THE HARTFORD’S CLAIMS OPERATION: A COMPETITIVE … · 2019-10-03 · Auto & Property 700 First Notice of Loss (FNOL) & Operations 400 Auto Litigation Strategic Claims Management

THE HARTFORD’S CLAIMS OPERATION: A COMPETITIVE ADVANTAGE

NOVEMBER 8, 2016

Sabra PurtillSVP, Investor Relations

THE HARTFORD’S CLAIMS OPERATION: A COMPETITIVE ADVANTAGENOVEMBER 8, 2016

Copyright ©2016 by The Hartford. All rights reserved. No part of this document may be reproduced, published or posted without the permission of The Hartford.

Safe Harbor

3

Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about The Hartford’s future results of operations. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ, including those discussed in The Hartford’s news release issued on October 27, 2016, The Hartford’s Quarterly Reports on Form 10-Q, The Hartford’s 2015 Annual Report on Form 10-K, and other filings we make with the U.S. Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today’s date.

From time to time, The Hartford may use its website to disseminate material company information. Financial and other important information regarding The Hartford is routinely accessible through and posted on our website at https://ir.thehartford.com. In addition, you may automatically receive email alerts and other information about The Hartford when you enroll your email address by visiting the “Email Alerts” section at https://ir.thehartford.com.

Doug ElliotPresident



Agenda

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Hartford Claims Overview John Kinney

Claims Data Lifecycle Michael Kearney, Paul Drennan, Paula Beland

Workers’ Compensation Mary Nasenbenny, Dr. Marcos Iglesias

Customer Loyalty John Kinney

First Notice of Loss Vicky Pace, Irene Herrera

Tour Stops In groups, rotate through office

Q&A All

TALENT | DATA | EXECUTION

John Kinney EVP, Chief Claim Officer



The Hartford Claims Advantage

7

Our talent, data and execution strategy enables us to restore customers’ lives while driving profitable growth for the companyThe Hartford’s Claims organization is a true differentiator for the company.

1

We are harnessing the power of big dataOur technology and analytics solutions provide actionable insights to support accurate decisions and better outcomes. Our data scientists have built the machines that make it possible.

2

Our unique organization design drives resultsOur innovative structure, including combined Workers’ Compensation and Group Benefits units, enables us to leverage synergies and learnings to improve outcomes and accelerate continuous improvements.

3

Our people are our competitive advantage The talent we have is key to restoring customer lives and driving profitable company growth. We have a unique approach to recruiting, training and retention that builds capabilities and fuels employee engagement.

4


Expense Flexibility, But Also Focused On Accurate Outcomes

8

Workers Comp19%

Group Benefits

29%

Auto27%

Property9%

Liability12%

P&C Other Ops3% Other

1%Workers Comp12%

Group Benefits

26%

Auto45%

Property14%

Liability3%

Annual Claims Volume

(1.1M)

2015 Claims

Payments($8.3B)


Our Unique Business Mix Demands Unique Acumen

9

Workers’ Comp36%

Group Benefits26%

Auto 9%

Property2%

Liability15%

P&C Other Ops12%

2015 Year-End Reserves

($24B)

Using expertise to thoughtfully inform reserves

and effectively manage short- and long-tail claims


Our National Reach With Deep Local Connections Enables Market-Specific Knowledge And Drives Best Strategy And Decisions

10

TX

IA

LA

KY

TN

MS

IN

AL GA

NH

PA

VA

NC

FL

SC

MA

NJ

HI

OK AR

IL

AK

COCA

OR

NV

WY

UT

AZ NM

SD

NE

KS

MN

MO

WIMI

OH

MEVT

NY

WV

PA

NH

WANDMT

IDCT

NJDE

RI

MD

AUTO/PROPERTYAurora, ILPhoenix, AZSan Antonio, TXWindsor, CT

GENERAL LIABILITYPhoenix, AZWindsor, CT

GROUP BENEFITSBloomington, MNHartford/Windsor, CTLake Mary, FLRancho Cordova, CA

LITIGATIONPhoenix, AZWindsor, CT

WORKERS’ COMPAurora, ILLake Mary, FLRancho Cordova, CASyracuse, NY

THE HARTFORD CLAIMS STAFF IN STATE NO CLAIMS STAFF IN STATE CLAIMS CENTER


Our Team’s Alignment Creates Unique Synergies For Knowledge Sharing, Optimal Outcomes

11

1,800Workers’ Comp

&Group Benefits

1,600Auto & Property

700First

Notice of Loss

(FNOL) &

Operations

400Auto Litigation

Strategic Claims Management &

Liability

1,000Supporting Functions

Legal & Medical

200Subrogation

& Salvage

Total ~5,700 Employees

STAFFING BY BUSINESS SEGMENT* (in full time employees)

*As of August 2016


Bringing It All Together…

12

TALENTDATA EXECUTION

I N S I G H T S

E N G A G E M E N T


Our Unique Approach To Recruiting, Training And Recognizing Our Staff Yields Best In Class Employee Engagement, High Retention

13


I N S I G H T S

E N G A G E M E N T


We’ve Developed A Patented Approach To Upskilling Staff In Key Capabilities

14


Employees Are Recognized Publicly And Digitally In Our Company Directory For Ongoing Reinforcement

15


Key Takeaways - Talent

16

TALENT

• We’re a national carrier with local presence coast to coast

• Our flexible staffing model adjusts to the businesses’ evolving needs

• By harnessing our unique organizational structure, we can craft innovative solutions to the biggest challenges facing our clients

• We’re only as good as our talent. We’ve built a patented world-class platform to attract, train and retain employees best suited for today’s challenges


Our Investments In Systems And Technologies Enable Us To Turn Data Into Actionable Insights That Change Behavior And Drive Better Outcomes

17

DATA EXECUTIONTALENT

I N S I G H T S

E N G A G E M E N T

Michael Kearney VP, Claims CIO

Paul DrennanVP, Data Science

Paula BelandVP, Claims Business Solutions

DATA AND ANALYTICS


Our Claims Data Lifecycle Drives Better Decision Making, Action And Outcomes

19

CLAIMS DATA

LIFECYCLE

CAPTURE

ENR

ICH

DELIVER

AN

ALY

ZE, A

CT

Claims Data Mart (CDM)ECOS* Claims Fraud

Systems

Confirm Quality

Structure

Text Mine

Workflow Integration

PredictiveModels

Reports and Output

Prescribe“what should I do?”

Diagnose“why did it happen?”

Describe“what happened?”

Predict“what might happen?”

*Enterprise Claims Operating System


Our Front Line Leaders Use Data Visualization To Help Drive Outcomes

20


Data + Rules = Consistent Decision Making, Improved Efficiency

21

First Notice of Loss Disability Calculator Guardrails Created • Decisions made/action

taken in seconds vs. days

• Customer needs met

• Right claim to right resource immediately

• State level calculations automated

• Variation reduced

• Process simplified

• Duration decisions informed by 3rd party data

• Preemptive escalations embedded in workflow

• Dashboards alert team leaders


Our Group Benefits Analytics Tool Guides Adjuster Thought Process To Ensure We Capture Every Possible Dollar Of Savings

22

Social Security

Metadata

Policy Provisions

Claim Demographics

Neighboring Claims

• Our adjusters identify ~99% of Social Security offsets

• Our rules engine identifies the other ~1%

• Outcome is many millions of recaptured dollars annually

• Tool is highly dynamic and immediately configurable –without technology spend

Social Security Disability

Offset Example


Predictive Models Unlock Additional Opportunity

23

Identifying subrogation

opportunities to support our

handlers’ work


Our Analytics Help Us Connect The Dots To Fight Fraud

24“Example Equipment” Orange County DA

Illustration shows the alleged network of those indicted by the Orange County Grand Jury. (Photo courtesy of the Orange County D.A.)

Doctor

Chiropractor

Leader

Pharmacy

Staff

Pharmacy

Doctor

DoctorDoctor

Doctor

Doctor

Doctor

Doctor

Doctor

ChiropractorChiropractor

Staff

Chiropractor


Key Takeaways - Data

25

TALENT DATA TALENT

• Our significant investments in systems and technologies enable us to turn data into actionable insights that change behavior and drive better outcomes

• Insights are deeply embedded into our process discipline

• We bring considerable data and analytics muscle to counter fraud and are planning future investments to stay one step ahead


Bringing It All Together…

26


I N S I G H T S

E N G A G E M E N T

Mary NasenbennySVP, Workers’ Compensation & Group Benefits Claims

Marcos IglesiasMD, VP, Medical Director

WORKERS’ COMPENSATION CLAIMS: INDUSTRY-LEADING CAPABILITIES DRIVE SUPERIOR OUTCOMES


Our Innovative Programs Proactively Combat Emerging Sociocultural Challenges And Trends

28

0%

10%

20%

30%

2000 2010 2020(Projected)

Obesity Impact on SeverityU.S. Workforce, Age 55+


94%

6%Medical Only

Lost Time

2015 Claim Costs*

29

*Ultimates for Accident Year 2015

27%

73%Medical Only

Lost Time

2015 Claim Counts*

**Permanent Partial Disability

2015 Lost Time*

33%Wages47%

MedicalCosts

20%PPD**

Medical Management and Return To Work Programs Deliver Outstanding Results


Data Drives Decisions And Strategic Interventions

30

MED BILL REVIEW

1. Bill received

2. System reviews• Applies discounts and

fee schedules• Corrects duplicates• Flags and routes

3. Specialist reviews• Reviews for accuracy

and “right-coding” opportunities

• Nurse review advanced medical components

4. Results coordinated with handler and paid

220 clinical medical staff support our

adjusters

CLAIM MANAGEMENT

PPD reviewsaves 9%

Pharmacy programssave 34%

30,000 case mgmt

reviews

Medical programssave 62%

MSA* reviews at 60% savings

90% medical network

penetration

Lien team 98%

success rate

MEDICAL NETWORKS

One million network

medical providers

65,000 network

pharmacies*Medicare set asides


Our Specialized Clinical Units Are Second to None

31

Doctor assignsPPD rating

The Hartford reviews & recommends

Handler resolves claim using accurate PPD info

PPD Review ProcessDoctor may revise rating1

2

3

4

9%PPD Savings

62%Wages

38%PPD


Our Programs Combat Opioid Abuse

32

The country is experiencing an opioid epidemic

Source: Health, National Prescription Audit, years 1997-2013, Data Extracted 2014.

20131999

300% increase in

opioid prescriptions


Excessive Opioid Usage Contributes To Overdose And Does Not Markedly Alleviate Pain

33

Dramatic rise in overdose

deaths

MMWR (Morbidity and Mortality Weekly – CDC) report: Increases in Drug and Opioid Overdose Deaths — United States, 2000–2014. January 1, 2016. http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6450a3.htm


34

• Opioid utilization on The Hartford’s claims dropped by 25%

• Average morphine equivalent dose per claim decreased by 9% on The Hartford’s claims

• From 2014–2015, we’ve reduced opioid usage on our claims at a rate 50% better than industry average

Our Medical Management Strategy Mitigates Potential Opioid Abuse

6,000

7,000

8,000

9,000

10,000

11,000

Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16

Number of Opioid Fills on HIG Workers' Compensation Claims

Number of Opioids Filled


Our Biopsychosocial Model Addresses The Whole Patient And Seeks To Improve Functional Recovery

35

Bio

SocialPsych


Nonmedical Psychosocial Factors Can Delay Recovery: Our Analytics Model Identifies Claimants With Those Factors

Time37

CostDisability

Gap Between Expected and Actual Outcome

Expected Outcome

Actual Outcome


Our iRECOVERSM Program Includes A Continuum Of Interventions Depending Upon Patients’ Particular Circumstances

Claim Handling: Biopsychosocial ApproachClaim Handling: Biopsychosocial Approach

Higher riskLonger disability

No Intervention

No Intervention

App(content)

only

App(content)

only

App plus wearable

device

App plus wearable

device

Cognitive behavioral

therapy (CBT)

Cognitive behavioral

therapy (CBT)

Hartford Coach

Hartford Coach

CBT + physical

therapy (PT)

CBT + physical

therapy (PT)

Abbreviated functional restoration

program

Abbreviated functional restoration

program

Functional restoration

program (FRP)

Functional restoration

program (FRP)

Chronic pain

program

Chronic pain

program

PsychologistPsychologist Counselor + PT

Counselor + PT

MD + psych + PT + others




Nurse Case Mgr + MD

mgmt + FRP

Nurse Case Mgr + MD

mgmt + FRP

Full coaching interventions


38

iRECOVERSM Produces Optimal Results For Our Customers And Injured Workers

“I feel confident going back to work. A good part of this is due to my participation in iRECOVER.”

“Insurance companies get a bad rapthese days and the fact you’ve put this program into play is wonderful.”

“I think what you do, is probably as importantas medical treatment.”


Key Takeaways - Execution

39

• Our workers’ compensation adjusters and clinical staff are experts

• Data is deeply integrated into our decision-making processes

• Unique capabilities drive best-in-class results

John KinneyEVP, Chief Claim Officer

CUSTOMER FEEDBACK DRIVES CONTINUOUS IMPROVEMENT; TALENT DRIVES EXECUTION


Low rating or questionLow rating or question Service alertService alert

Claim supervisor responsible to resolve issue

Claim supervisor responsible to resolve issue

Our Patent-Pending Customer Loyalty Approach Enables Real-Time Continuous Improvement And Exceptional Customer Care

41

When a service alert is issued, our end-of-claim score rises by about 50%

Claim beginsClaim begins Pulse check call to insuredPulse check

call to insuredInvestigation completed

Investigation completed

End-of-claim survey

End-of-claim survey


We Display Our Customer Feedback On Thehartford.com

42

4.8 OUT OF 5 STAR RATING

FROM OUR CUSTOMERS

FOR THEIR CLAIM EXPERIENCE


J.D. Power Awards Our Customer Care And Auto Claims Teams Their Number One Ranking For 2016

43


The Hartford Claims Advantage

44

Our talent, data and execution strategy enables us to restore customers’ lives while driving profitable growth for the companyThe Hartford’s Claims organization is a true differentiator for the company.

1

We are harnessing the power of big dataOur technology and analytics solutions provide actionable insights to support accurate decisions and better outcomes. Our data scientists have built the machines that make it possible.

2

Our unique organization design drives resultsOur innovative structure, including combined Workers’ Compensation and Group Benefits units, enables us to leverage synergies and learnings to improve outcomes and accelerate continuous improvements.

3

Our people are our competitive advantage The talent we have is key to restoring customer lives and driving profitable company growth. We have a unique approach to recruiting, training and retention that builds capabilities and fuels employee engagement.

4

Vicky Pace VP, Claims Solutions & Analytics

CUSTOMER CARE TEAM: FIRST NOTICE OF LOSS


Our Customer Care Team Excels By Blending Empathy And Data To Deliver Exceptional Customer Experiences

46

• 450 customer service reps, 50 leaders• 24/7/365 availability• 6 locations• Omni-channel interactions• Our human face combines with significant system capabilities

o Reflexive questioningo Data capture, fueling predictive analyticso Real time servicingo Customer preferenceso Clinical nurse intake capabilities


Tour Stop Logistics

47

Group Number

Tour Leader First Stop

1 Brendon Kelly, VP Reinsurance Asset Mgmt and Central Recovery Operations

Indoors – General Liability

2 Steve Deane, VP Group Benefits Indoors – Auto and Property

3 Keren Shemesh, AVP Claims Strategy and Innovation

Outside – CAT van

4 Lisa Roche, AVP Claims Solutions and Analytics

Outside – Repair vehicle

A

QUESTIONS


John KinneyExecutive Vice President and Chief Claim Officer

49

As head of The Hartford’s Personal and Commercial Lines Claims organizations, John Kinney leads approximately 5,500 workers’ compensation, automobile, property, general liability, Group Benefits and support claim professionals. The Claims organization’s mission is to deliver exceptional customer service and highest quality claim outcomes. Collaboratively with Claims leaders and across the company, he participates in the design, build and implementation of operational and strategic initiatives that support The Harford’s growth and profitability objectives. In addition, he oversees The Hartford’s property and casualty run-off operations.

Prior to joining The Hartford in 2003, Kinney held various legal positions at The Travelers Companies’ Special Liability Group, where he focused on the management of asbestos litigation. At both Travelers and The Hartford, John has worked closely with state and federal legislators regarding various tort reform initiatives.

Kinney holds a B.A. from Fairfield University in Political Science and a J.D. from Seton Hall University School of Law. He is admitted to practice law in Connecticut.


Paula BelandVice President Claims Business Solutions

50

Paula Beland has leadership accountability for several Claims enabling capabilities including Claims’ Data Office, Strategy and Innovation, and large scale project design and implementation. She also leads Claims’ Customer Experience/Digital strategy. She recently led the transition to ECOS – The Hartford’s new front end claims management system. Her accountabilities extend across Personal, Commercial Lines and Group Benefit Claims functions.

Previous roles include VP of Claims Shared Services, accountable for subrogation, real estate, counter fraud, and call centers that support the P&C lines of business. Before assuming that role, Beland spent over 15 years in Field Claims and has leadership experience in all lines of business.

Over her 30+ year tenure with the Hartford, she has received several Chairman’s Awards and holds several patent applications. She has served as an advisor in a number of industry panels and is a frequent speaker on the topics of technology, and strategy.

Prior to joining The Hartford, Beland worked as an educator. She holds a Bachelor of Science degree from the University of Delaware.


Paul DrennanVice President Data Science

51

Paul Drennan is vice president and predictive analytics lead in the data science unit at The Hartford. In this role, Drennan focuses on marrying world class analytics with deep process knowledge in large scale operations to create sustained profitable changes in business practices.

Drennan joined The Hartford in 2008 as the chief technology officer for Trumbull Services. In that role, Drennan led the design and deployment of a subrogation data warehouse and reporting application using SQL Server. He joined The Hartford’s data science unit in 2010.

With more than 20 years of experience establishing and leading applied analytics teams across multiple industries, Drennan has led operations data science practices at J.P. Morgan Chase, Network Solutions/Verisign and United Healthcare.

Drennan earned a Bachelor of Science in Engineering and History from the U.S. Naval Academy and a Master of Science in Operations Research from the Naval Postgraduate School. Drennan was an officer in the U.S. Navy and served several tours in Operation Desert Storm.


Marcos Iglesias, M.D.Vice President and Claims Medical Director

52

Dr. Marco Iglesias oversees the Claims Medical Strategy group, which focuses on creating innovative medical strategies to drive best outcomes for our customers’ ill and injured workers. His professional interests include the prevention and mitigation of delayed recovery and disability. His passion for helping workers live active, productive and fulfilling lives has led him to develop innovative proprietary comprehensive disability management solutions that focus on early identification of risk factors and appropriate early interventions to return workers to preinjury function.

He has over 25 years of experience as a physician taking care of injured workers and as an insurance professional, having served as medical director for workers compensation primary and excess carriers.


Michael KearneyVice President and Claims CIO

53

Michael Kearney joined The Hartford in 2012. Prior to his present role, he was responsible for strategy and execution of transition of the Collaborative Technologies organization to a business focused, cost competitive service-based infrastructure. Kearney has 30 years of experience as a senior executive responsible for building and optimizing information technology capabilities to improve organizational growth and efficiency.

Prior to joining The Hartford, Kearney worked at Alvarez and Marsal, where he led IT consulting engagements in financial services institutions. He was also senior vice president and chief information officer at World Learning, a nonprofit organization advancing leadership through education, exchange, and development programs in more than 60 countries. Under his leadership, World Learning upgraded its technological infrastructure and obtained multi-million dollar grants from Cisco and Microsoft. He also served as chief technology officer and senior vice president at The Knights of Columbus, where he built a sophisticated technology team and global infrastructure for the Fortune 1000 insurance firm, and as the chief operations officer for the Phoenix Companies’ investment subsidiary in Hartford, Connecticut.

Kearney is a graduate of Bryant University with a bachelor's degree in business administration and a concentration in management information systems.


Mary NasenbennySenior Vice President Group Benefits & Workers’ Compensation Claims

54

In her current role, Mary Nasenbenny has oversight responsibility for all aspects of the Group Benefits and Workers’ Compensation Claims organizations, including Field and Major Case claim handling, strategy, practices, and medical and disability management.

Prior to her current role, Nasenbenny was SVP of Claims Solutions & Analytics, with oversight accountability for numerous Claims shared services areas including Legal Operations, Data Analytics, Special Investigations, Subrogation, FNOL Call Centers, Customer Loyalty, ECOS, the Project Management Organization, and Claims Training and Auditing. Previous roles included VP of Workers’ Compensation Claims and VP of Claims Legal Operations and National Director of Counsel, where she oversaw Claims’ in-house counsel program, which provides policy-related legal representation to The Hartford’s customers nationwide.

Prior to joining The Hartford in 1999, Nasenbenny practiced law for several years with a large Chicago-based insurance defense firm. There, her work focused largely on the litigation of ERISA and professional liability matters.

Nasenbenny holds a Bachelor of Arts degree from the University of Notre Dame and earned her J.D., with highest honors, from Chicago-Kent College of Law.

Nasenbenny serves on Board of Directors of Hartford Insurance Company of Illinois.

THE HARTFORD’S CLAIMS OPERATION: A COMPETITIVE … · 2019-10-03 · Auto & Property 700 First Notice of Loss (FNOL) & Operations 400 Auto Litigation Strategic Claims Management

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