They are "selling" their supervisors on their ability to investigate
objectively and evaluate appropriately in order to obtain authority as
necessary. They are "selling" to the claimants and insureds to convince them
that the settlement offer or resolution amount is correct. They are
"selling" their theory of liability to plaintiff attorneys to negotiate
reasonable settlements. Yes, every day, claims adjusters are "selling"
something to someone.
Effective Negotiation
As every good salesperson knows, closing the deal requires excellent
negotiation skills. And so it is with the best claims professionals—they
know how to negotiate effectively to resolve and close their cases. Simply
stated, negotiating is the ability to influence events or people to a
desired outcome. Becoming a skilled negotiator will give claims adjusters
the power to influence and control the outcome of their cases. They will be
more effective in resolving disputes.
Skilled adjusters understand the importance of strategic negotiations and
begin the process from the first day that a claim is assigned to them. They
understand that their primary responsibility in the claims handling process
is to close the case. They begin thinking about case closure and laying out
a strategy, from the initial contact. They have developed an excellent
understanding of human nature and have a desire to conduct themselves
throughout the process in a professional manner. They believe in the spirit
of fair dealing.
The Negotiating Process
Examining the negotiating process from a sales perspective, we can break
it down into four parts: (1) approach, (2) probe, (3) presentation, and (4)
closure.
Approach
Negotiations and case resolution begin at the first contact. Creating
trust is one of the desired outcomes of the first contact with the claimant.
This is not easy to do, especially in light of the public's inherent
mistrust of the claims process, in general, and claims adjusters in
particular.
Claims representatives know that to create trust, they must always keep
their promises. They must believe in, and practice, old fashioned virtues
such as truthfulness, fairness, and common courtesies. During the
discussions and ongoing contacts, they continue to clarify and manage
expectations.
Successful claims professionals always return phone calls in a timely
manner and are always responsive to questions. If they don't know the
answer, they so advise the claimant with a promise to find the answer. They
learn to say things like, "I don't know, but I will find out and get back to
you" or "I don't understand, can you help me…."
While they acknowledge that people do not trust insurance companies, they
are confident in their knowledge that people trust people. They work hard to
show, and demand, respect.
It is a natural tendency of human nature to strive to be understood.
Successful claims adjusters understand that this forces them to persuasion,
not understanding. Working hard to understand the perspective of the
claimant is a key strategic move for the successful negotiator.
Probe
Uncovering the needs of the claimant is every bit as important as
uncovering all of the facts surrounding the occurrence. Claim
representatives receive extensive training in developing investigative
techniques in order to uncover all of the facts that will allow them to make
an objective evaluation of coverage, liability, and damages. During that
process, it is important for them to probe and to ask questions—not just
about the accident facts, but about the things that may impact the
perspective and actions of the claimant.
Understanding that the claimant is experiencing emotions—fear, anger, and
resentment—will assist the adjuster in communicating more effectively.
Knowing that the claimant may be receiving free advice or may even have an
instinct to strike back, helps the claim representative control their own
emotions and rise above their own defensive mechanisms when the adjuster or
the profession are attacked.
Demonstrating a dedication to the purpose of closing a case, a successful
negotiator will acknowledge the claimant's perspective and respond
objectively and convincingly to the fears that are articulated.
Probing is more than just asking questions. It includes
active listening. Active listening
involves hearing those things that are not said, to get to the core of the
issue. For instance, after being involved in an automobile accident, a
claimant may say to the adjuster, "My goodness, that is the best car I have
ever owned." This simple statement gives the claims representative an
insight into the claimant. It may also indicate this claimant has an ego
that needs to be assuaged, or this may be a claimant who will need to brag
to his friends and colleagues about having the upper hand in the claims
process. Active listening actually enhances communication and will provide
helpful insights to the claims representative.
Presentation
In this phase of the process, the claims representative will be providing
an indication of the settlement value of the claim. It is important for the
adjuster to inform the other party that the goal is to reach agreement. It
should be clear to the claimant that the adjuster will not cave in, and that
the adjuster will be strong. Focusing on facts and truth will force the
parties to communicate objectively. It will also demonstrate that the
adjuster is confident in his or her position.
If the claims representative has completed a solid investigation into the
facts surrounding the incident, there will be no surprises to either party
when comparative negligence issues are discussed, when damages are
discussed, or when coverage issues are discussed. The other party should
have gotten some indication as to the ultimate settlement value based on the
questions the claims practitioner asked during the investigation process.
Effective presentation of any position requires knowledge of the facts.
Whether investigating liability, coverage, or damages, communication with
the other party should be based on facts. Excellent claims practitioners
investigate the facts impartially and negotiate with partiality. Without a
clear and objective understanding of the circumstances surrounding the
claim, it is impossible to negotiate from a position of strength.
Negotiation Ground Rules
To make the process as described above effective, there are certain
ground rules to remember.
- Strictly adhere to ethical conduct.
Create trust, negotiate with integrity, be truthful and fair. Doing so
will significantly influence the relationship that the adjuster is able
to develop with the injured party, and will influence the outcome of the
negotiating process.
- Investigate impartially. Negotiate
with partiality.
- Be courteous and friendly.
Courtesy to the injured party relays respect for them as a person and an
understanding of their position. "Friendliness" does not imply that the
adjuster will become the "buddy" of the injured party, but will be open
and honest in the discussions.
- Follow specific instructions carefully.
Most adjusters have a certain level of authority that they are able to
utilize in the negotiation process. The full extent of that authority
should be used, if necessary, in order to move the case toward
resolution.
- Take command of conversations.
This ground rule seems to overrule everything that has been said about
listening; however, taking command of conversations means to focus the
discussion in a positive way. The claimants are often emotional and
certainly may be violated by the events surrounding the accident itself;
being objective, calm, and focusing the conversation will move the
discussion beyond emotions into the area that claim representative needs
to conversation to go.
- Be prompt. If promises are made to
return phone calls, to obtain information, to perform certain
activities, these promises need to be kept. If a claims representative
has promised certain information to the claimant and is unable to
deliver on that promise, an interim phone call or email advising that
the information is not yet available must be sent. This attention to
promises will tell the claimant that the adjuster is still actively
involved in the handling of loss, that the adjuster recognizes his or
her obligation to keep promises, and that the case is still moving
forward.
- Deserve and expect respect. Not
only should the claim representative be ethical and honest and work with
integrity, but those should be expected of the injured party as well.
Respect is one of the attributes most often mentioned when people
describe an ethical person. By relating to the injured person in an
ethical manner, the claims adjuster will deserve their respect.
- Keep an open mind, and be alert to
changes. Being objective is not easy to do. We come at each
situation with our own memories and opinions as to the outcome based on
prior knowledge or similar situations in which we have been involved
previously. On the plus side, these memories help us to weight the
activities and the events we encounter; on the negative side, they may
cloud our judgment or make us somewhat less objective. To be alert to
changes in the claimant's position or response requires objectivity and
an open mind.
Following these ground rules will assist the claim representative in
maintaining control of the claim and the negotiating process.
Conclusion
The art of strategic negotiating is a learned skill. Adjusters can
practice skill building on their family or friends or even by going to
garage sales and strategically approaching the negotiation process. Becoming
a skilled negotiator will give the adjuster the power to influence and
outcome of the cases they handle.