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 Posted: Thu Nov 13, 2008 8:03 pm Post subject: WHAT DOES SEVERITY MEAN IN THE MEDICAL AUTO INJ CLAIMS WORLD |
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| If you have a job interview and the question is.. What is severity, and how do you plan to impact it in your role as a manager, what does the word "severity" mean to in this case. I always thought it was how severe/the size of the loss/claim, and I often thought forecasting this helps to determine the amount of premium an insurance company charges. I could not remember this to get the job a week or 2 ago, and now I remember it, but I need to ensure I am correct. Thank you for your assistance. |
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drgbrown2002
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| Posted: Fri Nov 14, 2008 12:05 am Post subject: |
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I'd agree with you. If anyone asked me a question like that, I'd ask them the same question... what do you mean by "severity".
At best I think it's a poorly worded question. If I had to guess, I think they are wondering how you would manage adjusters so that they limit the amount of the claims to what is owed and not inflate the cost of the claim through poor work. |
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tcope
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| Posted: Fri Nov 14, 2008 1:50 am Post subject: |
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The way I've always heard it used in the claims world, (and used it myself) is claims severity...like, adjuster #2's claims severity is greater than adjuster #1's because they have more tenure, yada, yada, and handle more complex higher value claims....Severity also ALWAYS means dollar amount paid or may pay on claims...the question | Quote: | | What is severity, and how do you plan to impact it in your role as a manager |
Would to me mean 'what are you going to do as a manager to keep your severity down or lower'' in other words ''how do you plan to control the claim/severity...or How do you plan to (as a manager) pay less, or reduce the payment on the claims..." That's what I get from it.
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Lori
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| Posted: Fri Nov 14, 2008 4:20 am Post subject: |
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Since nobody asked for my two cents, you're gonna get it anyway.
I would agree with the other posters. I have always associated the word
"severity" with claims environments. Specifically, as previously noted in other posts here, it would be exactly what it sounds like it should be. How "severe" is the loss in terms of dollars and cents in the short, intermediate, and long-term run of the claim?
As opposed to severity, insurers are more concerned with frequency. Hey Lori- ever heard of the "professional claimant?" When I was doing claims, I was doing mostly big commercial losses and storm-trooping, so I didn't see a lot of personal lines stuff unless I was storm-trooping. But on those occasions where I was adjusting homeowner and personal auto claims, I noticed a couple of things after awhile. There were certain clients that seemed to have a lot more claims than others! 
DUHHHHHHHH. Usually automobile comp losses and personal property losses. Then I noticed another thing- these people seemed to typically have a series of small losses that preceded the big loss that I was adjusting!! DUHHHHHHH AGAIN!! Then I decided to bring this amazing piece of discovery to my division manager. Drew up correlaries and theories, had numbers and charts (not really on the charts) and cornered him in his office. He patiently listened to me for about 3 minutes, then said "we've known that for about 200 years." 
He then told me something that for some reason I've never forgotten: "Anyone can have a severe loss. Bad things happen all the time. It's the 'professional claimant" we watch for- they cause us big problems." The data is clear: those insureds who have a series of small losses will likely have a much larger, more severe loss in the future.
That's how I would look at this whole severity thing. For some reason, I just seem to be seriously rambling on tonight. Sorry, ya'll.
InsTeacher  |
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InsTeacher
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| Posted: Fri Nov 14, 2008 10:56 am Post subject: |
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| Quote: | | The way I've always heard it used in the claims world, (and used it myself) is claims severity...like, adjuster #2's claims severity is greater than adjuster #1's because they have more tenure |
So, by the term severity they were actually referring to the intensity and complexity f the claim, or they were referring only to complexity and not intensity of the claim.
| Quote: | | Hey Lori- ever heard of the "professional claimant?" |
hmmm....that sounds interesting.....or shall we call them "fraudsters".
~Jeremy |
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JeremyHolter
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| Posted: Fri Nov 14, 2008 12:42 pm Post subject: |
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| Quote: | | Hey Lori- ever heard of the "professional claimant?" |
Yep, I'm VERY familar with the term...and could name about four off the top of my head...  | Quote: | | Then I noticed another thing- these people seemed to typically have a series of small losses that preceded the big loss that I was adjusting |
Testing the water. professional claimants that is....somewhere I read that (and I'm sure my numbers aren't 100% accurate, but close) that 30% of the people have 80% of the claims...this is not to be confused with the pro-claimant, who typically, leans toward injury claims...just those people that are either very very unlucky or more than likely just bad drivers... 
| Quote: | | So, by the term severity they were actually referring to the intensity and complexity f the claim, or they were referring only to complexity and not intensity of the claim |
IMO it's both intesity, complesity, AND monetary value..
| Quote: | | For some reason, I just seem to be seriously rambling on tonight. Sorry, ya'll. |
Nope, your posts are always a pleasure to read...
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Lori
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| Posted: Fri Nov 14, 2008 6:51 pm Post subject: |
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Claim severity is the size of the loss, measured by the average amount.
If you are an appraiser you severity could be the amount your settled claims on losses compared to the average claim paid. Hence, Joe adjuster, your severity is high, you need to find a way to bring your estimates for which claims are paid in line with our parameters, your giving too much of the company's stockholders money away.
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