Mike, thanks very much for speaking with us today. Let's start at the very beginning. What was your first job out of college?
Mike Lancashire: My first insurance job was as a claims adjuster at Kemper Insurance. However, right after I graduated college, the U.S. economy was in a down cycle, similar to how it has been for the last few years. Jobs were difficult to find, especially when you were a new graduate, so I started out in retail and managed a Radio Shack store for a couple of years before joining Kemper.
Did you learn anything in the retail environment that translated into your claims career?
Lancashire: Oh, definitely. I learned a lot about customer service.
When did you realize that a claims career was what you wanted?
Lancashire: Once I got into investigating and settling casualty claims, I realized it fit my personality. I'm very inquisitive. At one point, I thought I wanted to be an engineer because I like to figure out how things work, and in claims, that kind of thought process fits very well with the investigation required.
Is curiosity a key component of a good claims professional?
Lancashire: Most definitely. Investigating is really the key to success in all claims handling because you can't properly reserve or settle a case without having a great investigation.
What kind of advice would you give to young professionals just starting out in their first claims job?
Lancashire: I think the industry has changed tremendously since I started. Right now, with so much industry specialization, it is easy to get pigeonholed into a certain line of business or a certain type of claim. My advice would be to gain as much technical expertise in as many lines of business as you possibly can, as opposed to just specializing in one line of business.
Many of us can remember when carriers offered extensive training programs to young professionals. Those programs have been severely cut back or eliminated. How does your organization train new employees?
Lancashire: Our largest claim operation is based in Auburn, Mass., where we recruit college graduates directly into our business. We start them in our first notice of loss unit where they spend six months to a year taking first notices, learning all the different lines of business, and familiarizing themselves with our systems and company culture. From there, we move them into a more challenging role—either handling fast-track property claims or fast-track automobile claims. We need to keep challenging our new hires and providing them with varying experiences quickly or they may lose interest.
Do you think the industry will begin to reinvest in that kind of more intense initial training and development of new professionals?
Lancashire: I think you're starting to see it. Large carriers are investing capital in claims education. These programs require adjusters to spend six weeks in intense training before they even get into a field office, so I think the pendulum will swing back in that direction.
The difficulty is for the smaller and mid-sized companies that don't have those resources. That presents a real challenge for super-regionals like Main Street America.
When you are searching for a "top-notch" claims professional at the management level, what qualities do you look for?
Lancashire: First, the candidate must have technical expertise. Secondly, I look for the ability to be part of a team. That is really critical in a claims management role because you have adjusters at different skill levels and folks with varying career aspirations. Thirdly, I look for an optimistic outlook on things. The claims management profession can be such a negative business, and an optimistic tendency can help us in finding solutions in any sort of situation we encounter. Having an optimistic outlook really helps us achieve success.
What advice would you give to claims professionals moving, perhaps for the first time, into management roles?
Lancashire: In today's environment, I think a critical management attribute is the ability to find the right mix between technology, sourcing, and core adjusting and investigation skills across your staff. Like it or not, sourcing is part of our current environment, and new managers, as well as their staffs, have to understand what role vendors are going to play in the claims process.
How do you ensure that there is a good way to take good ideas from the front line and have them move up the chain of command?
Lancashire: It really has to be part of your culture to encourage that kind of creativity, and we do this at Main Street America in a lot of ways. For example, at the end of last year we analyzed our best practices for handling automobile claims. We realized our insureds would have to potentially speak to five different people, explaining the facts of their accident five different times.
We knew that this wasn't a best practice in terms of good customer service, so we held roundtables with our staff to solicit new ideas on how to address this. We went to each of our regional offices and met with the casualty reps and auto physical damage reps and presented the problem to them. We asked them for their suggestions. We used their feedback to create a better process. When our claims staff sees their feedback being used to make positive change, it encourages them to keeps those lines of communication open with management and continue to offer process improvement suggestions.
Given your broad experience and your role as senior industry executive, what is it that you see a need for right now in the industry that isn't being offered?
Lancashire: Analytics. I think claims management is on the trailing edge as to how analytics are being used in the industry. Analytics are being used for pricing, and we're seeing it around fraud identification, but where I see the real power of analytics is in using it for claims assignments—getting the right file to the right adjuster at the beginning of the claim.
Looking into the future, what do you see a claims organization looking like in 10 years?
Lancashire: For one thing, I see a much better use of technology. For example, I've been looking at a product called Property Delivery. Part of this service includes the ability to take an iPad, go out to the location of a property loss and Skype the adjuster. In essence, the adjuster is sitting at his or her desk, and the independent person is out in the field actually showing the adjuster the loss.
The adjuster can then say, "Go back. What's that in the corner over there, or let's go back and zoom in on those cracks in the wall." I want our desk adjuster to be the quarterback on the claim, and this new product helps them do that. The implications of emerging technologies like this are enormous for our industry.
We're also on the verge of getting into a completely paperless environment. So, in terms of the future, I see a lot more remote adjusters. With Web-based claim systems, imaging systems and the technology that is available, you can strategically place your adjusters anywhere you need them. We have also engaged telecommuting for our claims staff, as approximately 30% of our adjusting staff works from home two or three days a week.
As technologies develop, do you think companies will be increasingly leaner in terms of staff resources?
Lancashire: The adjusting process is so administratively demanding. Again, I see the adjuster as the quarterback of the team, and that means coordinating various vendors and technologies. However, I don't see the adjusting staff shrinking any more. I see technology as an enabler to allow us to become better claims professionals. It's something that adds to the profession, not detracts from it.
What's a good balance for a claim adjuster's time in terms of administrative tasks versus adjusting?
Lancashire: At one point, we were probably at 70% administrative and 30% adjusting. We've made some enhancements, like providing two monitors on all adjusters' desks so they can be signed on to different systems at the same time and creating interfaces with vendors so adjusters don't have to key in duplicate information.
Currently, I'd estimate that we're closer to 50% administrative and 50% adjusting activities, which is a significant improvement. When we get our imaging system in place, I hope to be at 45% administrative and 55% adjusting. We will continue to make enhancements to operate more efficiently.
Would you be willing to share something that not many people may know about you personally, something about a hobby or area of interest for you?
Lancashire: When I moved from Long Island to Florida in 2003 to join Main Street America, I took up surfing. It's normally a sport you start when you are 10 or 12 years old, so learning to surf in my 40s was a real challenge. It took me a couple of years to really figure out how to do it, but now it's truly a hobby, if not even a passion. It's a great stress reliever. I converted two years ago and went from long boarding to stand-up paddle surfing. I actually had to trade in my car so I could get a vehicle big enough to haul my surfboards around. For all I know, I may be the only senior executive in the insurance industry who paddle surfs!
Marc Lanzkowsky and Taylor Smith are contributing writers for Claims Advisor. Lanzkowky is founder of The Claims Spot—a Claims Advisor media partner and award-winning blog dedicated to claims professionals. Smith is a contributing editor for The Claims Spot. Chief Concerns are interviews with C-suite and top-level claim executives that seek to give insight into the insurance claim industry's highest leaders.
