Q. How long have you been in the insurance industry?
A. I have been involved in the insurance industry for more than 35 years in a variety of positions. You could say I’ve learned the business inside out, from the bottom to the top.
Q. How did your career progress?
A. I got my start in 1958 with Unigard Insurance Company in Tulsa, Oklahoma, as a claims representative and then moved on within the Unigard organization to be a claims manager in Oklahoma City and later in Dallas. Around 1975 I joined Union Standard Insurance Company, which is a member of the W.R. Berkley Company group, as vice president of claims and general claims manager, and later moved on to become executive vice president. In that position I was responsible for marketing, claims and underwriting for the entire company’s standard business.
Q. What was the final position you held prior to becoming an independent consultant?
A. I finished my insurance company career holding the positions of president and CEO of Union Standard Insurance Company and Union Standard Insurance Company of Oklahoma. I was also the attorney-in-fact for Union Standard Lloyds.
Q. When did you earn your CPCU?
A. 1974
Q. What made you choose to go into the independent consulting area?
A. When I left Union Standard it seemed that it was the best route for me to take without moving away from the Dallas area and yet still be able to utilize my experience within the industry. Also, as a coincidence, a friend asked me to do some consulting in this area, which really piqued my interest.
Q. How did you approach and prepare for moving into consulting?
A. Obviously the preparation for the move was my 32 years’ experience in the property/casualty industry. As well as my experience, I hold the CPCU designation, I’m licensed as an adjuster, a risk manager and as a local recording agent. That experience, coupled with the research that I did into the area of consulting, the fact that I had some friends who were involved in consulting, and then meeting Bob Hughes really made me realize that I had the qualifications to step out into the independent consulting field.
Q. Has your background as a former insurance company executive affected whether you have been hired as a consultant?
A. I think it has made a considerable difference because generally legal counsel and other company executives will only retain someone with a good deal of relevant experience. I also think that my varied experience within the industry has led to my consulting on a wide variety of projects, including claims handling, the duty of good faith and fair dealing, bad faith, and agency and company practices.
Q. How many projects have you worked on as an insurance consultant, and how do they break down?
A. I have been retained in somewhere around 100 different jobs that include litigation support, where I have testified in court or at deposition on behalf of both the policyholder and insurance carriers; consulting to a special deputy receiver for a state insurance department; claims audits; agency evaluations and many other types of general insurance consulting. It’s very difficult to break down exactly what types of projects fall into what areas.
Q. Have you been involved in much mediation, and what qualifies you to act as a mediator?
A. I was involved in about two dozen cases a few years back, but I haven’t been involved in very many lately because of a number of factors, including the fact that I got too busy as a consultant. As to what qualifies me to act as a mediator, again it’s my experience and the fact that I have over 40 hours of commercial mediation training. I have also taught two workshops at the Dallas/Fort Worth School of Law, which is now a part of Texas Wesleyan University.
Q. In which direction do you see insurance-based litigation headed in the near future?
A. Nationwide, many state legistatures are passing more and more pro-insurance company legislation which restricts the amount of punitive damages that can be recovered on environmental and bad-faith claims. Because of these legislative changes, the pendulum is swinging back in favor of the insurance company, which means that the number and types of cases being brought against insurers are going to diminish somewhat and the number of frivolous cases will drop significantly. There are still some areas where large punitive damages can be claimed, and some court decisions will also encourage insureds to attempt to sue their insurers. However, these situations are usually cyclical, and very often the pendulum will swing back the other way to counter the often overpowering original swing.
Q. What do you see as the long-term effects of the current litigious climate on the insurance industry?
A. Very simply, the more responsible carriers will get stronger through good management decision-making which means implementing a fair claims handling process and using well-qualified people to staff their claims handling departments. I also think that the policy wording will change dramatically so that policies are easier to understand and leave little room for differences in interpretation.
Q. Has the insurance industry lost the respect of its customers?
A. Absolutely! I have even seen members of the public picketing a local branch of a large national company. Overall, the consumer has lost any respect he or she might have had because of bad claims handling practices and the fact that insurance companies tend not to hire adequately-qualified people to run their claims departments. However, things are changing slowly now that the companies have realized the need to have properly trained claims department employees. It will be some time before the insurance consumer becomes less skeptical as to whether the insurance company will honor its policies and do what it says it will do.
Q. What do you see as the biggest hurdle facing the insurance industry today?
A. The biggest problem the industry has right now is the ability to deliver a product that it stands behind at an adequate rate and to honor and pay claims when it needs to. All too often an insurance company will worry about what the competition is doing rather than satisfying its policyholders or claimants. Many insurance companies tend to be over-concerned with setting competitive rates and then letting their services suffer because of a lack of expertise in other areas that relate to the consumer.
Q. What can the industry do to recover the respect and confidence of the product buyer?
A. Very simply, deliver whatever the contract says it will deliver. Make it as easy as possible for those policyholders with legitimate claims to be satisfied with the service received from the carrier. If all insurers made those simple changes, then the customer might begin to respect the industry again.
Q. Are there any current trends that you see as having a distinct effect on the insurance industry?
A. The huge growth in the number of self-insured programs of workers’ compensation and insureds retaining a greater portion of their risk will have a long-lasting effect on the insurance industry. The more success these types of programs have, the more groups and entities will want to be a part of this kind of insurance. That in itself will cause the industry to look at the way it caters to the needs of the business lost in these areas. There will also be some impact because of the amount of high-deductible programs in those states where it is legal and the increase in true no-fault insurance legislation.
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