Idea Transcript
Insurance claims services
Realize value Our professionals can help you achieve your recovery objectives with insurers through deep industry experience, innovative approaches and keeping the company’s interests in the claim our priority.
Speed to recovery Through proven methodologies we assist our clients to effectively drive the claim development process, to expedite claim cash flow and to focus on running their business.
Maintain relationships Insurance. Business. We speak both languages. Whether internal or external, we can help you manage expectations for your claim and bridge the information gap from the business to the insurance company.
Insurance should be one of many vehicles to get an insured back to business as usual and to recover what was lost. To be successful, you must drive the claim process.
The driving force in insurance claims Insurance recovery is more than just an accounting exercise. The losses resulting from an insured incident may impact your business in ways that do not become apparent until well after the loss or until the right questions are asked. Many times these losses go undetected due to inexperience or a lack of understanding of the coverage.
Realizing value
This will require communication with the insurer, strategic thinking and a driving force behind the claim to develop, present and substantiate it in a way that generates an interim flow of proceeds. This process must be focused to ensure that the integrity of the claim is maintained and proper proof of the loss has been provided to insurers.
Realizing value in your claim starts with the recognition that an insurance claim, regardless of size, is a financial transaction between the policyholder and the insurance company.
Realizing value in your claim starts with recognizing that an insurance claim, regardless of size, is a financial transaction between the policyholder and the insurance company. You have paid premiums for the policy, an insurable loss has occurred and certain coverage is afforded under the terms of the contract. In any transaction, each party’s goal is to realize the benefit it to which it is entitled. Using our deep industry experience and innovative approaches, you have the opportunity to realize the value in your claims. This is achieved through a thorough understanding of the requirements of your policy, its proper application to your losses, and the knowledge and experience of the process and requirements for preparing and resolving an insurance claim. Getting every last cent from an insurer may not be your ultimate goal. In many cases, effectively managing the speed of recovery can be just as important as the ultimate amount recovered. For instance, in a situation where a company will rely heavily on the proceeds received from insurers to fund restoration or to continue to operate, managing the cash flow from the claim is imperative.
Speed to recovery An insurance claim is a series of negotiations between the insured and the insurance carrier beginning day one of the loss. It is important to understand that the recovery process can take months, or even years, depending on the size of the loss and the complexity of your business. Communication, both internally and externally, is important to setting and managing expectations of the various players in the claim. Internally, you are faced with coordinating the efforts of multiple divisions, including risk management,
legal, operations, sales and marketing, and accounting to develop the claim and communicate to your senior management. Externally, you must communicate early and often with the insurers and their experts, including the claims adjuster, engineering, building and accounting experts. Proactive communication with the insurer will help facilitate the claim process and move it forward, but it must be strategic and deliberate. Showering the insurers’ experts with volumes of data that has not been properly evaluated, is incorrect or incomplete may actually prolong the recovery process and will damage the credibility of your claim.
Maintain relationships Maintaining positive relationships throughout the claim process will help expedite the recovery of the business and receipt of insurance proceeds. Policyholders and insurers share a common interest — get the business back up and running and minimize future losses. While each party may have different views of what was actually lost, keeping this common goal in mind could be the difference between negotiating your claim and litigating it. Insurance should be one of many vehicles to get an insured back to business as usual and to recover what was lost. To be successful, you must drive the claim process. The professionals of Ernst & Young’s Insurance Claims Services practice are adept at helping companies achieve their insurance recovery objectives. Using methods and approaches proven on countless claims for world-class companies, we help you traverse the winding roads of the insurance claim process. From claim development to loss measurement — from initial loss assessment to final resolution — we can help you realize the value of your claim and expedite recovery while maintaining positive relationships. Insurance
Insurance Claim Services |
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DRI Dedicated resources
Requirements for communication
Information flow
Companies that achieve success in claims employ resources, internal and external, that are dedicated to moving the claim forward and reaching resolution.
In every claim, communication is a key to success. Take some simple steps early in the claim to facilitate a regular dialogue throughout the claim process.
Control it! It is the insured’s burden to prove its claim and provide documentation to insurers. Keep the information flow focused and pertinent to the claim.
• Assemble a team of claim preparation resources:
Within your organization:
Within your organization:
• Designate a single point of contact
• Obtain all documentation supporting incremental costs
• Risk managementmanagement • Claim preparation professionals • Operations • Finance/accounting • Your team should have defi ned roles and match the resources the insurer will employ to review your claim • Prepare a preliminary loss estimate • Work with the adjuster to explain the loss • Timely communication to carriers of loss issues
• Send notice to relevant business units within your organization making them aware of the loss • Communicate with senior management With insurers: • Establish a protocol for proper communication during the claim • Recommend a single adjuster to simplify the communication of the loss • Recommend a carrier steering committee if there is no lead insurer
• Instruct business units to maintain all documents • Provide risk management with copies of all claim-related documentation With insurers: • Create a master list of all requests, including response dates • Secure agreements on claim issues in writing • Maintain a master list of all documents provided • Fully support your claim submissions
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| Insurance Claim Services
VER Ernst & Young’s Insurance Claims Services group assists you to drive your claim to resolution.
Velocity of the process
Educate internally
Resolve claim items to achieve objectives
Establish it! Keep the claim process moving forward at your pace. This will require proactive communication — internally and externally — to keep the players in the process focused and moving towards resolution of the claim.
An insurance claim is a complex transaction and can be challenging for all involved, even if a company has previously been through the process. It is important to explain the process to those who will prepare, present and negotiate the claim.
Resolve claim elements as you go. Do you agree with the adjuster on an item? If appropriate, ask for payment and settle on that item. Resolve key claim areas in manageable and methodical pieces to achieve your recovery objectives.
• Establish a schedule with the insurance adjusters and accountants
• Manage expectations of senior management regarding:
• Reach agreement on claim components throughout
• Hold people to deadlines • Set a defi ned agenda for each meeting • Provide regular updates to the loss estimate when data is available and has been properly evaluated • Pursue advances or partial payments
• Process
• Remember: get it in writing
• Timing
• Obtain cash advances and limit open claim items
• Recovery • Manage expectations of business-line personnel • Determine how claim proceeds translate into recovery for individual business lines • Provide status updates to facilitate communication
• Resolve claim issues with face-to-face meetings • Coverage issues • Documentation issues • Designate a company representative to work directly with carriers to resolve open items
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Selected project experience Manufacturing Businesses are fluid, and catastrophic loss may present opportunities to implement changes to a company’s operations. When an equipment manufacturer’s coupling plant was ravaged by a tornado, we assisted the company to prepare its property damage claim and to develop its business interruption measurement based on hypothetical timelines as many building and equipment components were not replaced in the same manner that they existed prior to the loss. This allowed the company to achieve business objectives while preserving the value of its claim.
Retail We assisted one of the largest retail drug chains in the United States in recovering losses related to the damage and destruction of close to 50 stores in the wake of Hurricane Katrina. Due to the company’s disaster preparedness and the mobilization of temporary locations after the storm, it initially appeared as though they owed their insurer a large credit for an increase in business following the storm. By analyzing individual customers’ pre- and post-storm spending, we assisted our client in demonstrating that the increase in sales was due to spending from outside the chain’s pre-loss customer base. Based on our analysis, in the context of the physical damage and the insurance coverage in place, the business interruption claim was successfully resolved, and the retailer was fairly compensated for the ongoing losses sustained in its core business.
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Hospitality and real estate
Healthcare
When an island resort sustained extensive damage to its roof that required replacement, insurers initially denied coverage for a higher wind-rated roof suggested by the roofing contractor. By facilitating communication between the contractor, the insured and the adjuster, and by analyzing the weekly business interruption exposure, we assisted our client in demonstrating that replacing the roof as-was would cause a six-week delay in reconstruction while the contractor waited for the lower windrated roofing material to be shipped to the island. The cost of the upgraded roof was paid by insurers instead of paying an additional six weeks of business interruption.
After a catastrophic incident temporarily reduced the number of patients a hospital serviced, our client’s insurer attempted to prorate the payment of ordinary payroll based on the number of patients that nurses were overseeing. We assisted our client to support its opinion that the intent of ordinary payroll coverage is to allow employers to retain key employees rather than laying them off after an incident. We demonstrated that while the number of patients per nurse was reduced, the retention of key employees at full pay was necessary for the continued operations of the hospital. Ultimately, the cost of those employees was paid under the insured’s ordinary payroll coverage.
Consumer products One of the United States’ largest consumer products companies was severely impacted after a hurricane slammed into one of its primary production facilities. The impact of this loss created ripples throughout the industry and threatened the company’s market share in key products. We assisted the company in the preparation of its property damage and contingent time element insurance claim for four of its business lines that had several impacted locations.
Federal Emergency Management Agency (FEMA) FEMA claims, by their nature, are complex and documentintensive. FEMA requires that documentation be submitted via established procedures and in accordance with the Stafford Act. In addition, FEMA’s claim categories are very different than the typical insurance claim. We assisted a nonprofit organization with limited insurance coverage to prepare its FEMA claim in conjunction with its insurance recovery to reach successful resolution of claims and to expedite recovery.
Chemical As a recent hurricane approached the gulf coast and local authorities issued mandatory evacuation notices, a large chemical complex shut down its operations to mitigate possible catastrophic losses. We assisted this client in capturing the costs associated with damages incurred during the shutdown and measuring the business interruption loss that resulted from the production outage. We also worked with the client to show how the production loss related to the physical damage to support its claim for protecting and preserving its property.
Automotive Complex insurance claims involve input and communication with a host of professionals both internally within a company and externally to insurers. We assisted an automotive manufacturer after a tornado destroyed large portions of its SUV assembly plant, and our team interacted with risk management, numerous corporate controllers and plant managers to analyze and capture loss information to fully understand the impact of the event and properly convey information, on a realtime basis, to insurers and the market.
Selected industry experience
Specialty claims areas
• Agribusiness
• Healthcare
• Business interruption
• Airlines
• Higher education
• Contingent business interruption
• Automotive
• Hospitality
• Property damage
• Beverages
• Industrial and farm manufacturing
• Extra expense
• Chemical
• Investment banking
• FEMA claims
• Commercial banking
• Household and personal products
• Environmental claims
• Communications
• Mining
• Political risk
• Consumer products
• Oil and gas
• Special event claims
• Energy
• Pharmaceuticals
• Builder’s risk
• Financial services
• Railroads
• Stock loss
• Food consumer products
• Retail
• Boiler and machinery loss
• Food and drug stores
• Sports and entertainment
• Fidelity claims
• Food production
• Technology
• Liability claimss
• Forest and paper products
• Transportation
• Gaming
• Utilities
Liability claims
Special event
Our professionals assist in all types of claims including third-party liability claims, appraisal, alternative dispute resolution and litigation. One of the nation’s largest consumer products companies engaged us to prepare its liability claim resulting from a fuel depot explosion that caused significant damage to its European, Middle Eastern and Asian packaging and distribution centers. We assisted the company in the preparation of all aspects of the claim, the presentation of the loss estimate to the liable party’s representatives and successful resolution of the claim.
Special event claims are complex. Not only is there a risk of lost revenue, there are significant challenges and costs related to managing the complexities of rescheduling major events. After one of the nation’s premier professional sports organizations was forced to reschedule its championship game after its season was postponed a full week, our group assisted in the preparation and resolution of its claim for lost income and significant extra expense related to the rescheduling of venues, advertisers, and a multitude of large groups and attendees.
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© 2014 EYGM Limited. All Rights Reserved. SCORE No. WW0341 1404-1235402 ED 0615 This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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