Taking Back Negotiation: Why Claim Professionals Must Lead the Next Chapter

In the rapidly shifting landscape of property/casualty insurance claims, negotiation stands at the pivotal moment for improved settlement outcomes, client satisfaction, and bottom-line carrier health. In 98-99 of every 100 litigated files, the carrier’s financial outcome will be established through negotiation.

Our insurance industry operates the largest negotiation network in the world. In the litigation arena alone, we estimate that 30,000 claim professionals assign approximately a million files a year to another 30,000 defense attorneys, approximately 98-99 percent of which will be resolved through negotiation. Add to this the ever-increasing number of non-litigated but attorney-represented claims, and the importance of effective negotiation is glaringly obvious.

Yet, as revealed in the latest Suite 200 Solutions Industry Snapshot “Claims Negotiation in the Age of AI-Enabled Plaintiff Advocacy,” the industry is facing a subtle but critical drift: Negotiation responsibilities, once the stronghold of claim professionals, are now often being handled by outside counsel rather than by those closest to the file and its unique challenges.

This article unpacks the findings of the Snapshot report in two core areas: who’s doing the negotiating, and how is the negotiating being conducted. We explore why the insurance sector must reclaim negotiation as a core competency and offer a road map toward strengthening negotiation acumen for competitive advantage.

Snapshot Results: Who Really Negotiates?

The Suite 200 Solutions’ Snapshot, surveying 56 senior claim and litigation executives (chief claim officer, heads of litigation) representing more than 50 claim organizations, paints a complex picture. Historically, claim professionals spearheaded negotiations, drawing on their intimate knowledge of the file, organizational priorities and industry nuances. However, the survey reveals an inconsistent landscape:

• Defense counsel now convey settlement offers more frequently than claim professionals. Both average and median scores for the percentage of negotiation offers conveyed by claim professionals are below 50 percent. More frequently than not, claim professionals have the purse strings but counsel does the talking.
• The proportion of offers made by claim professionals varies widely by organization—from as low as 10 percent to as high as 90 percent—underscoring a lack of industry consensus or standard practice.
• Only 4 percent of organizations formally track the negotiation role split, with the majority of executives acknowledging that their understanding is, at best, an informed estimate.

Roughly half of surveyed executives believe that claim professionals should be more involved in direct negotiation, signaling widespread desire to reverse the current trend.

Why Has This Shift Occurred?

As the Snapshot results reveal, executives attribute the shift to several interrelated factors:

• Confidence and training gaps: Many claim handlers lack confidence, often due to inadequate training or inexperience.
• Resource constraints: High caseloads and limited bandwidth make it easier for claim professionals to delegate negotiation responsibilities.
• Defense counsel resistance: Defense attorneys may push back against claim professionals taking the lead, sometimes citing established relationships with plaintiff counsel or tactical advantages.‍
• Market pressures: In some markets, plaintiff attorneys will only interact with defense counsel, further marginalizing claim professionals from negotiations. (One can only wonder why.)

Despite these challenges, the overwhelming consensus remains: Current trends do not serve the industry’s best interests.

The Value Proposition: Why Claim Professionals Should Negotiate

Only 8 percent of defense attorneys surveyed in the 2024 Claims and Litigation Management Alliance (CLM) Defense Counsel Studyreported having any formal training in negotiation, a number that 60 percent of the executives in this Snapshot found to be surprisingly low. A full 70 percent of the Snapshot survey participants believe that claim professionals have more formal negotiation training than defense counsel.

While training is not directly indicative of skill, Snapshot executives consistently noted that claim organizations are exposed to far greater volumes of disputed claims than outside counsel. This scale creates:

• Sharper intuition for settlement values across diverse claim types.
• The ability to synthesize outcomes, learn from patterns and refine negotiation approaches over time.

The Power of the Anchor

Of equal importance may be fundamental differences between claim and defense counsel negotiation philosophies. For example, the 2024 CLM Defense Counsel Study identified that the most popular negotiation philosophy among associate attorneys is that the defense should always wait for plaintiff’s counsel to make a demand before making an offer. In contrast, 79 percent of Snapshot executives believe they would benefit from making first-offers more often.

Snapshot responses suggest that the defense currently makes a first-offer in approximately one-quarter of files (25 percent median score). Executives would like this to be higher. However, for 92 percent of respondents this is an unmeasured data point in their organization.

Written Negotiation: The Power of the Written Word

Anchoring, framing, advocacy and persuasion are critically important to achieve optimal negotiation outcomes. Modern plaintiff attorneys, increasingly with the assistance of AI, present detailed, evidence-rich demand packages aiming to anchor negotiations at inflated values while painting a narrative that frames future discussions about the case.

In contrast, defense offers (a majority of which are conveyed by counsel) frequently rely on generic language or minimal justification. Often, these offers are conveyed with short emails, or verbally in brief phone calls. Comprehensive offer packages are used very infrequently.

There are many reasons for this practice, including a desire to hold back key defense points, to not show all the cards and to reserve negotiation points for future discussions. Another reason has been the historical cost and time required to assemble detailed, evidence-based and compelling arguments in support of offer amounts. (The cost and time required is reduced exponentially now with the market introduction of AI-generated offer packages.)

Written advocacy has grown in strategic importance for two reasons. First, written arguments are simply more persuasive than verbal. Second, one only needs to compare human and AI-generated demand and offer packages side by side to see quickly how advanced LLMs have become. Frequently, the AI-content is simply better, cleaner, tighter and more persuasive.

Plaintiff attorneys have understood the power of written communication for years, as illustrated both by their long practice of issuing demand packages and by their rapid adoption of AI tools, such as Even Up Law, to perform this function. Snapshot answers reveal that 69 percent of executives agree that plaintiff demand packages are more detailed and more evidence-based than offers from the defense.

Related article: Defendants, Insurers Risk Falling Behind on AI for Litigation

Studies in many industries show that written communication (when compared to verbal) results in better clarity and a much higher rate of information retention. If we want to persuade someone, we can tell them or show them. Adult learning principles reinforce that written communication creates both stronger cognitive associations and recall. Retention rates and comprehension simply increase.

For the defense, written offer packages:

• Allow for thoughtful framing and clearer articulation of valuation logic.
• Level the playing field against AI-driven, highly detailed plaintiff demands.
• Provide a record for internal benchmarking and future negotiations.

Snapshot results indicate that a full 98 percent of executives believe the defense would benefit from supplying persuasive, detailed, written justifications with each offer. They understand the power of the anchor.

What Must Change: Practical Steps for Insurance Leaders

Insurance carrier leaders are uniquely positioned to restore negotiation as a differentiating strength. Consider these action steps:

• Reassert ownership. Clearly define that negotiation is a claim function—not a legal function—in both policy and practice, reserving counsel for legal advice and procedural strategy.
• Establish tracking mechanisms. Start formally measuring the success rates and value drivers associated with who’s negotiating, the effect of first-offers and the effect of offer packages.
• Invest in training. Develop or expand negotiation training programs that go beyond the basics, grounding claim professionals in anchoring, written advocacy, behavioral economics and the science of persuasion.
• Leverage technology. Provide access to AI and data tools so claim professionals can mirror (and counteract) the tactics becoming standard among plaintiff attorneys.
• Foster a culture of advocacy. Encourage claim staff to make first-offers more often, provide detailed rationales, and take an assertive, advocacy-driven approach in all settlement communications.

Innovation as a Return to Fundamentals

Reclaiming the negotiation function is more about revisiting a proven, earlier model—empowering claim professionals to once again own the negotiation process, not just with their purse strings but with their advocacy and skills.

This is not a nostalgic appeal. It is a pragmatic response to rising settlement costs, rising litigation frequency and the increasing sophistication of the plaintiff bar. In a world where 98-99 percent of cases are settled, negotiation is where the battles are being won and lost. We must own this process.