Confirmation Bias in Claim Handling: Here's the Conclusion, What Facts Can We Find to Support It?
Bias in claim handling is a predisposition to a particular outcome. When investigating claims, claim adjusters should pursue all relevant evidence, especially evidence that establishes the claim's legitimacy without bias. Investigations should seek to discover the facts and consider all aspects of the claim so that decisions are impartial and fair.
Confirmation bias is our tendency to cherry-pick information that confirms our existing beliefs or ideas. It is most pronounced in the case of ingrained views and explains why two people with opposing views on a topic can see the same evidence and come away feeling validated by it.
Confirmation bias contributes to overconfidence in personal or organizational beliefs, and it can even strengthen beliefs in the face of contrary evidence. For example, a police detective may identify a suspect early in an investigation but then seek only confirming rather then disconfirming evidence; a physician may prematurely focus on a particular disorder early in a diagnostic session and then seek evidence to support it; and in social media, algorithmic editing only displays information to individuals with which they are likely to agree, excluding opposing views.
Jumping to a conclusion is a particularly seductive line of reasoning during the early stages of a claim investigation. At that time, information is diffusely aggregated among parties and stakeholders, and minds trained to see patterns and draw conclusions begin to see and draw them. And quite often, information is too ambiguous to allow the claim professional to definitively identify determinative factors and value drivers with respect to the information being gleaned from the claim file.
This represents a trap, because the deeper one gets into investigating a particular hypothesis, the more difficult it becomes to consider contradictory ones. It becomes common for the claim professional to seek evidence that confirms her suspicions and overlook data and investigative material that does not. The result is a confirmed bias, bypassing both claim methodologies and best practices in claim handling.
Avoiding Confirmation Bias:
Take it all in, don't jump to conclusions:
Treat the initial data and information gathering stage of the claim as a fact-finding mission. In other words, resist the temptation to immediately generate potential hypotheses.
Brainstorming: the Rule of Three:
If possible, identify three potential causes for each unexpected or unanticipated event or driver that is identified in the claim file. Why is three the magic number? Research has shown that individuals who develop three hypotheses are more likely to correctly identify misstatements or misinformation when performing analytical procedures than those who develop just one hypothesis. From a probabilistic standpoint, the more plausible the expectations brainstormed, the higher the likelihood that the underlying cause of the event or driver will be identified.
Prove yourself wrong.
It is natural to seek out evidence that confirms the claim professional's expectations or explanations. However, accepting evidence as support ignores the fact that the same evidence could also indicate a different explanation. In similar fashion, it is also common to subconsciously ignore contradictory evidence — this is the heart of confirmation bias. The claim professional should instead try to disconfirm his initial suspicions by actively seeking out and weighing contradictory information; such an approach can only lead to stronger and more definitive conclusions.
Think for yourself:
The internet is full of information, claim files are full of opinions, and claim professionals are so busy that they end up quoting someone else's thoughts without making sure they agree with what they are quoting (in particular, defense counsel). Think for yourself. Do not depend solely on what people are telling you, find out for yourself, and if you have to do some thorough research, do it — you will be better off for it.
Be comfortable with disagreements:
Play "Devil's Advocate." If a person believes something, another might come along and test those beliefs by asking pointed questions or making strong statements about the subject, usually from the opposing standpoint. If the person really knows their subject, this does not pose a threat — but for others who have not been thinking for themselves, someone playing devil’s advocate really points out the need to expand thinking.
Be self-observant and self-critical:
Pay attention to your thinking and your decision making. Be comfortable doubting your objectivity and critically examine the reasons for your decisions. Catch yourself applying stereotypes and actively redirect your thinking.