APCIA Says Claims Data Standards in Works to Better Combat Criticism

These days the insurance industry is “caught in the crosshairs,” and it may also be caught flatfooted – responding to recent questions of a policy’s worth rather than working from in front with appropriate data.

In Boston at the American Property Casualty Insurance Association (APCIA)’s annual meeting, board chair David Bell said the industry has succumbed to what has been dubbed the “horseshow effect.”

“The far left and the far right have come together in this horseshoe effect,” he told the record number of registrants at the conference on the even of midterm elections. “We find ourselves at the intersection of left and right wing populism, where complicated questions like what percentage of claims are denied without payment are reduced to [make the industry] easy villains. Outrage can travel faster than truth.”

Bell, president and CEO of ALPS Corp., referenced recent reports from the Wall Street Journal on auto and homeowners claims. The publication said its analysis found an alarming amount of claims go unpaid. Two senators followed up the reports by sending letters to some of the largest insurers, asking for claims data.

Related: Warren, Hawley Press Insurers Over Closed, Unpaid Claims | Industry Reacts to Senators’ Letter for Claims Data and Recent Reports

“When provocative headlines suggest that getting an insurance claim paid is essentially a coin flip, our industry must be able to respond with clear, credible and unambiguous facts,” Bell said. “Claims are closed without payment for a variety of reasons other than a coverage denial.”

However, the industry isn’t prepared to swiftly respond because it does not have consistent definitions and standardized coding to prevent different outcomes from being grouped together in an alarming headline-grabbing statistic.

Bell said APCIA is developing a standardized claims-closed data-call template.

“If we do not bring consistency to how claim outcomes are categorized, then we will remain on the defensive against narratives that the underlying data simply does not support,” he said.

However, to add credibility, the industry must acknowledge when its members do not meet standards, he added. Bell said, “Defending the industry does not mean defending every action taken within the industry, including companies both inside and outside our trade organization.

“When conduct falls short, we need to call it what it is. Otherwise, we risk sacrificing the credibility we need when the industry is being scrutinized unfairly.”

He said APCI is working to bring consensus to defining clear expectations.

“That way we can give vigorous defense to what is right without appearing to excuse what is not,” Bell said.

Topics Claims