The Ethics of Quality Claims Service

It is a shortcoming of business thinking when leaders believe that ethics has nothing to do with business concerns. Demonstrating high moral and ethical standards may make us "feel" good, but more importantly, they are vital to today's business success. Study after study has shown that organizations which have a clear vision based on ethical practices are more successful over the long term than organizations suffering ethical lapses. What is the connection between ethical values and organizational success? Why does success follow ethics?

It is imperative that organizations that stress high ethical standards must also stress quality service. It is the consistent, quality service that ensures success. This is particularly true in a claims organization. In this Internet age, the claims professional may be the only contact a policyholder ever makes with a carrier. The quality of the service provided by the claims adjuster, supported by the high ethical values of the organization, has a direct bearing on the future relationship with that policyholder. As a primary touchpoint at a time of high stress, the claims representative is a vital key to organizational success and the image portrayed by the carrier.

To understand the connection between ethics and quality service, it is important to understand what we mean by ethical values. Most individuals agree that there are four major areas in which we demonstrate our ethical values: honesty and integrity; respect and caring for others; promise-keeping, trustworthiness and fairness; and, personal accountability. Ethics programs frequently discuss these four areas.

Often attendees quickly agree that these certainly demonstrate ethical values, but they have a more difficult time describing what they mean. For instance, when someone says "honesty and integrity," there is no doubt that they know what they mean by those words. However, describing the actions a person who is honest and has integrity would take is a bit more difficult and requires some reflection.

Frequently time is spent discussing this issue to aid the attendees in communicating the areas more clearly. The following words and phrases are often used to describe each:

Now, if we take a close look at the descriptors, we will find all the words describing what "quality service" is about. For instance, one hallmark of quality service is the level of communication between the organization and its customers. Customers demand comprehensive information delivered in a timely fashion. By doing so, the organization demonstrates respect and caring for its customers. Good communication requires that the organization be candid, forthright, courteous and respectful of the rights of the customer as a stakeholder. Words we just used to describe ethical values, but are also used to describe "quality communication."

Customers expect claims professionals to possess the knowledge they purport to hold. Being aware of one's own abilities allows claims professionals to operate within the constraints of their knowledge. At the same time, objectivity about one's knowledge can lead the claims professional to seek additional education and credentialing. The results of quality service enjoyed by the organization are in direct proportion to the level of knowledge held by each employee. This motivates organizations to support educational endeavors and to find ways to identify knowledgeable individuals. Credentialing through associations such as the Registered Professional Adjusters Society provides documentation of a certain level of knowledge that customers can depend on. At the same time, this credentialing demonstrates the organization's commitment to high quality service.

Failing to take responsibility when something goes wrong is a sure way for an organization to lose a customer, or worse, suffer litigation and related costs. Law books are filled with examples of errors or omissions committed by claims professionals who did not take personal responsibility for the outcome of the cases they were assigned to resolve. Failure to return phones calls, failure to dispose of salvage in a timely manner, failure to document damages adequately, are all failings in personal accountability. More seriously, failing to advise the insured of the potential for an excess judgment or failing to advise the insured of a coverage question can lead to allegations of bad faith. Personal accountability rests with each member of the claims organization, as the organization's "accountability" is demonstrated through them.

Vince Lombardi said, "The quality of a person's life is in direct proportion to their commitment to excellence, regardless of their chosen field of endeavor." He could as easily have made this statement about claims organizations. Excellence in the organization depends on the high ethical values and excellence of its members. Ethics and quality service are the pathway to success!

Elise Farnham, CPCU, ARM, AIM, CPIW, has over 30 years experience in the risk management and insurance industry. She is president of Illumine Consulting, a firm dedicated to providing experience and knowledge to the risk management and insurance communities through continuing education and claims management consulting, and an RPA board member. She may be reached at 770.367.3148 or visit www.elisefarnham.com.