Group Captive Program
The captive program was rapidly expanding during extremely soft market conditions. A great safety and loss control program had been developed and the policy holders were happy. The Captive was facing some challenges in one area– claim administration. They had partnered with a large national third party administrator (TPA) to provide these services. Initially, the captive was thrilled with the capabilities that the TPA had to offer. However, they quickly realized that the TPA suffered from staggering levels of employee turnover. Their dedicated adjuster changed four times within the first year. The captive results began to deteriorate rapidly due to poor claim handling and general neglect of the claim files.
The program manager decided to transition their claims away from the TPA, contacting their fronting carrier to inquired about a list of approved TPA’s. We were contacted and ultimately agreed to take on the clean-up project and the on-going claim administration for the program.
Aware that the claims that we were about to inherit were going to be in poor condition, Athens brought together a powerhouse team and moved forward with a formal action plan to assure that no time was lost during the program transition. We immediately attacked the claim files, assessing each individual claim. Major items the team looked for during the takeover initiative included:
Reserve adequacy – Inadequate reserves are a typical side effect of weak claim handling. Confirmation of reserve amounts was a crucial step. We knew that once we could validate the reserves the Captive manager would once again be in a position to confidently make decisions about reinsurance levels, collateral and the general condition of the program.
Confirm that all claims were current – That benefit payments had been being made on time and that all diary events had been satisfied.
Claim closures – Often when there is heavy turnover or inadequate staffing on a program one of the first things to suffer is closing ratios. It is not uncommon to take over a program and to immediately be able to accomplish significant levels of closures.
Simultaneously with the takeover initiative, Athens also began converting all of the legacy paper claim files into paperless files using our AthenScan system. Once completed the paperless conversion allowed for greater day to day efficiencies in handling the claims.
Beyond attacking the takeover claims, we also established definitive claim handling guidelines and communication standards for the Athens staff that would be assigned to the program. The goal: to ensure that the Captive manager was comfortable, confident and secure with how their program was being managed.
The program has experienced a number or positive outcomes since the transition:
Staff Consistency – In the year since the program takeover occurred there has been continuity of claim handling staff on the program.
Claim Closures – Athens has been successful in driving down the open indemnity inventory.
Partnership – Athens regularly collaborates with and contributes to the Captives Loss Control program. Regular interaction and partnership between Loss Control and Claims was a major operational goal of the Captive managers for the program.
Improved Confidence and Productivity – The Captive manager is now able to spend more focused time managing and growing the program.