CaseGlide Hurricane Litigation Strategy Bulletin
Hurricanes presents new opportunities for property and casualty insurers. Just when these departments appeared to be operating on all cylinders, hurricanes throttled almost all of Florida and threated to disrupt all progress.
Strong insurer leadership will demand that their litigation departments form a game plan. Insurance litigation departments will collaborate to identify their priorities: transparency and efficient results. Executives must plan to handle ten times as many cases with the same staff. These executives must identify the priorities. Identify the lower value tasks that can be eliminated. Assume there will be many surprises, and solidify processes to avoid and mitigate these surprises.
Focus on transparency and results. During the AOB litigation crisis, Florida’s homeowners insurance litigation departments recently began excelling at these priorities. It is crucial to maintain that momentum in the face of new challenges arising.
Consider this article a checklist of strategies and tactics with commentary.
- Cost Control: aim for continuing progress towards 25% less than the standard legal fees per case and settlement values.
- Closure Rate: closely monitor your closing percentage. Florida homeowners insurers have become very effective at closing cases, and maintaining that momentum is crucial.
- Executive Reporting: develop a frequent executive reporting program providing clear transparency into litigation.
Below please find the issues that will arise:
Litigation Department Strategies:
Hurricane Irma forces litigation executives to rethink their litigation department. To meet these new demands, litigation executives must prioritize high impact strategies over low value tactics.
Build the Team: most Florida homeowners insurers have already maximized their efforts to build strong claims litigation teams, and these same companies will be competing for these candidates even more now. Nevertheless, now is not the time to let off the gas. The better the team, the better the chance at implementing your company’s strategy.
- Resolve Volume Concerns: in most circumstances, staff will see their caseloads double. Plan the tactics for handling that volume and routine check-ins. The litigation executive should encourage their team to avoid low-value tasks.
- Prepare for New Opponents: new plaintiffs’ attorneys will arise. Plan for effectively handling cases with attorneys inexperienced in this legal area.
- Strategize for Familiar Opponents: top plaintiffs’ attorneys will drastically increase their caseloads. As these attorneys get even less accessible, plan how to be relentless and creative to get their cases closed.
- Lead Defense Law Firm Resource Planning: insurers must now make significant decisions about expanding their internal bandwidth, panel counsel bandwidth, and adding new panel counsel. Caseloads may require insurers to do all three. For existing panel counsel, demand your defense law firms provide you with a plan for their growth and how they intend to maintain quality.
- Develop Case Buckets: Categorize cases. It is easier to have five discussions about one hundred cases each than one discussion per each of the five hundred cases. Bucketing also enables precise reporting on higher priority cases.
- Develop Personnel Pods: along the same lines as “bucketing,” develop personnel pods to handle categories of cases. Pods may specialize by location, overage decision, potential exposure, plaintiffs’ attorney, case type, and other similarly important factors.
Hurricane Claims Tactics:
In addition to the high level strategies, insurers and their litigation executives also have new tactics to consider. A word of caution: the more time spent on the tactics, the less time available to execute the strategies. Here are some of the hurricane tactical issues to consider:
Determine the Impact of Higher Deductibles: higher hurricane deductibles should theoretically limit low severity case litigation. Litigation departments must determine how to handle the application of deductibles to all claims, and especially claims falling below the deductible.
- Quickly Identify Claims Handling Concerns: Hurricane Irma’s size and timing imposed an unparalleled tax on insurers’ claims handling resources. Irma required adjusters to be present throughout Florida, and many of these adjusters were still handling Hurricane Harvey claims. Expect claims handling concerns and ensure early identification of same.
- Prepare for Problematic Lag Claims: the earliest reported claims might be the easiest. Unless another hurricane hits, Hurricane Wilma taught us that these hurricane claims will keep rolling in for years. The later they are reported, the more problematic they get. Insurers should have a clear strategy for these claims.
- Promptly Evaluate Business Decisions on Coverage Issues: on cases with defended coverage, insurers must consider business decisions as soon as possible. Unlike trying to get a juror to sympathize about a common pipe leak unique to a single homeowner, every Floridian juror watched dozens of hours of Hurricane Irma coverage and then experienced the storm. For wind and rain losses, these jurors might have trouble substituting an engineer’s testimony for their own experience.
- Avoid Legal Defense Surprises: one of the biggest fallouts from the AOB litigation crisis was the absence of any significant legal defense. Insurers spent years and tens of millions of dollars learning that fact the hard way, and it set them back years in productivity. Insurers must avoid the legal defense surprises that arise out of Hurricane Irma.
An important note as one considers these tactics: every minute spent on one case requires ignoring thousands of other cases. In other words, the more individual case strategies injected into the litigation process, the less bandwidth to manage all cases. Insurance executives and their litigation leaders must push their teams to do everything they can to pay attention to individual case issues only when necessary.
CaseGlide is in the process of working with insurer clients to support the priorities of transparency and efficiency. CaseGlide will lead the process of Irma-related customizations with its clients. At the early stages, CaseGlide has identified the following efficiency and reporting upgrades:
- Reporting: CaseGlide’s upgrades coming this month include real-time data visuals into all litigation demographics, plaintiffs’ attorneys’ trends, and defense attorney performance. Additionally, the upgrades allow insurers to run reports on all settlement offers, and automatically identify cases with a high potential for settlement. CaseGlide’s Executive Dashboard provides insurers with a top-level glance at their entire litigation portfolio and the cases needing the most attention. With the CaseGlide reports as a foundation, insurers track all key performance indicators, monitor their priority groups of cases, and minimize the effort required to maintain top performance.
- Legal Documents: CaseGlide and its insurers will develop high quality, Hurricane Irma-specific automated Affirmative Defenses, discovery, discovery responses, motions, settlement documents, letters, and motions. Insurers using CaseGlide’s legal document automation features will save tens of millions of dollars in legal fees and endless hours in document administration and review.
- New Fields:
- Irma checkbox: CaseGlide will provide insurers with an Irma checkbox to enable drilldown reporting on Irma claims.
- Hurricane deductible: upon request, CaseGlide will add a hurricane deductible field to the Claim Facts page.
CaseGlide’s efficiency and reporting features are crucial to mitigating the impact of the inevitable increasing caseloads. As we continue to identify our clients’ priorities, we will supplement these customizations.
Litigation Executive’s Priorities:
After Irma, the litigation executive not only needs to drive efficient resolution; they must also continually keep executive management fully updated. Hurricane Irma’s volume will require litigation executives to develop new strategies to maintain the operational momentum they achieved during the AOB crisis.
Ultimately, its Florida. Major challenges will arise and there will be surprises. Florida homeowners insurance litigation executives must rise to the challenge by developing strategies that scale to increased caseloads. Litigation executives must also find a balance between addressing hurricane and claim-specific issues and operating efficiently. CaseGlide provides insurers with the primary tool insurers need to achieve these objectives while caseloads skyrocket.
Insurers would do well to have these conversations now. If they don’t, there could very well be another catastrophe looming.