IRMI Update—Issue #47
An E-mail Newsletter for Risk and Insurance Professionals
ISSN: 1530-7948
August 20, 2002
In This Issue
Colleague,
Each year at this time our Research Analysts interview their industry contacts
and prepare a line-by-line insurance market analysis for the September issue
of The Risk Report. Our goal is to provide
subscribers with some insight on what to expect on their insurance program renewals
during the next 6-12 months. It should be no surprise we will report that continuing
price increases (substantial ones in some lines such as commercial property
and umbrella liability), increases in deductibles, coverage restrictions, and
reductions of limits are the norm in the current market. Underwriting discipline
has definitely made a comeback and new factors, such as aggregation of risks,
are being carefully considered.
The obvious question that now arises is: "How long will the hard market last?"
Previous hard markets have tended to be about 36 months. This market began
to firm around the second quarter of 2000, which would put us about 28 months
into the cycle. Therefore, if history repeats itself, the current hard market
will end during the second quarter of 2003. Frankly, I think this would be an
optimistic prediction this time around. Many different dynamics are now in play,
and I don't think the industry will have recovered sufficiently by next April
to launch into a cycle of increasing competition.
So what do you think? Will we begin to see competition return to the insurance
industry in the first half of 2003? Or will the market level off, meaning we
can look forward to a period of relative stability (i.e., little or no price
movement, coverage changes, etc.)? On the other hand, are you more pessimistic
and think that the insurance market is far from bottoming out, predicting we'll
see a hard market continue until 2004? Please send us your opinion as to when
the current hard market will end—and why. This should make for some interesting
reading in the next issue. [See reader comments.]
Thank you for subscribing to IRMI Update. Have a great day.
Jack
Jack P. Gibson
President
IRMI
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Five Secret Signs of an Overloaded WC Adjuster. A Workers Compensation (WC) claims adjuster's job is difficult at best. The
following signs of an overloaded adjuster are not meant to pick on adjusters,
but to give insureds guidelines for ensuring they have the right insurer/third-party
administrator for their WC claims.
- Timeliness in Investigating First Reports
of Injury—All investigations should be finished within 48 hours of
receipt of the First Report of Injury. This includes contacting the injured
employee and obtaining a statement if necessary, contacting the employer,
and contacting the treating physician.
- Responsiveness in Returning Phone Calls,
Mail, and E-mail—Phone calls and e-mail should be returned within
24 hours of receipt. Mail should be returned within 1 week, including mailing
time.
- Rehabilitation Involvement—If
all of the claims have a Rehabilitation Nurse reviewing them, then the adjuster
is using rehab as an adjuster at a premium cost to the insured.
- Injured Employee/Insured Contact—The
insured and the claimant should be contacted periodically. If the claimant
and insured have not heard or rarely hear from the adjuster since the initial
investigation, cost control of the claim will be heavily sacrificed.
- Attorney Involvement—This pertains
to claimant or defense attorney involvement. If a high percentage of the
injured employees hire an attorney, it may be due to lack of communication
by the adjuster or untimely responses. The use of defense attorneys by the
adjuster has the same indications as #3 above. The adjuster may be using
the defense attorney to adjust the file, once again at a premium cost to
the insured.
The bottom line is that an adjuster's primary job is to communicate with
all parties involved in a claim. If there is a communication breakdown anywhere
in the process, the insured pays dearly!
By: James J. Moore, AIC, MBA, ChFc
President
J&L Insurance Consultants, Inc./The Money Planner, Inc.
Raleigh, NC
E-mail:
www.cutcompcosts.com
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Below you'll find summaries of some recent additions with links to the articles.
Last Chance for Horizon
Award Nominations!—The newly renamed Gary E. Bird Horizon Award recognizes
innovative risk management techniques and processes. Begun in 1998 as the Construction
Risk Management Best Practices Award, this honor is bestowed annually on a risk
management professional with an exceptional construction risk management or
insurance program falling in one of the following categories: risk control,
risk financing, risk transfer, or risk analysis programs. The winner will receive
round-trip airfare, hotel accommodations, and a complimentary registration to
the 23rd IRMI Construction Risk Conference as well as the award. The winner
will be announced at the 22nd IRMI Construction Risk Conference in San Diego
November 11-14, 2002. Don't you know someone who should be honored? Deadline is September 1. Learn more about
the Gary
E. Bird Horizon Award.
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