Customer service in property claims suffers when the contractor is left out of the settlement process and policy renewals may be in jeopardy because of it.
That’s the word from the top executive of one of the world’s largest disaster recovery and property restoration services firms.
In a property loss, contractors are the customer service providers. They spend more time on the loss and more time with the customers than anyone else involved in the process, according to Sheldon Yellen, CEO of BELFOR Property Restoration.
And the claimant, ultimately, is the customer. “He may be a claimant today but tomorrow you want him as a customer,” he said.
Yellen is noted for his unconventional and compassionate management style. (His appearance on the CBS reality program, “Undercover Boss,” resulted in an Emmy nomination for that episode.)
By his own admission, in making business decisions he places more emphasis on the character of the people involved than he does on pure math or traditional business practices.
Preferring to “lead from behind,” in Yellen’s world his employees come first. In that respect he has a lot of people ahead of him. With more than 300 offices in 30 countries around the world, BELFOR Holdings, headquartered in Birmingham, Mich., has an employee force of more than 6,400. Yellen said he hand writes a card to each and every one of them on their birthdays.
In an impassioned presentation at the Entrepreneurial Insurance Symposium (EIS) held in Dallas in September, Yellen apologized in advance to any insurance professionals in the audience to whom his comments might seem overly severe. He then laid out his view of the current state of property insurance claims.
Boiled down, the idea is this: Insurance carriers place great emphasis on cutting costs and promoting their brands, but not enough on actually delivering to their insureds the service for which they paid.
At the time of their greatest stress, on one of the worst days of their lives, insureds need to know that carriers are going to deliver on the promise contained in the insurance contract, he said. But insureds won’t know how that will play out until the insurance contract is put to the test.
Yellen himself pays about $98,000 in premium each year for his houses (three), boats, cars and a motorcycle, but has never filed a claim. Instead he’s always paid out of pocket for any losses. But, he said, not everyone is able to do that.
“I think our industry has lost sight of some very, very valuable things. There’s a disconnect between insurance companies — which are collecting on premiums — and the claims department in that same company,” Yellen said.
Insurance carriers spend millions, maybe hundreds of millions of dollars, to promote their brands and entice consumers to purchase their policies, he said. “And you collect that [premium] check year after year after year. And the guy writing that check has no idea what he’s paying for. He has no clue what you’re going to do in the event of a claim. I’m going to argue neither do you.”
Acknowledging that he probably cost himself a fortune in lost business with that comment, Yellen said carriers would be better served and more apt to secure renewals from their customers if they forge partnerships with the contractors working the job.
While contractors were part of the process when Yellen started in the business 30 years ago, that’s not always the case today. Now, whether it’s a company adjuster, an independent, a consultant or a third-party administrator, “those parties exclude the contractor and that’s crazy because we can provide you that great customer service,” Yellen said in a follow-up interview with Insurance Journal.
“I’m saying no matter who you are you have to include your contractor in the report in the meetings, in the discussion. Because he knows or she knows what’s going on. … [You] need to include the contractor as part of the team involved in the meetings, involved in the written report. You should welcome a contractor’s perspective,” he said.
Yellen said his observations are not about himself or his company, that it doesn’t matter which contractor is hired, this is what’s going on in the industry.
BELFOR works on “96,000 jobs a year. We get to the site the day [the loss] happens. If it’s a Friday, I assure you, as an insured, you will not see your adjuster on Friday. I’d be willing to bet you won’t see him on Saturday and you won’t see him on Sunday,” Yellen told the EIS audience.
Monday’s probably a wash too, he said. Then, five days after the loss occurred, the consultant shows up and starts arguing about pricing. “They don’t care what was done; they just want to make it cheaper.”
In his experience, the prevailing industry focus is clearly not customer service. He cited as an example a $14 million loss that he worked.
“I’m out there for five days before adjuster shows up,” he said. “The adjuster shows up, he’s the guy with the checkbook, so he’s obviously the big gun in the room. … I’m just the lowly contractor, but I’ve been with the insured for five days before the adjuster got there. He goes and has a private meeting with the insured, because it’s not my business. …
“The adjuster, the first thing he says to the insured — this is what the insured said to me — the first thing he says to the insured is, ‘come on, I’ve got a 4:15 flight out of here.’ Think about it, the guy’s been paying a premium for all these years, finally had a loss, you get a chance to deliver on your promise and the first thing your adjuster says is, ‘I’ve got 4:15 flight out of here.’ The guy’s sitting on a $14 million loss. That’s absurd.”
The bottom line is, to secure renewals from your customers, you have to give the best customer service you can, he said, and your contractors can help.
“If you want those renewals, you’ve got to partner with your contractors. Again, if you choose not to use us, partner with somebody because they’re with your insured more than anybody else,” Yellen said. “I’m sorry if I’ve offended anybody but I believe it to be true.”
Agents and Brokers
Agents and brokers often are not involved in the claims process either but they should be, Yellen said. Again, it’s all about customer service and increasing the likelihood of policy renewal.
“I know if I were an agent or I were a broker and one of my insureds had a loss I would surely want to be part of that process of providing them that great customer service,” Yellen told Insurance Journal. “And in the event there was any problem I want to be involved right from the beginning so I can help resolve whatever issue arises. I wouldn’t want to find out about it when I … go collect the renewal premium and the guy says to me, ‘oh no, I had a bad claim experience, I’m moving on.’ I wouldn’t want to find out about it then.”
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