What could be more interesting than claims?
We ask insurance VP Stephen Dzury.
A Magna One-on-One Interview with
Stephen Dzury has managed high-profile, media-intensive cases with claims such as hazing, sex abuse and excessive force on behalf of school districts and police departments across the country (although his actual job title was a bit more sedate: Senior Vice President of Claims for Berkley Public Entity Managers). Dzury later moved on to IAT Insurance Group as Senior VP of Casualty Claims.
Dzury is now looking for his next challenge, however he’s studying up on the latest trends in the industry and took some time out to discuss those trends.
You have a BA in political science from Temple University, and an MS in business management from the Johns Hopkins University Carey School of Business. How did you start out in the insurance business?
That’s a story in and of itself. I am a native of Westfield, New Jersey, and after finishing my bachelor’s degree, I went to a New York City job fair. I got an interview for a claims position at Travelers Insurance and read up on the company the day before the interview. I went to the interview, and the recruiter said that I showed up on the wrong day – it was actually the day before. I asked if I could speak with him for 10 minutes. He said he could tell I had read up on the company. I told him I had been at the library for two to three hours doing that. Three weeks later, I was asked to interview for an environmental claims position in Baltimore. I got the job and handled issues such as asbestos, fuel oil spills and hazardous waste.
Magna first spoke with you seven years ago but the interview was never published. What has changed in the past 7 years?
I switched jobs from what was essentially a start up with lots of high-profile cases that were in the media to re-working and revamping a casualty organization from the ground floor up. I can’t begin to describe the changes.
OK, so what do you do after a couple of whirlwind jobs like that?
Now, I’m taking some online classes on data science and analytics. I’m looking at analytical approaches that are in place or really coming into place in the claims realm, as automation and artificial intelligence make significant gains in the claims world.
Can you translate that into English?
To overly simplify, a big aspect of data analytics is examining data, and looking for patterns to illustrate how efficient you are as an organization and how well you are deploying your resources to get the best outcome possible for whatever type of claim you may be examining, from bodily injury matters to employment.
When you have a claim involving different elements of damages, you want to look at certain metrics: How long did it take for the claim to come in the door? How long did it take for the adjuster to settle the case? Are we getting 90 to 95% of auto physical damage claims closed in 30 days? In the end, what are the correct Key Performance Indicators (KPI’s) you want to meet. And then, should they be adjusted over time?
For example, an overly simplified view might involve the use of outside counsel: Let’s say you have two cases with similar injuries and venues. One outside counsel settles the claim for $750K and the other settles it for $900K. So the firm that can resolve the claim at $750K is the better firm to be working with, right? Well, maybe. What was the overall cost of the claim?
Two similar claims, one with a settlement of $750,000, however it takes 6 months longer to settle, and costs $75,000 more in legal fees than the case that resolved for $900,000. If the total cost of that claim is more than the total cost of the $900,000 settlement, with legal fees, and the time it was open – maybe the firm on the higher value settlement is still the firm that gets better results, ultimately.
Five years ago, everyone started talking about predictive analytics, which has really come into its own in the Workers’ Compensation world. In the liability world however, it is still in its infancy – it has had some success but at the same time, hasn’t fully lived up to expectations in the real world.
It’s easier in theory than in practice to build those models.
For example, when it comes to bodily injury, you’re trying to get to a place of objective data based on a subjective variable.
You might be right. But speaking of famous executives, what about Founding Partner & Executive Vice President Sales Pete Hecht and his team at Magna LS?
Magna adds huge value to difficult legal questions. They do quality research and give us insights into specific cases.
You might have a high value, difficult case, for example, and can research five similar cases to see how they played out. But if you really want to test your theories and the specific variables involved in your case and then get an overall evaluation, you can only do that – without actually going to trial – with Magna’s JuryEvaluator. Magna gives you real-time data on how 100 potential jurors will look at your case.
If you have a half million dollar case and are unsure how things will play out, you can get incredible insight with JuryEvaluator that you can’t get anywhere else.
I did a jury eval on a slip and fall; basically, we had questions about how things played out. The physics of it didn’t quite make sense. The eval showed that more than 50% of sample jurors said the claimant “might be” or was “definitely” faking it. But more than 50% still gave him significant damages. So that was immensely helpful and gave us an idea of our potential exposure if we took it to trial.
Again, this is the difference between doing something in theory, like researching similar cases. Or getting answers from real life by hiring Magna.
I also saw it with Magna’s surveys and webinars they did on juror attitudes during COVID. We passed that on to our actuarial and underwriting people and could see how juror attitudes were changing in real time. That in turn affects your thoughts on whether to settle or not and who to insure.
Is Magna really that good?
This is how it played out with me when I hired Magna. You write a 10-minute narrative of the case, or Magna will do it for you, and you approve the narrative. Magna then presents the case to a panel of 100 people. The people will come from the same venue, or a similar one. A narrator reads the story to the panel and they answer questions. You get a number of possible verdicts and Magna uses statistical modeling to eliminate the outliers and find the more likely verdicts.
We gave them a test case from an actual trial and they came back with the exact same figure the real-life jury returned.
It was a little bit scary it was that accurate.
One of your former jobs involved high profile cases that were in the media. What were those like?
They involved cases with allegations of teachers sleeping with underage students, and hazing allegations involving a high school football team in New Jersey. (According to a New York Times story shortly after the allegations surfaced, “Three of the seven defendants are charged with multiple counts including aggravated sexual assault and criminal sexual contact; four others face various counts including aggravated assault and conspiracy.”)
How does media attention complicate the job?
It makes it more difficult for us to develop and present our narrative at mediation and trial because the media creates the most sensational narrative for page clicks. And it may not be accurate because they don’t have access to the facts.
What is one of your solutions?
We hire media outreach people to work with us. Ten years ago, no one would have even thought of that; you would just hire an attorney. Nowadays, if you say, “No comment,” it is interpreted negatively more and more. We also work with psychologists, psychiatrists and behavioral specialists to help our insureds.
What trends were you seeing?
More cases of female teachers in their 20s and 30s having sex with male students who are 15 to 17 years old. We are trying to figure out the reasons why and how we can prevent it. The issues may be power, societal issues such as “forbidden fruit,” or other psychological issues. Meantime, the instances of male teachers with female students seemed to have been dropping.
At a different end of the spectrum, for example, there is the issue of concussions. We’re not necessarily seeing rising numbers, but more awareness, and we are capitalizing on that to work on prevention. The old days of “You got hurt, put some dirt on it and get back out there,” have been shown to be medically damaging, and are not appropriate.
You’ve also got some insights as far as what investigators can do.
Good investigators and good claims adjusters have an innate sense of curiosity.
One thing I did was to send investigators to mediations with the claims adjusters as an educational exercise to see how their work was used in the process. I also put adjusters with investigators, which made the adjusters better claims investigators: They learn how to ask and dig for the right information.
What can be more interesting than high profile cases and data analytics?
That’s correct. It’s uniquely challenging in that large trucking companies are not sympathetic defendants by and large, at least as demonstrated repeatedly by jury research, and large trucking verdicts.
Plaintiff attorneys seem to focus more on going after them because we have all been on the highway in our car sharing the road with an 18-wheeler and it can be intimidating when everyone is going 60-plus MPH.
So, it can be challenging when you have trucking companies as defendants. There can also be media involvement in those situations.
As an adjuster or manager, it’s important to be empathetic and fair, while recognizing what a claim is worth, while also mitigating your insured’s potential exposure.
And trucking itself is still, if not the backbone, right up there with rail as to how goods are moved through country. We saw that with Port of Los Angeles backup due to COVID and/or maybe other factors: Store shelves go empty. We can’t get the medicine. It’s a critical component of our infrastructure.
So, transportation cases are more challenging to handle but that is also part of the appeal.
OK, so you’ve dealt with lots of high-profile and difficult cases. What do you do for fun?
What could be more interesting than claims? In all seriousness, I have a wonderful family, spending as much time as I can with my kids, and I’m also currently in the process of restoring a 1962 Willy’s 1-ton pickup truck– a truck that my dad had bought brand new in 1962 and has been in our family since.