Evolving From Discontinuous CAT
Claim Management to Continuous
Improvement
Texas Windstorm Insurance Association (TWIA)
Our Mission
Providing essential property insurance products and
services for eligible Texas policyholders when no one
else will.
Our Vision
To be respected and trusted by our stakeholders
Our Values
Service & Respect: Provide quality service to our
policyholders and respect the interests of a broad
spectrum of stakeholders
Stability & Efficiency: Be good stewards of the public
trust by ensuring financial stability and operating
efficiently
Accountability & Integrity: Be accountable for
performance and operate with integrity by holding
ourselves to a high standard of ethics
Image by TWIA © 2016
TWIA Before & After Hurricane Ike
• Before Hurricane Ike (2008):
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$59 Billion in exposure over 216,000 Policies in Force
5 full-time claims employees
Service level mentality as insurer of last resort
Phone, Claims, and Policy systems not scalable
No actionable Catastrophic (CAT) incident response
plan
Missing claim processing guidelines for desk & field
adjusters; one adjusting method for all claim types
Multiple repair estimating software platforms in use
Missing quality assurance processes
No Fraud mitigation guidelines or Special Investigation
Unit (SIU)
TWIA Before & After Hurricane Ike
• After Hurricane Ike:
– 93,000 claims
– Phone & Claim system failures
– Almost 2,000 TX Dept. of Insurance complaints
– 10,000 Lawsuits
– $2.6 billion in payouts
As a Result…
TWIA put under TDI Administrative Oversight (2011):
“The Commissioner of Insurance has determined that
the Texas Windstorm Insurance Association (TWIA) is in
a condition that makes its continuation in business
hazardous to the public or to its policyholders as it
appears that its management does not have the
experience, competence, or trustworthiness to operate
TWIA in a safe and sound manner, and that TWIA should
be placed under administrative oversight”.
Recapping TWIA Before & After Ike
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Little empathy
Myopic/reactive
Unprepared
Not skeptical
Unprofessional/unethical
Incompetent
TWIA Present Day
• 50 full-Time claims employees
• CAT plan & scalability
‐ Adopted Industry Best Practices
‐ Legal Reporting Requirements
‐ Contracted Claims Resources (>6,000 Field Adjusters and
>750 Desk Adjusters)
• Improved claims handling response (2015)
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20,000 Claims (2nd Most in TWIA History)
FNOL to Payment Averages <15 days
Customer Surveys 93% Positive
<1.0% Disputed & <0.25% Litigated Claim Rates
TDI Complaint Ratio <.01%
So What is Discontinuous?
• Dis·con·tin·u·ous
• Adjective: discontinuous
– having intervals or gaps.
• Synonyms: intermittent, sporadic, broken,
fitful, interrupted, on and off, disrupted,
erratic, disconnected
So What is Continuous?
• Con·tin·u·ous
• Adjective: continuous
– forming an unbroken whole; without interruption.
• Synonyms: uninterrupted, unbroken, constant,
ceaseless, incessant, steady, sustained,
ongoing, without a break, persistent,
relentless, everlasting
Continuously Improving Your CAT Response
Capabilities
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Importance of benchmarking
Implement a formal plan
Encourage a healthy and smart plan
Know your stakeholders
Hire the best people
Focus on desired outcomes
Segment & specialize to your strengths
Understand the power of big data
Constantly monitor performance
Build vendor partnerships
Importance of Benchmarking
• Develop a “never stop learning” culture
– Establish annual goals for required training & number of
training hours per employee
• Constantly benchmark others
– What did others do right or wrong for large events inside
and outside your areas of business?
• Avoid “that’s the way we’ve always done it.”
• Learn from past experience and mistakes (yours and
others)
• Leverage what makes sense for you
• Embrace the value in “bad” ideas and the benefits of
“and” and not just “or”
Implement a Formal Catastrophic (CAT)
Incident Response Plan
• If you don’t have one borrow or copy one
– Find one on the Internet…ours is out there and so are others
• Hire experts and consultants to assist in developing and/or
auditing the plan
• Read it, question it, and update it on a regular basis
• Ours is an enterprise plan, has 4 phases, i.e. mitigation,
preparedness, response, and recovery
– Phases contain multiple objectives outlining roles & responsibilities
• Assume it is a “living document” and will never be perfect or
complete
• Study FEMA Emergency Management Institute best practices
• Plan for and conduct regular Testing, Training, and Exercises
• Have a Corrective Action Program (CAP) with:
– After Action Reports (AAR’s)
– Formal improvement plans
Encourage a Healthy & Smart Plan
• Don’t just have a smart plan
• Expect the unexpected and maintain perspective
• Practice “better beats perfect”
• Encourage bottom-up communication
Know Your Stakeholders
• Stakeholder management is a strategy
• Perceptions and reality
Know Your Stakeholders
Key Principles1
• Communicate
• Consult, early and often
• Remember, they’re only
human
• Plan it!
• Relationships are key
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Simple but not easy
Just part of managing risk
Compromise
Understand what success is
Take responsibility
RICS/APM Stakeholder Engagement 1st Edition (2014). https://www.apm.org.uk/stakeholder-engagement/key-principles
Hire The Best People
• Hire smart ethical people with industry experience
• Encourage employees to become lifelong learners &
benchmarkers
• Professional designations matter
• Consider behavioral assessments
• Can’t hire for It, train for It
Summing it up so far…
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Benchmark – know how good you are, or not
Never be satisfied with your plan
Encourage smart behaviors
Understand your stakeholders
Hire the best people
Focus on Desired Outcomes
• Start with the end in mind…focus on desired
outcomes and results:
– Desired behaviors
• Empathy, convenience, speed, and accuracy
• Avoid excuses…they only lead to delays
– Desired outcomes:
• Low numbers for disputed
claims & complaints
• No bad faith litigation
• Highly engaged employees
• Highly satisfied policyholders
and agents
Segment and Specialize Your Strengths
• Segment and specialize to available skills and
strengths
• Outsource missing skills and strengths
Claims
NonComplex
SIU
Exception
Complex
Routine
Understand the Power of Data
• Improve/clean-up your
data
• Avoid using bad data
• Leverage data to help
you prepare
• Use data to improve
Logistics and response
Constantly Monitor Performance
• What get’s measured, get’s done
– What get’s incented, get’s done too
• Utilize performance metrics and balanced
scorecards
• Cascade to all Sr. Leaders, teams, and
individuals
• Track and share results consistently and
Frequently
Build Good Vendor Partnerships
• Build partnerships with service providers
• You get what you pay for
• Make it worth their while
• Communicate and share information
• Reward compliance
Summing it up again…
• Start with the end in mind…focus on desired
outcomes
• Segment and specialize to your strengths
• Use data to improve
• Constantly monitor how well you’re doing
• Encourage partnerships with service
providers
TWIA Tomorrow
• New core claims administration system
– Policyholder and Agent portals improve first notice of loss,
communication, and sharing of claims and policy information
– Business rules drive consistency and accountability across all claims
– More/better data drives automation and real-time diagnostic tools
• Additional CAT incident claims processing models
– Managed Claims Model (MCM)
– Contractor Examiner Teams (CET’s)
– Policyholder self-Managed claims
• Leveraging emerging or existing technology
– Interactive damage assessments
• Mobile/Video/Wearable technology
Questions?