Workers’ Compensation Consulting Shifts Claim Reserving Practices
To assist in these evaluations, the carrier provided claim status reports which contributed additional details the carrier believed to be important to the claims.
During Brown & Brown’s claim review, the team found that 13 of the 15 claims being evaluated had significant reserving issues. Based on these findings, the carrier agreed to $64,746 in reserve reductions. Beyond those immediate reductions, the carrier also agreed to review the claims for an additional $391,643 in various reserves for accuracy and further reduction.
The Brown & Brown claims team’s efforts in reviewing the claim activity and reserving lead to the carrier reassigning the open inventory to a new claims adjuster, who would be able to more effectively meet the service expectations of the customer and execute the process using industry best practices.
After four months, our team completed a second claims review. Through the solutions our team administered during the prior claims review, the open claim count was reduced to 10 claims, and the total open reserves also dropped by $412,666 to $350,380.
After the first claim review with Brown & Brown, the Chief Financial Officer (CFO) commented that they had previously attempted to address what they felt was excessive reserving with their previous broker without any success. The CFO was impressed with the effectiveness and speed of the process that Brown & Brown achieved in a short timespan. The company was left in a stronger position once claims were reduced from 15 to 10 and reserves were decreased from $763,056 to $350,380.
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