Diagnosing a Bodily Injury Backlog: Reserves, Caseloads, and Misleading Metrics

The indicators point to evaluation and triage failures rather than effort problems. Caseload is 350 pending per adjuster (4,200/12), well beyond the 125-150 range typical for bodily injury work, so adjusters are triaging by urgency rather than by exposure. The 9% rate of 50%-plus reserve increases at 90 days signals weak initial evaluation: adjusters are setting reserves from the first medical report instead of obtaining wage verification, treating records, and a preliminary liability assessment at contact. Diary compliance at 61% means follow-up is being deferred, which explains the 214-day cycle time. Rising closures with rising severity and doubled reopenings is the classic signature of premature closing to satisfy a count metric - claims are being shut down before treatment is complete and then reopened at higher cost. Deteriorating ceded loss ratios follow from late reserve development, not from random volatility.

Segment the inventory and staff to the segments. Create a rapid-resolution unit for claims under $25,000 with final authority at that level and a 60-day resolution goal; route complex claims over $100,000 and all litigated files to a senior unit with caseloads of 60-75; keep the remainder in a core unit at 150-175. On arithmetic alone, 4,200 claims at 150 pending per adjuster requires 28 adjusters, versus 12 today - an unrealistic immediate hire, so phase it: add six experienced adjusters, close or resolve the 400 oldest files, and use a nurse case manager plus a medical-bill review vendor to compress treatment tails. Require first contact and a documented reserve rationale within 14 days, with supervisor sign-off above $50,000. Set a 90-day milestone to hold pending per adjuster under 250 and the reserve-increase rate under 4%.

Replace raw closures per adjuster with a balanced set: (1) reserve adequacy, measured as the percentage of claims with an increase over 25% at 120 days and as paid-to-incurred deviation; (2) quality-adjusted cycle time, reporting time to first contact, time to first payment, and total life of claim separately, since a single average hides the tail; (3) reopen rate and payment accuracy from a monthly file audit of 10% of closures; (4) inventory aging, showing the percentage of files open beyond 180 and 365 days; (5) expense ratio and allocated loss adjustment expense per claim. Closures per adjuster rewards exactly the behavior that produced the reopenings. Any replacement metric should be paired with a supervisory file review so that a low cycle time achieved by underpaying valid claims is detected as fast, not good.