Claims experience for income protection insurance business has been worse than expected in Australia for the past few years. Insurers have been tackling the claims management challenges through initiatives including increased focus on data analytics and investment in systems and technology.
However a third, critical aspect for consideration is claims staff management.
Generally, claims managers have full case-loads in a high pressure environment, while usually dealing with injured members of the public. As an actuary married to a social worker, I investigated whether insurers should consider looking wider than industry to investigate approaches to management which have to deal with similar issues while maintaining a motivated team environment. Through research and meeting a number of claims managers and social workers, I compared experiences for claimants/clients and the impacts on staff tasked with dealing with the people.
There are a number of similarities identifiable between social workers and claims managers:
usually a huge never-ending workload;
work can result in emotional impacts;
need to cope with third parties trying to influence, e.g. trustees, financial advisors, employers (for claims managers); community services, funders, local communities (for social workers);
they can get the blame when things are going wrong;
both are taking steps to develop professional status through recognised qualifications; and
media portrayals are generally poor.
There are some clear similarities between the professions. The best people generally have a passion for the work, but it can be thankless at times, with pressures to close claims/cases from a variety of sources. The pressures can come from internal sources (e.g. when company results are poor) and external sources (when service standards have been agreed), and workflow not well-managed can lead to high turnover of staff within both professions. In addition, there is rarely positive press from either insurance companies paying claims, or social workers making changes in clients’ lives – the sensationalism within today’s media tends to find blame in both professions when things are perceived as going wrong.
There are also a few significant differences in the professions which can lead to interesting contrasts in staff behaviours:
- pay – most social workers are on fixed pay scales whereas claims managers can negotiate market-rates of remuneration;
- the goals are often different for claimants/clients; and
- social workers generally have more face-to-face meetings with clients than claims managers, although insurers have been evolving this aspect of claimant contact recently.
Often social work clients have a goal of making change in their lives but insurance claimants, who are potentially receiving regular income payments while being off work, may have different motivations.
In the past, social worker and claims managers may have had different socio-economic clients but with income protection insurance becoming more common as a default option for super fund members, the range of people with this insurance is becoming much wider.
In terms of pay, the median pay in Australia is fairly similar (Claims managers – $64k, social workers – $54k, source www.payscale.com) but there is a much larger potential range for claims managers. The 90th percentile for social work salary is around $80k whereas claims managers in demand can earn up to $140k, and have opportunities to move between organisations for increased financial reward. Social work pay is effectively regulated through Government-funded scales which perhaps contributes to different behaviour from members of this occupation compared to corporate employees.
CLAIMS CHALLENGES WITH POTENTIAL SOCIAL WORK SOLUTIONS
There are three challenges within claims management with potential ideas from social work:
1. Getting right measures of success and outcomes
In most social work initial interactions, the worker will seek to establish what the goal is with the client. There are well established practices (e.g. motivational interviewing skills, solution focused-brief therapy) which can establish the goal which can then be worked towards.
One approach often used in social work to work towards the goal is ‘systems theory’, which seeks to understand the pressures of the interrelations between individuals, families, institutions, communities, companies, industries and even the culture – the right outcome for a client may require changes to a number of these systems.
For insurance companies, the ‘goal’ will almost always be to get a claimant back to work. However, that might not be appropriate for the client and other steps are required in order to finally achieve the ultimate goal. Insurance contracts are often set up to definitively assess whether a condition has been reached or not (e.g. a doctor assessment of Trauma) rather than to really consider what a client may be capable of.
Using social work techniques to understand what a ‘successful outcome’ might be for a claimant (which may not initially be to return to work) would better enable claims managers to make long-term, sustainable improvements in claimants’ lives, potentially resulting in faster recovery and lower overall claims costs.
2. Choosing the best approach for claimants
Insurance companies will have procedures for dealing with different types of claims, usually leaving scope for claims managers to use judgement in individual cases. However, social work (along with other industries) place a much higher emphasis on ‘Evidence-based practice’ (EBP). EBP promotes what works for whom and under what conditions and is developed through the application of industry- accepted research. In social work, EBP can be seen as a way to manage tension between working in a humanist profession acting on behalf of a state/institution. It can also enhance practitioner accountability and promote skilled decision-making.
EBP has been widely used for 10-15 years in social work but is not universally loved. A survey in 2012 of 364 Australian social workers found strong support for EBP (80% supporting it), with 2/3rds of workers reporting changes in practice due to research. However, there were some organisational barriers to EBP implementation reported and there was often not enough time or funding to allow easy access to research. However, even with these issues, EBP is a key tool for experienced social workers, who can use it critically, being aware of some of the ethics and beliefs underpinning the EBP approaches. It enables organisations to base most decisions on generally-accepted, industry-wide best practices.
In a claim management context, the question which should be considered is “How do we know we are doing the right thing with claimants?” Most insurers have their own review processes but there is little current evidence of industry-wide established research being used and shared between companies. Some insurers are beginning to consider ideas in this space but as EBP takes many years to become established is it time for insurers to work together to fund research into best practices for claims management?
3. How to have a trusted relationship with client/claimant
Most insurance companies seek to create a trusted relationship with the customer – after all, a customer trusts the organisation to look after them or their family in times of injury or illness. However, there are practices within claims management functions which can, often unintentionally, undermine this trust. The ethos within a claims function is often set by what is valued by the leaders – are high decline rates of claims measured and promoted, or is more credit given to an approach which results in the best long-term outcome for a customer? Training which focuses on new techniques in surveillance can create a natural skepticism in claims managers that claimants are genuine – no one likes thinking that someone is ripping their company off, especially if times are tough. However, when a life insurer is looking for a customer to trust their proposed program of rehabilitation back to work, the concept of ‘trust’ has to work both ways.
Over the last few years, social work has increasingly moved to more person-centred approaches. This has meant that individuals have had a greater “seat at the table” when discussions are being had and the impacted people have felt far more empowered to make the changes required. These approaches do not imply that social workers give in to all client demands, in a similar way that a person-centred approach for insurers would not mean that all claims should be paid. However, creating a team culture which celebrates and promotes actions which are always in the claimants’ interests could have positive implications for the trusted relationship between insurer and customer.
While there are constant financial and workload pressures within insurance claims teams which can make initiatives difficult to justify and implement in practice, there is always scope for consideration of new ideas. Social workers will invariably seek to take a long-term approach with clients, to achieve the right goal in the correct way. This may partly be due to the personalities of people who choose to enter social work and partly a function of the way social work services are funded, but maybe insurers should seek further advice from this sector to really create a positive experience for customers.
Finally, just to prove that Social Workers, like Actuaries, can have a sense of humour, here is a joke about their profession:
How many social workers does it take to change a light bulb?
One, but the light bulb first has to really WANT to change
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