by Steve Wightman
The strict rules of claim-engagement for insurance companies in Florida to protect policy holders have contributed to a larger problem. Not long ago, the universe of post-loss ‘Claim Makers’ began to deploy new, more coordinated, guerilla tactics to better capitalize on insurers’ every-weakness, using policy-holders as cover. Adjusters marching in formation, with their strict rules of policy-holder engagement were sitting ducks.
Today NAIC says that property claim lawsuits in Florida alone represented 76.4% of the national total in 2019. Claim Makers’ frustrating tactics from just a few years ago are now category 5 problems.
Claim Makers know how to identify, connect, and convince homeowners to assign claim-control over to them. They are fast, agile, and they are realizing Disney-like commercial results. They know your customer.
Several years ago I had presence at one of the early Claim Maker conferences. The event felt underground, dynamic, and audacious. Lawyers presented surefire ways to setup to win. Experts explained how to conceal overhead and profit amplification. Hucksters shared the proven schemes to close customers.
Intelligence was abundant and free flowing. Insurers that were considered most vulnerable (or disliked) were called out by name. Maps were provided for new claim-veins being discovered. Sessions that taught what keystrokes in estimating systems were packed.
One first time attendee contractor told us she was there out of curiosity. She had been quite content with the 45% profit she had been enjoying. One contractor said his formula was already consistently delivering 100%+ profit, he seemed there to evangelize.
The strategies and tactics were all about increasing the check from the insurer; not increasing work efficiencies, customer satisfaction, or ways to expedite work to improve profits. (Rechecked the conference agenda.) The keynote message was get rich … “just don’t commit fraud”.
Claim Maker strategies are comprehensive and forward-looking. They can readily unearth claims, propose extraordinary prices to do work, and enjoy claim denial, where real fortunes can be made.
What will Florida Senate Bill SB 76 do to impede Claim Makers, given it fell short of the absolute minimum solutions for reform and consumer protections? My guess is not much. The DNA of Claim Makers’ is nimble, adaptive, and survivalist above all else. The challenges that SB 76 presented them seem like simple pivots for a high functioning segment with a tiny fraction of the rules of engagement that insurers must abide by.
For now, adjusters will remain in formation. Claim Makers will continue to plunder. An endless line of insured pawns’ will be sacrificed.
Steve Wightman is CEO at Polished Rock. The company consults to insurers and reinsurers to minimize reconstruction and supply chain friction following catastrophe. No expert in the industry has focused more passion and time on the complex problems affecting the insurance industry and its customers rebuilding from catastrophes. Wightman can be reached at [email protected].
LMA Newsletter of 6-1-21