Negotiation Science Matters: A Critical Takeaway for Claims Leaders in 2026

This is Part Three in a three-part Risk Insider series that makes the argument that strengthening insurance industry negotiation skills and practices is a vital bulwark against the nuclear verdicts and other adverse legal outcomes that are leading to out-sized losses for insurers and their insureds.

Part One of the series can be found here. Part Two of the series can be found here.

As a practitioner in our industry for more than 40 years, I have lost count of the times I’ve heard negotiation referred to as “more of an art than science”.  Charisma, presence, reading the room, persuasive speaking, quick thinking, improvisation, controlling the conversation, good instincts — these just a few of the attributes we hear touted.

While these are spectacular courtroom attributes for any trial lawyer, in negotiation these elements matter far less than most professionals believe. At least, that’s what the science tells us.

That is because negotiation in high-stakes environments, (like insurance claims and litigation), is not a performance problem. It is a decision quality problem. Outcomes are driven less by those who speak most persuasively in the moment and more by how well decision-makers (plaintiff counsel) can understand, evaluate, remember, and justify the position being advanced by the defense.

Why Is This is Important to Claims Leaders?

Our industry settles 98 to 99 percent of the claims we manage. We run the largest negotiation network in the world. Tens of thousands of claim professionals and defense attorneys in our community have one purpose in mind – to negotiate claims to fair and reasonable outcomes. Said very directly, how claims are negotiated has a greater impact on the bottom line than just about anything else an insurance company leader can do.

This article asserts that we must approach negotiation differently. More to the point, it asserts that we’ll have to approach negotiation differently,  given the plaintiff bar’s reliance on written evidence-based advocacy, which is now made possible at scale through their massive adoption of AI.

This article argues that defense teams often hesitate to clarify their viewpoints in writing, preferring to disclose figures verbally rather than justifying them in writing. Further, I argue that our preference for verbal negotiation is weaker than plaintiff counsel’s preference for written negotiation, and that science says we’re doing it less effectively than we could be.

Let’s Talk Science

Verbal and written communication optimize for very different cognitive outcomes. Research across cognitive psychology, communication theory, and organizational decision-making consistently shows that the conditions required for accurate judgment, durable persuasion, and accountability are poorly supported by purely verbal exchanges (Baddeley, 2000; Cowan, 2001; Lerner & Tetlock, 1999).

When one side of a negotiation systematically relies on writing (think plaintiff bar using AI to generate written Demand Packages) while the other relies primarily on talk (think verbal offers from the defense), the advantage is more than subtle. It is structural.

Let’s examine why.

What Verbal Communication Is Actually Good At

So that you don’t think I believe we should all just pen letters to each other, I want to be precise about where verbal communication performs best. It is situationally powerful.

Rapport and Trust: Verbal communication excels at rapport and trust formation. It conveys social presence, immediacy, and emotional nuance that written communication cannot replicate. This is critically important early in relationships or when relational uncertainty is high. (Dennis, Fuller, & Valacich, 2008; Thompson & Nadler, 2002).

In our world of claims negotiation, this matters a lot when parties distrust one another’s motives, emotions are elevated, or if there are misinterpretations that need fixing quickly. Trust does not determine economic outcomes on its own, but not having trust can impede rational evaluation and certainly stall out agreements. (Thompson & Nadler, 2002). We don’t like delay and we don’t like irrational evaluation.

De-escalation and Emotional Adjustment:  Verbal communication is very effective for tone, pacing, and responsiveness. Negotiation research shows that live interaction can be particularly effective for managing affect and repairing relational damage, especially in contentious settings (Geiger, 2014)

As we all know, this can be critical in mediations, where emotional acknowledgement can be something required before the parties can proceed forward on substance. In that specific context, verbal effectiveness is everything.

Rapid Feedback and Convergence:  Verbal communication also excels at convergence, which is the aligning of shared understandings and the testing of tentative proposals.  This often happens late in negotiations and should not be confused with conveyance.

Conveyence is the sharing and processing of information. Convergence is reaching agreement on meaning, and the literature shows that verbal communication is better suited to the latter than the former (Dennis et al., 2008).

And, of course, verbal interactions help to sustain working relationships, especially in repeat-player environments. Our defense attorneys often tend to know their opposing counsel, and that relational value is very real, very beneficial, and supported by negotiation scholarship. (Thompson & Nadler, 2002).

So, I’m a big fan of verbal communication. It’s critical, provided the purpose of it is well understood and deployed at the right time and in the right way. The objective should not be to eliminate verbal negotiation; it should be to sequence it correctly.

In fact, the science says that the optimal model is to write, then talk, and then write:

1. Write first to establish facts, anchors, and rationale (Sweller, 1988; Dennis et al., 2008).
2. Talk second to manage emotion, test understanding, and converge (Thompson & Nadler, 2002).
3. Write again to lock alignment and prevent memory drift (Ebbinghaus, 1885/1913; Walsh & Ungson, 1991).

What Is Written Communication Good At?

Let’s go back to the core determinants in high-stakes negotiation: precision, memory accuracy, evidence evaluation, and persuasion durability.  Said another way, negotiations succeed or fail based on how information is processed, retained, scrutinized and justified across time and across stakeholders.

It turns out that verbal communication isn’t as good at any of those elements. Let’s examine why.

Cognitive Load and Working Memory: Human working memory is pretty limited. Classic and contemporary models show that individuals can actively maintain and manipulate only a small number of informational elements at once (Baddeley, 2000; Cowan, 2001).

Verbal negotiation forces decision-makers to do a lot. They must listen, interpret, remember figures and conditions, and form responses simultaneously. And humans are just not very good at that.

In contrast, written communication externalizes information, allowing cognitive resources to shift from retention to evaluation. This is a core component of cognitive load theory (Sweller, 1988), and exactly what defense teams should want. We don’t want plaintiff attorneys to spend their time trying to remember the points we’re making, we want them to be evaluating the points we’re making.  Written communication enables this deliberative analysis.

Comprehension, Rereading, and Error Detection: The “persistence” of written communication is highly desirable in negotiation. This is because research on communication grounding shows that mutual understanding is easier to establish and verify when participants can refer back to a stable record (Clark & Brennan, 1991). Cognitive load theory further predicts that self-paced review improves comprehension and reduces error with complex facts (Sweller, 1988).

Reading research supports this distinction: comprehension and analytical accuracy improve when readers can control pace, reread passages, and spatially organize information—conditions unavailable in verbal exchange (Myrberg & Wiberg, 2015).

In our world, we want opposing counsel to understand what we’re saying. We want them to understand our perspective, the facts as we see them, and the rationale for our positions. If they do there is a greater chance they will agree with it, or at a minimum be able to articulate where they disagree from our perspective – and that is the essence of a good negotiation. We call that progress in negotiations.

Retention, Retrieval, and Misremembering: If you want to impress your friends, you can mention the Ebbinghaus Forgetting Curve to them. Developed in 1885, it illustrates that humans forget information rapidly — roughly 50% within an hour and 70-90% within a few days – if it is not reviewed. Worse, humans tend to reconstruct from memory, often inaccurately, if they don’t have a stable persistent written document to refer to. (Ebbinghaus, 1885/1913). Even confidently held memories can still be inaccurate (Loftus & Palmer, 1974).

In our world we very much don’t want opposing counsel to forget the primary defense points we’ve just conveyed to them. Or to reconstruct them in an inaccurate way. Yet this is likely to happen when we argue verbally.

Ambiguity Reduction and Precision: We all tend to think of ourselves as clear speakers. Scientifically though, pragmatics research shows that conversational meaning often depends on what we are implying rather than explicitly stating. (Grice, 1975). This whole area of “implicature” has one set of rules in general conversation, but in negotiation it can derail things or worse, foster misunderstandings that surface later.

In contrast, written communication forces the explicit articulation of things critical to later convergence. What do we believe? What is our position? Why is our view of the case value what it is?  Communication grounding theory predicts that such explicitness reduces misunderstanding and downstream conflict (Clark & Brennan, 1991). And we want that reduction.

Accountability, Auditability, and Organizational Alignment: All of us who come from claims management backgrounds understand well that accountability fundamentally changes how people reason. We know that when individuals expect to have to justify their decisions, they engage in more systematic, defensible judgment processes. While this feels a little “Captain Obvious,” the research supports this. (Tetlock, 1985; Lerner & Tetlock, 1999).

The research also supports that written rationales support better organizational memory and alignment. (Walsh & Ungson, 1991)  Said another way, creating the “why” behind decisions helps to ensure that employees across departments have a consistent understand of strategy and goals. Every claim executive who ever wished for more negotiation and valuation “consistency” across their claims unit should take note.

Persuasion Durability and Attitude Change: Most research on the topic of persuasion distinguishes between shallow, cue-based influence and deep, systematic processing. The former can be broadly described as a high-level persuasion that is short-lived and susceptible to counter-arguments. The latter is formed when the person has the cognitive resources to scrutinize the information (assuming they have information to scrutinize).

Attitudes formed via deeper processing are more stable and resistant to counter-persuasion (Petty & Cacioppo, 1986; Chaiken, 1980).  Written information increases the likelihood of systematic process by reducing time pressure, enabling scrutiny, and supporting comparative evaluation. In our world, we want to create a persuasion that lasts beyond the next phone call, deposition, or settlement conference.

Evidence Evaluation and Decision Quality: The concept of accountability and how it affects decision-making has been studied a lot (Lerner & Tetlock, 1999). Some of the key findings in this arena include the fact that, if the person is accountable for the process of deciding (and not just the final outcome) they will rely less on intuition and more on the facts and evidence before them.

Certainly claim professionals understand that they are accountable for process. How did you come to your conclusion, or valuation, or strategy, are common questions in claims organizations. That may account for the importance claims organizations put on the Demand Packages, as they work to analyze, evaluate, and refute each assertion.

But what about plaintiff counsel? They too are accountable – to their client, their malpractice carrier, and their own business partners. Accountability research shows that this structured justification improves evidence use and reduces reliance on intuition. A written document highlighting the risks to them if they are wrong triggers that accountability (and analysis). And this is what we want from plaintiff counsel – an analysis of our written negotiation points, not a gut-feel and entrenched negotiation position.

Anchoring and Negotiation Structure: Perhaps one of the most powerful benefits of written communication vs. verbal is in the area of anchoring. Anchors that persist exert a lot more influence than anchors that have to be restated.

Written communication fixes anchors by making them persistent and reusable across contexts. And, if we’ve ever used anchors, or been anchored ourselves, we know that anchoring is one of the most robust and important findings in all judgement and decision-making research.  (Tversky & Kahneman, 1974).

How To Strengthen Your Claim Department In 2026

This article argues that when one side negotiates primarily through writing and the other primarily through talk, the written side holds the advantage. This is because its communication method aligns with how humans actually decide things. That is science.

The great danger with the plaintiff bar’s adoption of AI is that enables written persuasion (evidence-based advocacy) on a massive scale. It’s not the AI itself that is dangerous; it’s the efficiencies it creates. They are now able to create portable, persistent, written artifacts that work effectively on a massive scale, for all the reasons outlined above.

If, in contrast, defense teams continue to use verbal, episodic, poorly memorialized responses, that danger is maximized.  To respond, claim organizations must be willing to invest internal time, or pay counsel, or adopt defense-centric AI technologies (or all three approaches) and respond in kind.

We must adopt a negotiation architecture that illustrates our understanding of the science behind what persuades decision makers (plaintiff counsel). Writing wins over negotiation “as an art” because it aligns better, both cognitively and organizationally, with high-stakes decision making.

As you examine your own organization’s negotiation practices in 2026, for every claim you settle ask your own team (or your defense counsel), the following question: “What did we provide to opposing counsel that they could process, retain, evaluate, remember, and justify?” If you can’t obtain a good answer to that, you’ve probably over-paid on that negotiation.

Appendix: References (APA Style)

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