Masterclass on Claims Best Practice Page 1 Introduction Masterclass on Claims Best Practice Welcome to this Masterclass on Claims Best Practice training module. This course is designed to bring clarity on what should be provided as part of the first advice. It will increase your awareness of when ECF transactions should be queried and best practice, and improve your overall effectiveness when using ECF. Your learning objectives in this course are to: Explain the importance of transactions being right first time and the impact of reducing cycle times Describe the key areas of best practice for handling claims via ECF Appreciate the need for good communication between all parties Select each icon above to learn how to use this course To complete this course, you will need to pass an assessment at the end, and make an affirmation that you will comply with the Company's Claims Best Practice policy and associated guidelines and procedures. This course should take approximately 30 minutes to complete. 1. To navigate through the course, select the Next and Back arrows 2. If a page has an exercise, the Next arrow will not appear until you have completed the exercise 3. After passing the assessment, you must select Next to make the affirmation to complete the course 4. Don't worry if you get interrupted and close the course before completing it, as you'll automatically resume at the point where you left off when you access the course next
If you experience difficulty in using a mouse or would like to use a screen reader, select the accessible mode now or at any point in the course from the link at the bottom of the page. Page 2 Introducing Electronic Claim Files (ECF) Since 2014, the claims community has been focussing on improving customer service by leveraging the benefits associated with increased speed and promoting greater communication between the agreement parties and the end client. While ECF has certainly revolutionised the claims process, it's clear from carriers and brokers that we need to do more to address inconsistencies, namely: There's a lack of awareness of process or system functionality, which sometimes causes work arounds that don't align with best practice, and leads to a higher level of queries or the re-querying of the same claim or transaction. Page 3 Examples Look at these examples: When Rob, a broker, used the wrong UMR/OSND, it was then changed mid-cycle.
The claims adjuster, Helen, rejects a claim after noticing that the AP signing is missing. There's no documentation accompanying her next claim, so she queries it on the system. Across the desk, Ahmed's reserve includes fees, so he adds this note, *Includes fees, in the narrative without any indication of how much of the reserve should be apportioned to fees. Marcia is wrongly identified as the lead carrier on the claim notification, so she raises a query on the system.
Page 4 Examples: Is there anything wrong here? When Rob, a broker, used the wrong UMR/OSND, it was then changed mid-cycle. The claims adjuster, Helen, rejects a claim after noticing that the AP signing is missing. There's no documentation accompanying her next claim, so she queries it on the system. Across the desk, Ahmed's reserve includes fees, so he adds this note, *Includes fees, in the narrative without any indication of how much of the reserve should be apportioned to fees. Marcia is wrongly identified as the lead carrier on the claim notification, so she raises a query on the system.
Is there anything wrong here? All these cases illustrate the sorts of inefficiencies we encounter and how unnecessary querying can cause delays and hold claims up. Page 5 You make the call: The impact of querying It may only take a second to query a claim, but how long do you think this adds to the lifecycle of the claim? Exercise 1. When a transaction is queried, how long on average do you think this adds to the lifecycle? Select an option to proceed 1. 3 days 2. 7 days 3. 14 days 4. 20 days 5. 40 days Solution Exercise 1: 5 Page 6 Queries = Delays In fact, when a transaction is queried, it adds an average of 40 days to the lifecycle. Here's an example of the impact... Transaction Queried Y/N? Time taken to complete Time if not Queried Transaction 1 N 6.9 6.9
Transaction 2 Y 41.4 6.9 Transaction 3 N 6.9 6.9 Transaction 4 Y 41.4 6.9 Transaction 5 N 6.9 6.9 Total 103 34 And it's a similar picture across most business classes... Q4 2015 Q4 2017 Class of Business (10) Queried Non- Queried Average Days Queried Non- Queried Average Days Accident & Health 28.3 4.9 7.0 41.0 6.6 8.9 Aviation 26.3 5.6 9.5 34.6 7.3 11.9 Casualty 41.3 6.1 8.0 46.6 7.1 8.7 Casualty Treaty 76.4 4.5 8.2 48.2 6.0 7.6 Energy 43.2 7.4 10.3 44.1 8.0 10.6 Marine 37.0 5.5 8.6 33.8 6.7 8.8 Other Speciality Not Reported in 2015 45.6 7.2 10.3 Property (D&F) 28.8 5.4 6.8 37.5 6.9 8.5 Property Treaty 42.3 4.1 6.9 35.7 5.8 8.1 Page 7 What does this mean for me? "What does this mean for me?" There are four key actions you should take: 1. Be clear about what to provide as first advice 2. Make sure you know when to query an ECF transaction and when not to
3. Improve the Narrative 4. Improve communication A simple phone call or email can prevent further delays! Carriers can do this by: Adding questions within comments if an immediate response isn't needed to progress the claim Calling to request information, allowing 24 hours to respond Brokers, in turn, remember to read and respond to questions and comments left by carriers! We have a good system already, but it can be made even better if communication is improved between all parties While this module focuses on online entry of claims using the ECF system, many of the same best-practice principles and quality concepts apply equally to other systems, such as the batch process and Writeback. Remember that communication is key. Don't be afraid to pick up the phone and talk to the person before you in the chain, rather than querying. There is a better way! Page 8 Claim Notification: Brokers Meet Rob - he is a broker for Newham Insurance Brokers. He is entering his claim on ECF. "I have the information and documents right here..." "This is the input screen, right?"
Exercise 2. What is the first action Rob should take to get started? Select an option to proceed 1. Confirm the reserve is correct 2. Make sure he has the right UMR or OSND 3. Check the AP signing 4. None of the above Solution Exercise 2: 2 Page 9 Using the right UCR Rob's unsure of the UCR, so he asks his colleagues for some advice. Here's what they say: Ava: "It's not a big deal. You can easily change that later mid-lifecycle." Carl: "It's OK to recycle UCRs. Everyone does it." Hamza: "Duplicate UCRs create problems and cause a lot of re-work down the line to correct for all parties." Deborah: "Using the wrong UMR or OSND is likely to delay the claim and potentially the settlement to the client, so it's best to get it right." Exercise 3. Who's right? Select an option to proceed 1. Only Ava 2. Ava and Carl
3. Hamza and Deborah 4. Everyone, except Carl 5. None of them Solution Exercise 3: 3 Page 10 Checking the AP signing Next, Rob needs to make sure the signing is correct - not just that it's the right policy, but it's the right section as well, as this has an impact on what regulatory codes are applied. Missing AP signing information is a common query. It is vital to provide this as soon as it is available in the narrative. If it isn't provided by the time a settlement request is made, the transaction will have to be queried, which will delay settlement and create re-work. If the broker does not check the AP signing at the time of entry, then the carriers should query if it is not correct, which can further delay the cycle. Also watch out for orders: Check exactly how XIS have signed the risk, particularly for small orders. For example, have they signed it '100% order with 5% line' or '5% order with 100% line'? - as reserves need to be entered at order level. Page 11 Claim Receipt: Carriers Rob's claim has been picked up by the carrier - it's now with Helen, the claims adjuster. "As the leader, it's my job to check that the right signing is used on every transaction"
If you don't check that the right signing is used and pass it to XCS to process, it will cause delays, post lead queries and be a chargeable correction. Select the tabs shown to learn more before you proceed Different signings for different codes There may be signings for different risk codes. There could also be different signings in a single risk code due to different regulatory codings. It is therefore very important that you know how to recognise which signing is correct, either in your own premium system or via the signings section in the UMR area of ECF. FDO signing For Lloyd's, the difference will often be the FIL code, which indicates which country the risk relates to - so an aircraft registered in the UK will have a UK FIL coding, but an aircraft registered in the US will have a US coding. Some countries are not interested in specific reporting, so generic signings can be used for those. If it's an FDO signing, the broker must provide the AP signing as soon as possible but with the settlement request at the latest. What if the lead is incorrect? The lead is selected by the broker. If the wrong lead is selected, and this is not detected early, it can cause delays and re-work for all parties. It might be that the slip actually has different leaders for different sections or the first carrier on the slip is not actually the leader. If the transaction arrives with you as the carrier incorrectly: Ring the broker and ask them to correct it and re-release it (if it's a subsequent advice or the transaction has been authorised, the broker will need to cancel and replace) That should remove it from your to-do list going forward
In relation to the second lead for CTP, it is up to the first lead to correctly identify the second lead and tick them on the response screen. LIRMA When a claim is circulated, it feeds into the following markets systems. If you circulate and any facts or figures are wrong or missing, the transaction cannot be undone (including by the broker) and may need cancelling and replacing to rectify, creating additional work for all parties and slowing down the claim. So best practice is - do not circulate until you're happy with the presentation. Page 12 Scenario: Incorrect lead "Wait a minute... Surely the broker has made a mistake. We're not the lead." Exercise 4. What action should Marcia take in this situation? Select an option to proceed 1. Correct it herself in the system 2. Ring the broker and ask them to correct it and re-release it 3. Add a query on the system about it 4. It's not serious - it can be corrected later Solution Exercise 4: 2 If the wrong lead is selected, and this is not detected early, it can cause delays and re-work for all parties. So, if a transaction arrives with you as the carrier incorrectly, you should ring the broker, and ask them to correct it and re-release it. If it's a subsequent advice or the transaction has been authorised, the broker will need to cancel and replace it. That should remove it from your to-do list going forward.
Exercise 5. Anne checks the slip and notices that there is a second lead for CTP. What should she do in this situation? Select an option to proceed 1. Raise a query in the system 2. Refer the matter back to the broker 3. Identify the second lead and tick them on the response screen 4. Ignore it - it's not serious as long as the second lead is shown, then it's alright Solution Exercise 5: 3 In relation to the second lead for CTP, it is up to the first lead to correctly identify the second lead and tick them on the response screen. Page 13 Handling reserves Handling reserves Whether you're a broker or carrier, it's crucial that reserves are entered and handled correctly in ECF.
Page 14 Reserves: Brokers' duties Brokers have three currency streams, but there is only one field into which to enter reserves. If there is an indemnity and expense reserve to enter, the broker must clearly explain what those splits actually are in the broker narrative box. Example: Page 15 If Rob wants to present a reserve in one currency that is for both indemnity and fees, he should use the narrative field to indicate how that number should actually be split. Reserves: A Carrier's perspective "It's my responsibility, as lead, to ensure accurate capture of the claim reserve" Exercise 6. "Rob has indicated on a Lloyd's lead claim that his reserve also includes fees" "OK, that should be enough to prompt XCS to split the reserve" Is Helen right about that?
Select an option to proceed 1. Yes, as there are other fields which clarify this later 2. No, Helen should provide further instructions in the leader reserve box and/or private comments 3. No, Helen should query this in the system 4. Not sure - it's the broker's responsibility to get this right Solution Exercise 6: 2 If Helen wants to increase the reserve (either for indemnity or for experts particularly because they want to add coverage fee reserves), then it's vital that she provides clear narrative in the Private Comments to instruct XCS how to present the reserves in the system. Exercise 7. Across the desk, Ahmed wants to positively instruct XCS to carry a nil reserve on his Lloyd's claim. How should he do so? Select all that apply and then Submit 1. By raising a query in the system 2. By entering a '0' in the relevant Lead Reserve field 3. By entering a '1' in the relevant Lead Reserve field in ECF 4. By adding supporting narrative within Private Comments 5. By phoning ahead to XCS Solution Exercise 7: 3,4 It is vital to provide clear narrative in the Private Comments to instruct XCS how to present the reserves in the system. Ahmed should enter a '1' in the Lead Reserve field and also add supporting narrative in Private Comments. The lead reserve fields are not visible to the broker, nor are they editable by non-agreement parties. They should be reviewed on each transaction, as the previous financials remain until the lead requests an update.
Page 16 Scenario: Incorrect reserve Back to Rob's claim... Helen has noticed that the applied reserve is incorrect. Exercise 8. What should she do about this? Select the correct option and then Submit 1. Give Rob a call, request an amendment and re-release 2. Add comment for broker to change on next transaction as it s not important that it's correct straight away 3. Ignore it and let XCS pick it up at the next stage 4. Add a query to it in ECF Solution Exercise 8: 1 Remember that querying because a reserve has not been entered by the broker should be a last resort. Xchanging will enter the reserve based on the leader's instructions and so if the reserve hasn't been entered by the broker, this does not need to hold up the process. LIRMA: If an amendment is required to a reserve - for instance, the broker entered a nil reserve but the Adjuster wants the quantum from the Adjuster's report - call or email the broker to get it amended. Do not circulate until it is correct otherwise the follow markets will have the wrong reserve in their systems! Page 17 Multiple Currencies Once a currency has been advised, you'll need to ensure that all subsequent transactions contain that currency, even if the financial position of that currency hasn't changed or is now nil.
It has been identified that brokers will not be prompted to update a NIL reserve - see example below: Screen 1 - Claim Enquiry shows the NIL reserve in GBP currency Screen 2 - Claim Data Entry: the GBP currency is not prompted It is important to always update all currency streams on each transaction, even if there isn't a movement - otherwise they can't be seen by the agreement parties in ECF. Brokers need to be mindful that they won't be prompted to update if the reserve for that currency is NIL so it is best practice to always check first! Where this information is missing, multi-currency entries can go "out of sync", leading to a higher volume of static entries and an increased administrative burden for brokers and carriers Page 18 Reserves - Parallel UCR's Where the Fee Collection Agent needs to advise reserves relating to any outstanding fees, they should include these in the parallel ECF transaction The Fee Collection Agent parallel UCR should not include any indemnity reserves or payments Carriers or their service providers will need to ensure that any reserve amounts loaded to a parallel UCR do not duplicate reserves already held on the broker UCR
Page 19 Using the Broker Narrative: Best practice tips Use the Broker Narrative to provide as much detail as possible about the transaction. This may include, but is not limited to: Any reserve splits An update on any outstanding queries or questions: Either by adding the response; or Providing the Claims Adjuster with an update on the status of the information being sought AP signings, if required If AP signings are required, this is where the broker should add them. Failure to add them by the time a settlement request is sent will result in delays. Remember - put into a narrative field what you would have told the carrier had you been physically broking the claim to them. Page 20 Best Practice: Documents and Brokers The most common reason for queries across the market is missing or incorrect documents.
Here is a list of dos and don'ts that you should follow to reduce these types of queries: Always check that you have provided all the required documents to enable the claim to be adjusted and processed. Do Ensure all required documents are added to the claim - including nonpremium endorsements, which often aren't added by placing teams Always link documents to a transaction Check the SP&P to ensure the document is in the accepted format - most formats are now OK including emails, as well as those with embedded attachments Remember that documents embedded in emails will be split out for the first level only Set up all transactions with documents, even closures - as Xchanging will query if there are no documents Check if a reinstatement premium is required If handling reinstatement premiums, put the premium documents at both the UMR level and also with the claims transaction When adding documents to a partially authorised transaction, re-release the transaction or for LIRMA email carriers that the document has been loaded. Don't Never load documents larger than 20 MB Never submit any transaction (even closing advices) without supporting documents NEVER add documents to an authorised transaction Remember that for batch loaders, the documents can take up to 24 hours to appear. Carriers should be mindful of this and allow time for the documents to arrive and not query too quickly.
To avoid further re-work when handling reinstatement premiums, put the premium/reinstatement documents at both the UMR and UCR/TR level (with the claims transaction). Otherwise, add a clear message in the broker narrative pointing the Claims Adjuster to the UMR area. Page 21 Scenario: Rob's transaction Rob's transaction has been partially authorised, but wait... "I've been asked by the second lead for an additional document" Exercise 9. Which of the following statements are True? Select all that apply and then Submit 1. He needs to add the document as requested 2. 3. He should send the document via a separate email or fax it to the second lead He should re-release the transaction so the leader should also see that document 4. He should add a query in the system 5. Under no circumstances should he add additional documents to partially authorised transactions Solution Exercise 9: 1,3 Failure to re-release the transaction - if an additional document has been added - means that the lead can miss vital information and this will delay providing a suitable response to the client. Page 22 Best Practice: Documents and Carriers In most cases, missing document queries can be easily resolved. A valid transaction on ECF requires both a CLASS entry and supporting documents.
By taking action now, you can speed up the claim lifecycle, reduce re-work and, most importantly, get the client's claims paid quicker. So what should you do if, as leader, you notice that documents are missing? Ring the broker Get them to add the documents A document must be added to every transaction. Does it need to be re-released? For Lloyd s, if the transaction hasn't been authorised by the lead, it does not need to be re-released. Re-releasing must definitely be done if the second or XCS have identified a missing document to ensure that the leader reviews this information. Page 23 Scenario: Helen's response Helen has a dilemma... She is reviewing the claim on day 1 and Rob, the broker, has made reference to two documents, which Helen can't see. Exercise 10. What's the best way of handling this? Select an option to proceed 1. She should add a query to the system 2. It's best to let XCS deal with it 3. She should contact Rob by email or phone 4. She should wait 24 hours before doing anything Solution Exercise 10: 4
There can be a time lag of up to 24 hours between a CLASS entry being released by the batch system and the documents catching up - so super-keen leaders should be careful not to query for lack of documents, as they might just be enroute. By doing this, it delays the process even more, as the broker has to rerelease the transaction again. Page 24 Scenario: Helen's response Exercise 11. Helen has asked for another document to adjust the claim that is not material to this transaction. What is the best way of doing this? Select an option to proceed 1. Query the transaction 2. Accept the transaction as is and request the additional document be presented on a subsequent transaction Solution Exercise 11: 2 Helen needs to ascertain whether the document is material to the transaction presented (i.e. a payment). If it's not, she may be able to proceed as is and add the additional document on a subsequent transaction. Page 25 Lloyd's Qualifier Codes Meanwhile Ahmed is processing the claim with a nil reserve. A qualifier code must be added to any currency entry with a nil reserve. Don't forget that they apply at currency level. It's important to note that the broker has different codes to the leader.
Lloyd's Qualifier Codes Code Description Code Description M First Advice, Await Adjuster's Report A Await Advice from Cedant/Insured/Coverholder L Long Tail Advice R Recovery P Precautionary Advice on High Layers S Subrogation U Uber Precautionary X Erroneous Entry to be Closed C Closed It is the leader's responsibility to give XCS clear instructions in the Private Comments on each transaction as to which code to enter. Failure to do so will mean delays whilst the leader is contacted (and possibly rejected if a response isn't received within 48 hours). Outstanding qualifier codes apply to each currency entry, so if you have a costs reserve in one currency with a reserve, but an indemnity entry in a different currency with a nil reserve, the indemnity entry still requires a code! Page 26 Common Queries: Settlements Queries and delays can also arise due to incorrect or missing financials, which can prevent settlement. Let's look at common pitfalls and how to avoid them... Incorrect settlement amount? If the settlement amount is incorrect, call or email the broker to get it amended. This will substantially reduce re-work and speed up the transaction for the end client. If this fails, the only option is to query, but note that by querying, you will add, on average, another 40 days to the lifecycle of the claim.
Split settlements? Remember to split settlements between indemnity and any fees. Multiple experts? If there are multiple experts on the claim, the leader should make clear which expert the fee payment is for (or experts if it is a combined payment). Page 27 Summary Here's a reminder of your responsibilities in relation to ECF: Brokers Provide full information as early as possible Take care over signing and provide APs prior to settlement Update all currencies on a claim Make sure documents are sensibly named and attached Read all comments even if the code response is positive Use the narrative to broke the file Claims Adjusters Make sure you check the areas your responsible for as a lead to avoid queries and delays LIRMA: don't circulate until you're happy with the information received Don't hold fee reserves on a master UCR / indemnity reserves on a parallel UCR Give documents time to arrive before querying Queries cause delays! Claims Adjusters don't automatically query a transaction - think about if there is a another way to get what you need and Brokers, respond as quickly as you can!