Common performance metrics
Cycle time
- Days from FNOL to closure
- Targets vary by claim type (water 30 days, wind 45 days, etc.)
- Long-running claims flagged for review
Close rate
- Claims closed per period
- Balanced against cycle time
- Encourages closing vs. reopening
Severity variance
- Actual payout vs. reserve
- Under-reserving and over-reserving both penalized
- Creates incentive for reserve accuracy, not customer-friendly payments
Customer satisfaction
- Survey scores from closed claims
- Weight varies by carrier
- Often less weight than financial metrics
Reopened claim rate
- Claims that reopen after closure
- Penalized
- Creates incentive to resolve cleanly (but also to avoid adding scope)
Litigation rate
- Claims that proceed to suit
- Penalized
- Creates incentive to settle before litigation (sometimes favorable to policyholders)
Behavioral implications
Pressure to close
- Pushes toward partial payments with release language
- Pushes toward scope minimization (faster approvals)
- Encourages "final offer" framing
Pressure on reserve accuracy
- Initial reserves may be conservative (easier to raise later than reduce)
- Scope additions trigger reserve review
Customer survey bias
- Adjusters cultivate relationships to game scores
- Policyholder "friendliness" doesn't necessarily mean fair outcomes
Litigation avoidance
- CRN-level threats can trigger settlement
- Not because carrier agrees on merits
- Because litigation exposure is metric-tracked
Strategic implications for policyholders
- Adjuster's urgency to close is not your urgency
- Their "final offer" is often negotiable
- CRN / litigation threats push metric-concerned adjusters
- Relationship-building is useful but not sufficient