Reinsurance Adjusting Program gives mutuals a leg up
Do you remember the worst weather you ever lived through?
Kate Johnson does.
It was a derecho. But maybe not the one you’re thinking of.
The derecho Johnson is thinking of happened Friday, June 29, 2012. It tore through the eastern half of the United States. From Iowa to New Jersey, millions of people suffered property damage and power outages. It was to blame for 22 deaths and $2.9 billion in damages. Some of those were policyholders of Patrons Buckeye Mutual Insurance Company in eastern Ohio, where Johnson is the manager. The mutual took a $1 million CAT loss because of the storm.
Fortunately, Patrons Buckeye Mutual had an ally ready to help: Grinnell Re’s Reinsurance Adjusting Program (RAP).
“I contacted our RAP adjuster at the time, Randy Lamp,” said Johnson. “Randy started taking claims and advised me that a Grinnell Re CAT team was on
the way.”
Together, Patrons Buckeye Mutual and Grinnell Re’s RAP adjusters handled the deluge of claims across eastern Ohio.
“The RAP adjusters handled all the derecho claims in a timely manner and in the way we had come to expect with the team,” said Johnson. “They took care of our insureds and settled them well within our expectations.
“When RAP says they are here to help, they mean it.”
What is the Reinsurance Adjusting Program?
Grinnell Re offers RAP to Grinnell Mutual members as a cost-effective, professional claims-handling solution. RAP assists members with a variety of claims needs, from CAT events like the derecho that hit Patrons Buckeye Mutual to the more commonplace home and farm property losses.
“Mutual company executives wear many hats and may not have the luxury of employing large staff that can specialize in insurance disciplines,” said Kevin Farrell, vice president of Reinsurance at Grinnell Mutual. “RAP allows them to focus on their operations while delivering consistent, quality claim service to policyholders.”
Grinnell Mutual launched RAP in 2002 in South Dakota with a single adjuster, Kevin Hieber (who is still a part of the RAP team). Now there are 51 adjusters. Today, most Grinnell Mutual members — more than 175 — contract with Grinnell Re to use RAP and the 58-member RAP team handles an average of 16,000 claims each year.
For Grinnell Mutual members (whether they contract with RAP or not), adjustments for losses over $50,000 are a free member benefit. For RAP members, those large loss adjustments are not counted toward their contract. In 2020, there were $98 million in claims payments handled by the free large-loss adjusting service provided by RAP.
“The RAP team members guide policyholders through the claims process,” said Kevin Kies, assistant vice president of Reinsurance and head of RAP. “They are well-versed in coverage determination and can also accommodate specific expectations a company may have. This allows the adjuster to communicate effectively with the policyholder to reduce any anxiety throughout the claims process.”
RAP closes the talent gap
Even in a year of record unemployment in the U.S., the supply of professional claims adjusters cannot meet the needs of property-casualty insurance companies, and claims talent is among the most difficult to recruit for the industry. A recent search on LinkedIn served up more than 4,400 open claims-adjusting positions.
The February 2021 Insurance Labor Market Study by The Jacobson Group and Aon revealed that insurance companies reported that claims positions are moderate to difficult to fill. And small insurance companies reported that claims hiring was their third-greatest need (technology was top). Another reason? Retirements. The Jacobson Group reports that nearly one-quarter of claims professionals are 55 and older.
“Some companies don’t realize how tight the candidate market still is,” said David E. Coons, senior vice president of The Jacobson Group, a leading insurance staffing and executive search firm. “They expect there to always be a cadre of qualified, interested, and available individuals. By having quality, professional claims adjusters, you have a stable workforce that can be easily complemented by contingent workers.
Additionally, carriers benefit from permanent employees who are well-trained on their own systems, processes, and procedures, especially when it comes to customer care and customer service.”
RAP gives Grinnell Mutual members an alternative to full-time claims staff or third-party claims solutions.
“We have a talented, successful group of adjusters and supervisors,” said Kies. “RAP can offer our partners a claims solution that is on par with the larger carriers in the industry.”
When Belvidere Mutual Insurance Company policyholders suffered losses from major storms, Mutual Manager Nicolette DeCicco knew she could count on RAP and adjuster Todd Erickson.
“Grinnell Re helped us deal with the volume,” said DeCicco. “Todd provided professional, efficient service. It’s never easy dealing with a complicated claim, or a complicated insured. He goes above and beyond time and time again. You can tell he takes pride in his work.”
RAP ensures a personal touch
Property-casualty mutuals had $267 billion in net written premium in 2019, according to data from the National Association of Mutual Insurance Companies (NAMIC). While the largest writers in the industry write in the billions, the average Grinnell Mutual member may write “only” a few million. Its customers are often neighbors and friends, too. So it’s important for mutuals to deliver on the promises of their policies.
Coons, of the Jacobson Group, says good claims professionals are essential because they shape how policyholders feel about their claims experience.
That’s undoubtedly part of why mutual insurance companies outperform their stock competitors on claims service. According to the 2018 Mutual Factor study commissioned by NAMIC, which surveyed property-casualty insurance buyers, 84 percent responded that mutual companies “always settle claims fairly” and 86 percent said they “have excellent customer service,” compared to stock companies (55 and 61 percent, respectively).
Superior customer service allows mutual companies to differentiate themselves in an insurance marketplace that some customers view as a commodity.
A recent EY report found that 87 percent of policyholders “believe that the claims experience impacts their decisions to remain with insurers.” A McKinsey report found that most policyholders care more about claims service than claims payments. The top qualities for customer claims satisfaction were employee courtesy, communication, knowledge, and professionalism. The settlement amount ranked 12th.
“It’s the claims adjuster who holds the key to ensuring a positive overall customer experience,” said Coons. “As automation becomes common for more basic tasks, claims adjusters have more capacity for direct contact with policyholders. As a result, well-developed soft skills such as communication, empathy, and critical thinking are more important than ever.”
RAP adjusters can also bring humanity into the claims process. Kies recalls how one RAP adjuster responded to a loss on an Iowa farmstead following a tornado.
“The adjuster went out the next day to meet with the insured and provide guidance. He had packed his cooler with bottled water, handing it out to the policyholder’s neighbors, who had come to help with the cleanup.
“The policyholder really appreciated that small gesture. It got the claim off on the right foot.”
Common goals, trusted relationships
At Patrons Buckeye Mutual, Johnson works closely with Craig Gardner, a RAP field property claims adjuster/inspector. Gardner’s commitment to quality work gives Johnson peace of mind.
“We pride ourselves in the personal touch and prompt attention we give to our insureds,” said Johnson. “Craig does the same. I know when I receive a claim and assign it to him, it will be handled with professionalism and accuracy. I can follow the claim online and get updates from the adjuster through the entire claims process.
“My mind is at ease because my insured is in great hands and I never have to worry.”
LaPrairie Mutual Insurance calls Henry, Ill., home but it is authorized to write policies across 80 counties in the state. Mary Jo Robison, the mutual’s secretary-treasurer/manager (and a Grinnell Mutual board member), counts on RAP.
“We see Grinnell Re’s RAP employees as an extension of our own staff. RAP is a great asset to our company at a reasonable cost,” said Robison. “We can service our insureds efficiently and in a timely manner without having to hire and train additional staff.”
Travis Johnson (no relation to Kate Johnson of Patrons Buckeye Mutual), a senior property claims adjuster, works with Robison and LaPrairie Mutual.
“We have the same goal: Treat policyholders fairly and provide the best products and services possible. Mary Jo is always available and she has a keen attention to detail, a deep knowledge of LaPrairie’s policies, and a strong desire to provide the best service to her clients,” said Travis.
For Robison, the appreciation goes both ways. “Travis has been a wonderful asset to our mutual. He has become both a valued adjuster and a good friend,” said Robison. “He is honest, dedicated, and very knowledgeable. Those are qualities we truly appreciate.”
“Even though I am a Grinnell Mutual employee,” Travis said, “I feel like I am part of the team at LaPrairie Mutual, too.”
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