Negotiation Is the Job: Reframing Defense Work in an AI-Enhanced Era

The article kicks off a multipart educational series, “Negotiation Reclaimed,” conceived by Guest Editor Taylor Smith, founder and president of Suite 200 Solutions. Smith introduced the idea in his recent Carrier Management article, “Taking Back Negotiation: Why Claim Professionals Must Lead the Next Chapter.” Read more about the series in “Sharpening the Industry’s Most Overlooked Skill.” Look for Part 2 in Carrier Management next month.

If you’re in the business of resolving litigated or non-litigated claims, you’re in the business of negotiation.

The math is simple: Most litigated matters are resolved without going to trial. That makes negotiation the defining process behind nearly every financial outcome in insurance litigation.

Despite this reality, much attention goes toward things like trial preparation, billing metrics and case milestone reporting. Meanwhile, negotiation remains underdeveloped as a core function—taught rarely, measured inconsistently and often executed reactively.

It’s time to change that.

Negotiation isn’t something we do when everything else fails. It’s the main event. It’s where outcomes are made.

The Real Work of Claims Professionals

At its core, resolving claims well means negotiating well. The emphasis here is on “well.” It’s self-evident that if file resolution were the only goal, we could accomplish that easily by simply paying whatever is demanded of us. But closure is not the only objective. We have obligations to our policyholders, to our shareholders and to the public to resolve disputes fairly and at appropriate settlement levels. In other words, to do it well.

Those of us with deep experience in this industry recognize that litigation is a subset of negotiation, and not the other way around. Litigation strategy should support our negotiation efforts. That means the biggest lever for improving claim outcomes isn’t litigation strategy or billing protocols. It’s negotiation.

Historically, claims negotiation has been built on experience, intuition and more informal routines. But that is no longer enough. We are definitely in a new age. On the other side of the table, plaintiffs’ attorneys are using AI tools to structure communication, curate evidence, control their messaging and frame their demands. Their approach can be both persuasive and highly effective.

For defense teams to succeed, we have to meet these new challenges with equal rigor. That doesn’t mean abandoning professional judgment. It means equipping ourselves to back that judgment with tools, data and strategy.

Claim Professionals Should Be Leading the Conversation

As several recent industry articles have highlighted, in too many files today the person with the authority isn’t the person doing the negotiating. Too often, our claim professionals are simply granting authority and deferring to defense counsel to deliver the message. That’s backward.

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

The claim professional often knows the file best. They may see more cases than counsel, or are exposed to more cases, or have more cases in a certain venue. When they lead the negotiation effort—or co-lead it in close collaboration with counsel—better outcomes may follow.

The questions that both the claim professional and counsel should be asking—at every step—should include:

Of course, none of this happens by accident. It requires a structured approach, discipline and hard work.

The Power of the Written Offer

There is a reason that demand letters from plaintiff attorneys are written with such detail. The written word can be emotionally compelling. Evidence and visual support can be convincing. We cannot allow ourselves to respond in less compelling ways.

Written offer packages provide an opportunity to present our valuation thoughtfully, with logic, fairness and persuasive power. They allow us to explain why a number is justified—not just what the number is.

More importantly, written communication creates permanence. It ensures the message can be absorbed, shared and remembered. It enables opposing counsel to share these arguments with their clients. All of that is something verbal communication (or short emails) may not be able to accomplish.

I often recommend verbal communication to establish a relationship, to enhance rapport and trust, to offer acknowledgement and show that I have heard opposing counsel. I use verbal communication to solicit dialogue. But to be compelling in my arguments, and to support my positions, my best foot forward is written. The power of the written word is very strong.

So Much at Stake

A dangerous misconception in insurance litigation is the idea that we should hold back our strongest arguments, keep our cards close and wait for the “right moment” to persuade. That moment may never come.

In a world where most cases settle, it is essential that we use our best arguments early—when they can still shape the discussion. We must anchor early, frame the plaintiff’s risk clearly, and put forward persuasive, well-supported proposals. Delaying that process doesn’t preserve leverage. It often forfeits it.

If you, like me, believe that honesty is an important trait during negotiation, the time to be honest is early. The opportunity to achieve a fair resolution is not lost at trial; it’s lost well before, when we’re reluctant to honestly, and persuasively, assert our position early in the case.

Challenges We Must Address

As an industry, there are real hurdles that we must overcome. I hear industry leaders worry that our claim professionals have lost their negotiation skills. Or that our professionals are too inexperienced.

We need to train them and give them skills. These are not optional add-ons. Negotiation is part of our essential infrastructure.

For some executives, their technology and compliance groups may be moving too slowly to adopt AI tools that may level the playing field with the plaintiff bar. Others are rightfully cautious about the cost of new platforms and want to ensure responsible ROI. We must educate them as to what’s at stake. A large AI provider to the plaintiff bar (valued at over $1 billion) claims a 30 percent increase in settlement values and a 70 percent increase in policy limit demands. Those numbers add up quickly.

None of these challenges are insurmountable—but they require prioritization and action. We can no longer afford to view negotiation as a soft skill or as something that happens organically. It is a skill that must be developed, measured and supported. We must be intentional.

Looking Ahead

In the coming months, this series of articles will dive deeper into pragmatic strategies for reclaiming negotiation as a core competency—from communication techniques and offer design, to metrics, training and technology enablement.

Our industry has every reason to be optimistic. We have the expertise. We have the data. We have the authority. However, we must commit to putting negotiation where it belongs—at the center of our claim strategy.

Because negotiation isn’t a task. It’s the job.

Morrison is divisional senior vice president, claims, alternative markets at Great American Insurance Group. He oversees teams managing various aspects of claims, including casualty, commercial auto, property, workers compensation, subrogation, operations, data analytics and TPA oversight.