The National Structured Settlement Trade Association (NSSTA) has established a new NSSTA "Industry Growth Initiative," "designed to identify opportunities to expand the use of structured settlements and bring those opportunities to the structured settlement industry marketplace."
NSSTA's new Growth Initiative appears to potentially address, and/or encompass, multiple growth-oriented goals NSSTA president Michael Goodman identified during NSSTA's 2015 Annual Meeting.
Rationale for a Growth Initiative: annual structured settlement premium reached its historic 12 month industry record of $6,226,578,725 in 2008 after consistently averaging close to $6 billion annually from 2001-2007. Annual premium totals dropped off sharply from 2009 (following the 2008 financial crisis) thru 2012 before showing modest improvements in 2013, 2014 and First Quarter 2015.
NSSTA's Growth Initiative also appears to build upon other recent NSSTA projects including a three-part structured settlement survey commissioned by NSSTA, and conducted by CLM Advisors, of NSSTA members' traditional sales targets: senior claims executives (Part 1); claims professionals (Part 2); and plaintiff attorneys (Part 3).
Although individual interpretations may differ, each of NSSTA's three surveys identified opportunities to expand the use of structured settlements and therefore each offers valuable insights for NSSTA's Growth Initiative.
For example: NSSTA's survey of senior claims executives confirmed continuing support among survey participants for structured settlements as well as their perception that structured settlement consultants add value to the liability insurance claims process.
Results of that survey, however, also suggest to S2KM that future defense-driven structured settlement market growth will require consultants to:
- Reformulate traditional structured settlement education programs applicable to property and casualty insurance clients; and
- Help these clients identify and produce better metrics and analytics: 1) to define the meaning of structured settlement "success"; and 2) to determine related program effectiveness.
To help "identify opportunities to expand the use of structured settlements", S2KM will offer its summary and analysis of NSSTA's three-part survey in a series of blog posts beginning with NSSTA's survey of property and casualty insurer senior claims executives. The remainder of this blog post summarizes findings from that survey. In two subsequent blog posts, S2KM will offer its interpretation of that survey's results.
NSSTA Survey of Senior Claims Executives - Summary
The purpose of NSSTA's survey of senior claims executives was "to generate ideas and a foundation for developing an effective marketing strategy for this industry segment."
The survey focused on answering two questions:
- "What do senior claim executives in the property casualty insurance segment perceive to be the primary values created by structured settlements and settlement consultants?"
- "In claims organizations which do not provide their own underwriting markets for structures, to what degree are there mechanisms in place for promoting, measuring, and managing structured settlements utilization?"
Survey participants were selected by CLM Advisors from ten leading insurance carriers "of varied size ... whose book of business and style of operation lends itself to the use of structured settlements" and who do not underwrite their own structured settlements.
Survey questions were organized within the following categories:
- General Trends
- Program Attributes
- Perceptions Around Value
- Reactions to Value Proposition Statements
- Forced True/False Choices
- Extracting Future Value
Although all of NSSTA's claims executives survey results provided useful feedback, some of the survey responses were predictable and unlikely to impact future structured settlement marketing. For examples:
- Most of the claims executives surveyed believed structured settlement utilization has not decreased during the past three years but has decreased during the past 10 years - and that lower interest rates are the primary factor.
- Almost all survey participants viewed their companies as having a "formal" structured settlement program either as an exclusive (one broker partner) or preferred (approved broker partner) program with varying internal stakeholder "ownership".
- The types of cases where survey participants viewed structured settlements as most effective: liability cases; minors cases; workers compensation cases; lifetime benefits; medical payments.
Other selected survey responses, as categorized and summarized below by S2KM, provide greater informational value for subsequent S2KM interpretation and analysis.
Structured Settlement Program Metrics
- 100 per cent of the survey participants said their companies could do more to proactively use structured settlements.
- Only 20 percent of the survey participants reported having any set of objectives around the use of structured settlements.
- A majority of the survey participants do not measure referral volume and only half measure the volume of successfully written structures.
Structured Settlement Value Propositions
- The strongest value propositions for using structured settlements, as viewed by the survey participants: 1) addressing future medical expenses; 2) "needs-based" negotiation; 3) addressing future lost wages; 4) adds no additional work.
- Although still in agreement, survey participants viewed two traditional structured settlement value propositions less strongly: 1) lower claims payouts; and 2) earlier claims resolution.
- Survey participants disagreed with the following structured settlement value propositions: 1) achieve earlier settlements; 2) benefit to society; 3) 35 per cent savings on MSAs; 4) equally effective on smaller and larger claims.
Structured Settlement Consultants
- 90 per cent of the survey participants believed consultants do a good job of describing their value.
- Survey participants viewed consultants' primary value proposition related to their knowledge of, and ability to sell, structured settlements.
- Two thirds of the survey participants believed that consultants skills have stayed the same, while the other one third said the skills have improved, when compared to 10 years ago.
- 90 percent believed involvement of a structured settlement consultant made a case more likely to settle.
- Survey participants, on average, believed their companies utilized structured settlement consultants in only 66 percent of appropriate cases.
- Two thirds of the survey participants believed that front line claims professionals in their organizations shared their perspective on a consultants' value.
Additional Marketing Feedback
- Survey participants would value more educational and informational services from structured settlement consultants on such topics as: 1) their facilitation roles; 2) MSA requirements; 3) structured settlement benefits; 4) internal rates of returns; 5) industry developments and trends; 5) case specific advice including post-mortems and how claim handlers perform.
- Other recommendations: 1) expand Medicare services; 2) add online resources to price benefits; 3) obtain references from defense counsel.
S2KM will analyze selective findings from NSSTA's survey of senior claims executives in two subsequent blog posts.
S2KM summarized historic structured settlement surveys which preceded NSSTA's three-part survey project in this prior blog post.
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