Core Claims Process Redesign (CCPR)is the moniker given to the overhaul of Allstate Insurance Company’s claim handling practices with the assistance of Mckinsey and Company in the early 1990’s. While the name is unique to the project undertaken at Allstate, it is representative of the claim handling practices and culture that have spread across the insurance industry in the wake of Allstate’s experience.
Simply put, CCPR is analogous to your grocer selling you what used to be, and what you think still is, a 10 ounce can of peas which, unbeknownst to you, is only filled to 8 ounces. Translated to insurance, this is your carrier charging the same premium in exchange for what has become less and less coverage and good faith toward you, the policyholder. The loss to the individual policyholder may seem insubstantial, but aggregated across millions of insureds who purchase insurance with the mistaken belief that they are getting what they paid for the financial gains reaped by carriers have driven their bottom lines for over a decade. Before CCPR, you paid x dollars in premiums for y amount of coverage and you had good faith that when disaster struck, you were going to get assistance from the insurance company to get the full coverage and full amount of your loss.
At Allstate, the shift to what we have today began in the early 90’s With the engagement of McKinsey and Company, one of the largest consultancies in the world, to redesign Allstate’s claims process under the aegis of “Core Claims Process Redesign”. For Allstate, CCPR allowed it to make more for itself and its shareholders at the policyholder’s expense by retaining as profit a larger share of the funds previously earmarked for paying policyholders’ claims. Allstate’s bottom line, and shareholders, responded accordingly. And since all publically held companies’ performance is measured against their competition, other insurance companies, either independently or in pursuit of Allstate, have followed suit.
This shift, this redesign of the core claims process has made getting the full coverage you deserve a nightmare. But who’s looking out for you and what can you do to protect yourself? Look for our next blog to learn more.