One of the highlights was a visit to Lloyd’s, and an informal tour of the place by a London broker and friend.

Many of us in the industry have heard the story of the earliest recorded use of something like insurance.  According to many sources, ancient Chinese merchants would arrange to divide up their goods amongst themselves when traveling on dangerous rivers.  Each would carry only a portion of his own wares in his boat, along with portions of the other merchants’ commodities, so that if one boat were to sink each businessman would lose only a relatively small part of his possessions.  By sharing the risk among themselves they each had some measure of protection against being totally wiped out by a single disaster.

Most sources also agree that while the concept may have been around much earlier, it was the businessmen associated with Lloyds who perfected the modern business of insurance.

By the late 1600’s London had become a center for trade and shipping worldwide.  It is said that in 1688 Edward Lloyd opened Lloyd’s Coffee House in Tower Street in London, and it became an informal meeting place for the conducting of business transactions.  A merchant with a ship or cargo to insure would retain a “broker” to carry the written details of the risk around to various wealthy businessmen, who would in turn write upon this “slip” the particular percentage of the risk for which each was willing to be responsible.  Each of these “underwriters” wrote his name and agreed percentage below the outline of the voyage until the risk was fully covered.

Eventually over a period of time the process became more formalized among brokers and underwriters, and their gathering place was relocated several times to larger quarters, but the name “Lloyd’s” has remained.

Naturally, today much of the work is done electronically.  Nevertheless, there is a huge amount of tradition that remains.  It was very interesting to visit the main floors where the underwriters sit in their “boxes”, being visited by brokers with new offerings or details of losses on existing accounts.  Some underwriters focus on property or specific casualty risks, while others are involved with specialty areas such as fine arts or even communication satellites, and of course there are still those whose work involves the age old shipping risks.  I was somewhat surprised to see that paper “slips” are still used to record the underwriters and their respective percentages of the risk.

In the middle of the whole bustling place sits the famous Lutine Bell, salvaged from a ship that sank in 1799 (the claim for the lost cargo was insured by and paid in full by Lloyd’s underwriters), and traditionally rung to announce important news, both good and bad.  I understand that it was rung following the terrorist attacks on 9/11/01.

I didn’t have a chance to do much visiting of tourist sites on this London trip, but certainly hope to do more of that next time.  The chance to visit Lloyd’s, and see what truly has to be considered one of the foundations of modern insurance, was one that I hope to do again.

After some discussion with various people I slowly came around to the idea that maybe, for several reasons, there might actually be some relatively worthwhile comments and observations to be made on various topics.

For one thing, our location in the Midwest probably gives us a somewhat unique perspective on the insurance world, and certainly a different view than those on either coast or in larger cities.  Omaha, where I live, has always been home to a number of insurance companies, large self-insureds, and various claims offices.  At one point, according to statistics, Omaha was behind only Hartford in the number of insurance jobs per capita among U.S. cities.

Our role as a TPA, or third party claims administrator, also places us in a position to view the world of insurance and claims somewhat differently than many others in the industry.  A TPA is in many ways something of a hybrid, with characteristics of both an insurance company claim department as well as an independent adjusting firm.  In addition, we handle claims and manage the claims process for a number of different clients, and this tends to give us exposure to various philosophies and approaches to claims.

It was also pointed out to me that in my 35+ years in the claims business I have no doubt, even by accident, picked up a few tidbits of useful knowledge.  My career has taken me from an outside field adjuster, both for independent adjusting companies and large & small insurers, to an inside supervisor of other adjusters, to a claim manager, eventually to Vice President of Claims, and ultimately to opening Criterion Claim Solutions some eight years ago.

Over that time I have been involved with a great many different types of claims, and with the possible exception of large aircraft and large ocean going vessels, I have probably come across most every coverage and claim that might exist at one time or another.  I certainly wouldn’t say that I’m an expert in every category of claim, but have seen plenty of them.  I have been called out in the middle of the night (usually also in the middle of a blizzard) to the scene of truck accidents.  I have reviewed and audited more claim files than I care to remember.  I have helped create and tweak coverage forms and endorsements.  I have conducted due diligence reviews for prospective new programs of various types, and provided my analysis and comments.  I have sat in many large loss committees to decide how catastrophic claims might best be handled.  I have sat through depositions and trials, and seen close up how the legal system actually works.  And in my most recent occupation, I have met with many insurers, brokers, agents, and reinsurers to try and convince them that they should hire our company to handle their claims.

My career has also given me the opportunity to create, build, and manage claims operations of various sizes.  Fairly early in my career I supervised a half dozen adjusters.  Eventually I was promoted to a manager level position with oversight over a number of claim units, and at times a branch claims office with all its issues and challenges.  As the head of an insurance company claim department I was in a position where the various managers, of Property Claims, Auto Claims, General Liability Claims, Workers Compensation Claims, Litigation, Subrogation, as well as support staff reported to me.  This also put me in close regular contact with other company departments such as Underwriting, Regulatory, Special Investigations, and Internal Audit, and the mundane but important issues of Human Resources, supplies, etc.

I was fortunate enough to be with a company which underwent a great deal of growth, and this gave me the opportunity to build up a Claim Department basically from scratch, and make my own choices as to the structure and staffing.  I have had good bosses and miserably bad bosses, with most probably falling somewhere in between, and have tried to learn something from each – even if it might be how not to do something.  I will admit that I’ve made my share of mistakes in hiring (and firing) decisions, in electing when to listen to and when to ignore the advice of others (including superiors), and various other situations along the way.  Hopefully, both from my successes and mistakes along the way have taught me some lessons.

I also worked with various outside claim service providers, including a number of TPA’s, which provided some additional insights and no doubt helped prepare me for perhaps my biggest career challenge – starting Criterion Claim Solutions.  Among other lessons, I have learned that “the buck stops here” is not just an empty saying.

All of these various experiences, both good and bad, have taught me a great deal about the insurance industry, people in general, and specifically the handling and managing of claims. And based on the premise that these experiences may give me certain insights or perspectives on some issues, I have somewhat reluctantly agreed to contribute my thoughts and opinions from time to time.  I certainly don’t have any illusions of supplying any particularly profound headline making epiphanies, but may from time to time be able to offer some humble observations on the nuts and bolts of the claims world.  As we say in the Midwest, even a blind hog finds an acorn once in awhile.