A Piece of Paper and a Promise: David Fernandez on Claims Quality as a Daily Grind, Small Teams, and Kingstone's Turnaround

1

A Broken-Down Car and a Newspaper Ad

David grew up near Drexel University in Philadelphia, majored in government, and was absolutely going to law school. He wanted to be one of his parents' friends, the happy, successful lawyers. Instead he took a job out of college that he did not like, quit, waited tables, and then his car broke down. Now he needed a job and a car. Reading the Boston Globe, he found an ad for a claims rep trainee at Progressive. It paid 22,000 dollars a year and came with a company car, a Volvo 240.

He fell in love with the work and stayed at Progressive for 18 years. A decade at Liberty Mutual followed, where he got to lead claims teams and work well beyond field operations, then stops at Unum and Point32Health. The call that brought him to Kingstone came in the summer of 2023 from CEO Meryl Golden, whom he had known since their Progressive days and had always wanted to work for. Of every career move he has made, he calls that one the easiest. If Meryl and the team she was building could not turn Kingstone around, nobody could.

Three years later the turnaround is a public story: Kingstone is a public company, the financial news has been good, and the carrier is now positioned to expand into new markets. David credits every single employee for it.

"I don't know what insurance really is. I don't know what a claim is, but this sounds like a great gig."

David Fernandez

2

Quality Is a Grind, Not a Project

Asked what shaped how he runs a claims organization, David goes straight back to Progressive and a lesson about discipline. Claims quality, accurate service and efficiency are not initiatives. They are daily blocking and tackling, claims 101, 365 days a year. You cannot take time off from it to work on a project.

James makes the point from the other side of the table: claims has no renewal season and no off-peak. It is hard, and then harder when catastrophes hit. David's answer is that paying what you owe, based on the merits of the claim, is not something you do for six months. It is what you do this year, next year, and every day in between.

The typical consumer has an auto claim once a decade and a homeowners claim once or twice in a lifetime, and the premium is not cheap. That one interaction is the carrier's single chance to show up with great, empathetic, timely service. It is also why Kingstone refuses to work on more than two or three things at a time. David has watched other organizations run a cycle he calls plan, do, walk away: implement something, move on to the next project, and never confirm the benefits actually landed.

"We sell a piece of paper and a promise. Sometimes it's a PDF."

David Fernandez

3

Until You Have a Team You Believe In

The second lesson David carries is that it is all about the talent around you. During a dark stretch with a team early in his career, a senior leader at Progressive pointed at the Hudson River and gave him a line he has never forgotten.

So in every new role his first goal is the same: build a great team and be the best boss he can be for them. James agrees that this is now the whole job. A chief claims officer is no longer adjudicating files; the work is leading and running teams.

Part of leading them, in David's view, is creating an environment where people can say out loud that a decision was wrong and it is time to paddle back and take a different path. If you are making decisions, you are making mistakes. Nobody bats a thousand. When people believe a failure reflects on them personally, they spend six months defending the decision instead of talking about how to fix it.

"Until you have a team that you believe in, you are swimming up river."

David Fernandez

4

Eleven Catastrophes in One Quarter

For a property carrier, David says, catastrophe response has to be top of mind, because getting it wrong can set a company back years on both customer service and the balance sheet. The Northeast gives Kingstone both ends of the spectrum: hurricanes and tropical storms on one side, winter storms and nor'easters on the other. In the first quarter of this year alone, New York saw eleven declared catastrophes, driven by two huge snowstorms, a stretch of brutal cold, and March wind. He calls it a healthy diet for testing the cat plan.

Cold has an insidious side. A frozen pipe is invisible until it thaws, and then the homeowner has water under pressure running through the house.

James lays out the pressure claims organizations are under from every direction: regulators, reinsurers, brokers and clients all want more data and more access to it, handling instructions are getting more complex, and on top of that the business wants faster, better and cheaper at the same time. His father's rule was that you could only ever pick two. David's response is to keep a carefully prioritized list of the changes that make things better for customers and easier for adjusters, and to accept that with technology moving this fast, some bets will not pan out.

The hard part, both agree, is the first three months after go-live, when you have to decide whether you are just in the whitewater or whether you should have taken the other fork. It is also where vendors matter. Kingstone writes checks to 40 or 50 of them, but David draws a sharp line between a vendor, a transactional information exchange, and a partner. The claims platform is a partner: both sides are in it together, each making the other better.

"You're going to make some bets on a technology that maybe doesn't pan out the way you hope. And you can't let that slow you down or stop you from trying the next thing."

David Fernandez

5

Four Months, No Slides

Kingstone recently replaced its claims platform, and James wants to talk about everything around the software rather than the software itself. David gives three reasons it worked. First, they picked the right partner. Second, a small but mighty team did most of the design and configuration, and they were empowered to make decisions, knowing they would not get every one right and could fix the misses afterward.

No two-hour Friday steering committees, no PowerPoints. Third, the adjusters were unhappy with the prior system, so the ground was fertile for change. Instead of keeping user acceptance testing to a small group of efficient testers, the team brought in the most experienced adjusters, the change champions, who went back and told their colleagues the new system was going to be a lot better. The implementation ran four months from start to finish, and David, who has been through several on the employee benefits and P&C sides, calls it easily the most flawless he has seen.

His explanation for why a committee would have been slower is the line of the episode for anyone who has ever kicked a decision to a three-month study after a rough claims month.

Walk into one of those working sessions, he says, and you could not tell who was from claims, who was from IT, and who was from actuarial. That cohesion is also the strategy. Kingstone will not out-scale the top ten or top twenty carriers. It competes by being nimble, being fast, and working as one team.

"There was not a single slide for that whole thing."

David Fernandez

"Making no decision is worse than making a suboptimal decision."

David Fernandez

6

Advice for a Young Adjuster

James closes by asking what David would tell a claims professional two or three years into their first adjusting job. Two things. Learn as much as you can about the technical side of claims, whatever the line of business, because that foundation serves you whether you stay in claims or move into technology or underwriting. And find a mentor who will be a sounding board and support your career. David names Brian Bissell, president of claims at Progressive, as his own. James answers with Skip Brechtel, the TPA executive who taught him everything he knows about insurance, and whose funeral drew more than a hundred business people who each called him their mentor. The challenge for anyone who has been in the industry a while is to take the time to be that person for someone else.

7

Key Takeaways

8

Connect with David Fernandez