Viewpoint: J.S. Held CEO Refutes ‘Claims Surrogate’ Label

William F “Chip” Merlin is both a nationally known and a respected advocate for policyholders who raises timely issues in his blog. In his post, dated Oct. 20, 2020, Mr. Merlin references a McKinsey study predicting a growing outsourcing model for claims. Mr. Merlin raises interesting and important questions, which serve as an excellent reminder of the appropriate role of consultants and adjusters to whom services are outsourced.

First and foremost, I was quoted in your article … “this ain’t no trend,” in reference to the insurance industry’s use of outsourced services. Licensed independent insurance adjusters and expert consultants of various disciplines have been performing work for insurance companies for many decades. They serve a necessary and value-added function that enhances (among other things) both speed and accuracy in the claim evaluation process.

Most importantly, Mr. Merlin’s use of the word “surrogate” presents an unfair depiction of the role of the expert or, in most cases, the role of the independent adjuster, in that it conjures up the notion that these professionals are a substitute for the role of the insurer. This is neither fair, nor accurate.

Indeed, experts do not negotiate claim settlements, nor do they make coverage determinations. They simply provide opinions within their areas of expertise on various topics that help adjusters and insurers settle claims. Moreover, their role is not to reduce indemnity dollars, but rather “deliver the news” to clients in a clear, concise, and unbiased fashion.

However, as I was also quoted in your article, experts do need to “stay in their lane” and not engage in the adjustment of a claim or determination of policy coverage. That work does require a license in almost all states.

It is also unfair to characterize many expert consulting firms as “insurance consulting companies.” Many of these firms, like J.S. Held, serve a broad range of clients in the private and public sector ranging from corporations, law firms, contractors, developers, and yes – insurance companies. They provide a diverse and broad range of expert services to a wide variety of clients. They are not “advocates” on behalf of any particular client. Rather, they are retained as experts seeking to provide clear, unbiased and objective opinions.

Consulting firms pride themselves on the objectivity their teams of experts who offer clients specialized knowledge in various disciplines.