Senior Claims Executives Feel Industry Must Grow Talent, Prepare Succession Plans

(Hartford, CT) July 9, 2001 — While the overall
U.S. job market has cooled considerably over the last year, the demand for qualified
insurance claims professionals has never been higher. In fact, the dearth of experienced
claims professionals could reach crisis levels for the industry unless insurers do more to
attract and develop the future claims leaders of their organizations, according to a new
Conning & Company study.

According to Conning’s most recent study,
“Property-Casualty Claims Management: Adjusting to New Realities,” during much
of the 90’s, many insurers sought profitability by bringing in premiums to invest in the
surging capital markets, not through efficiencies in their core services. Thus, insurers
considered their claims departments an operational expense that took a backseat, in terms
of attention, to marketing, sales and asset management. However, this attitude has
recently changed as a weaker investment market has forced insurers to re-focus their
attention on their core operations, including claims management. But, prior cuts in
recruiting and training of new claims adjusters have left many claims departments severely
weakened and overworked.

“There are many experienced professionals at the
executive and senior management level, but not enough people lower down the line who can
be expected to take their place,” said Geri Riley, Assistant Vice President at Conning &
Company and author of the study. “The scarcity of future claims leaders needs to be
addressed immediately. The claims division is the most public part of an insurer and it is
as responsible for retaining customers as it is for minimizing losses.”

Conning attributes some of the fault for the claims labor
shortage to the insurance industry. The industry has not done enough to attract college
graduates to a career in claims. Insurers also need to be more proactive in making
advanced training and educational opportunities available for their claims staffs. Many of
the claims executives interviewed for the Conning study pointed out that there is often no
clearly defined career path for claims professionals and no development plans to prepare
people for positions of increased responsibility.

Runaway litigation has exacerbated the impending crisis of
the shortage of qualified claims professionals in the property casualty sector. Since in
many cases, insurers cannot rely on the courts to put a cap on the size of a claim and
juries have shown a tendency to side with the claimants, their best defense is to maintain
highly experienced claims departments.

The Conning study, “Property-Casualty Claims Management: Adjusting to New
is available from Conning & Company
for $575 by calling toll free (888) 707-1177 or (860) 520-1245. A complete listing of all
Conning Strategic Studies can also be found by visiting the company’s Web site at

About Conning & Company

Conning Corporation, through its subsidiaries,
provides asset management services to insurance companies and institutional investors,
manages private equity funds investing in financial services companies, and conducts
in-depth research on the financial services industry. Conning & Company (member
NASD/SIPC) is located at CityPlace II, 185 Asylum Street, Hartford, CT 06103.

Contact: Anne Steinberg or Brian Kennedy
Kitchen Public Relations
[email protected] or
[email protected]