of their employees. This not only provides alignment with corporate culture, but it also helps to flatten the benefit spend trajectory. Transparency of plan data gives a clearer picture of participant population health so an employer can focus resources on offering quality providers and still maintain better control of costs.

The result is that for both P&C and EB captives, large claims are absorbed by the financial management structure, and a year of moderate claims means a possible return on underwriting investment.

 

Setting the Bar Higher

A captive’s successful risk management has the following key components:

• Use of the risk management team concept – forecast and be ready to act
• Tailored plan of action – focus on prevention – plan for mitigation
• Data analysis – study history – build future improvement

 

A successful risk management strategy does not allow for complacency; never get comfortable. Continuously striving to minimize exposure to loss by documenting, educating, reporting earlier, identifying potential hazards, and preserving evidence means the possibility of achieving an even higher level of achievement.

Our team is committed to assisting you in making the best choices for your company. If you would like more information regarding claims management and how it relates to the risk management financial structure of a P&C or EB captive, contact us to talk to a team member about all your options. There is Power Through Partnership.