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What's Going On Over At BP?

I reported last month on the tangled web of regulations and stakeholders in the BP case, and it doesn't seem to be getting any easier for the excoriated oil company to manage the claims against it.

I reported last month on the tangled web of regulations and stakeholders in the BP case, and it doesn't seem to be getting any easier for the excoriated oil company to manage the claims against it.A shrimp supplier told AFP the company's claims process "sucks" in an interview released today. He described it as such:

"They're basically doing what an insurance company does, send you the first adjuster who says we should pay you, then they fire that adjuster and hire another one until they find an adjuster who thinks they shouldn't pay you."

Another claimant supports the many-adjuster approach:

"Five times they have reassigned me with a different adjuster," she says. "Because in their minds they say they don't know what to do with me. Well, they're going to have to figure it out."

BP itself says it hasn't denied a claim. But it's not surprising that it's operating like an insurer (in terms of its operations, not because it's allegedly trying to skirt claims). It's heavily self-insured. It has its own insurance subsidiary for situations like this - well, maybe not exactly like this, but for situations, at least. The company is now seeing what it's like to be a carrier: facing people who are at a very low point in their lives and trying to quantify that situation financially.

The use of "insurance company" as a pejorative stings a little bit. Perhaps this is why BP seemingly can't wait for the government to take over claims administration.

"We continue to look for ways to improve or simplify the claims process," BP spokesperson Elizabeth Adams said.

"As you know, Feinberg will take control of the process on August 23, and will take on any ongoing issues and may address some changes."

If there's anything people dislike more than insurance companies, it's the government. It will be interesting to see what the perception of claims adjustment is after Feinberg takes over.

To make matters worse, BP is being sued by the state of Alabama, essentially for incompetence; and has been fined $50 million for an explosion at one of its refineries in 2005.

For what it's worth, ACE Limited, the parent company of BP's adjustment contractors, ESIS, added a new vice chairman today. And, the nightmare might be over in the Gulf. But the growing and evolution pains of the BP claims process will continue to pour out.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio

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