The Right Formula for Claims Closure
Kevin Moss jocularly refers to himself as a “recovering adjuster.” But the term is apt, given the way his view of claims has evolved over time. He sees the big picture, he asks questions and listens. He figures out how to turn each unique situation into a win for everyone.
Moss is the director of Casualty Insurance and Risk for Greenville, S.C.-based Michelin North America Inc., managing risk for 22,000-plus employees across 19 plants. One key area of focus for Moss, since joining the company in 2007, has been reducing the company’s outstanding liability exposure from worker injury claims — some decades old.
In 2014, Moss launched Michelin’s largest comprehensive claim review to date and determined that of the company’s 483 open claims, 186 high-value claims accounted for 83 percent of Michelin’s outstanding liability.
Working closely with partners from claims services provider Gallagher Bassett Services and broker Willis Towers Watson, the team brought in reserve experts and undertook a sizable claims closure project.
The outstanding exposure on the closure project has been reduced to $14,097,290 – a 46 percent reduction in outstanding reserves. Achieving that, said Moss, takes hard work, but the keys to success are quite clear.
First things first: Put in the work on the front end to review all claims and ensure they’re correctly reserved. With that locked down, you can put settlement plans in place for each claim, involving annuity companies where possible.
Moss says he’s not opposed to spending extra money to close a claim, and he credits Michelin’s leadership for allowing him the leeway to do so. Getting that kind of buy-in for a claims closure project, he said, means being able to clearly express the business case and the benefits for the company.
“I want to make sure that the financial people here understand what I’m doing, that my boss understands it. So I’ve had to learn how to speak finance — I do have an econ degree so that helps.” — Kevin Moss, Director of Casualty Insurance and Risk, Michelin North America
“I want to make sure that the financial people here understand what I’m doing, that my boss understands it,” he said, “so I’ve had to learn how to speak finance — I do have an econ degree so that helps.”
When it’s time to approach claimants, keep in mind that some claims require careful handling.
In Michelin’s case, “most of the older claims are medical,” Moss explained, “and people are scared to monkey with something they’ve been doing since the ’60s.”
That’s why Moss wasn’t content to just send out letters. He knew that in some cases, his efforts would be better spent going to people’s houses, bringing an annuity expert along, and explaining to people face-to-face what settling the claim would mean.
With many of the claimants advancing in age, Moss would talk to them about creating a transferable annuity, allowing them to give it to a grandchild or other family member to help pay for college.
Above all, Moss is committed to making sure each settlement is fair.
“Not only do we want to make sure we understand what the exposure is,” he said, “we want to make sure we do the right thing by everybody.” &