Critical Thinking and the Claims Profession

March 2020

Critical thinking is not a new concept — it’s been around for literally hundreds of years. Think about how early philosophers, inventors, and scientists went about solving complex problems and explaining concepts previously thought of as mysteries or curses. It wasn’t until the mid-20th century, however, the term critical thinking came into use.1

Today, it’s one of the most desirable qualities for job candidates in most any industry because the critical thinker can be counted on to make sound decisions on their own. Recognizing its importance, educators have begun introducing critical thinking exercises to young children. In this article, we will explore what critical thinking is, why it’s important to insurance claim professionals, and how we can become critical thinkers.

“We can’t solve problems by using the same kind of thinking we used when we created them.” — Albert Einstein

What is critical thinking?

Like most abstract concepts, critical thinking is subject to interpretation. In simple terms, critical thinking can be defined as an objective analysis of a set of complex facts to form a rational, skeptical, unbiased judgment. Many people confuse critical thinking with analytical and lateral thinking. Analytical thinking focuses on facts, evidence, and data, often breaking down complex things into simpler components and eliminating extraneous information. Think about the insurance actuary; they use analytical thinking to identify patterns in certain data that may help to predict future outcomes. Their analyses will help determine future pricing and product offerings.

Lateral thinking is an indirect and creative approach to problem solving which involves looking at an issue step-by-step, from different angles, and finding what may be missing. The lateral thinker may identify many potential solutions to a single problem. Lateral thinking is sometimes thought of as an idea generator for innovators in their field. For example, insurance marketing professionals will look at prior sales data as well as goals for the future, then use lateral thinking to develop their marketing strategy that addresses prior successes and failures as well as future expectations.

Why is critical thinking important?

The critical thinker may borrow tools from analytical and lateral thinking but also recognizes the need to reconcile hard data with common sense. They will be most successful when blending natural feelings with logic and intuition and applying all of these in a systematic way. Critical thinking aims to make an overall or holistic judgment about the data/information which is free from false premises or bias.2

Based on these definitions, one can easily correlate critical thinking to the adjudication of insurance claims. When presented with a complex claim scenario, the claim analyst must use critical thinking to:

  • Understand the links between ideas
  • Determine the importance and relevance of arguments and ideas
  • Identify inconsistences and errors
  • Justify their own assumptions, beliefs, and values.

The claim analyst can then arrive at the best possible decision under the circumstances. Although a claim analysis might begin with a gut feeling, the decision ultimately reached through critical thinking is one that can be justified and supported when challenged. In making claim decisions, we must guard against taking mental shortcuts, which isn’t easy in today’s fast-paced, interconnected environment.

So, if critical thinking is so important, why is uncritical thinking so common? Why do so many educated people find critical thinking so difficult?

Thinking critically requires keeping an open mind, which is not always easy. There are barriers, both subtle and blatant, to thinking critically. These include: pride, fear of change, inappropriate bias, prejudice, unwarranted assumptions, fear of being wrong, narrow-mindedness, stereotyping, political correctness, anger, apathy, and uncertainty.3

We may tend to draw conclusions based on inaccurate or irrelevant information or information taken out of context. A critical thinker must be able to sift through large volumes of information to determine what is relevant and what may be missing, while at the same time, consciously avoiding confirmation bias, which is the tendency to look for information to confirm our own preconceptions. Confirmation bias can be particularly damaging if a claim decision faces a legal challenge down the road. Of course, we must never engage in group bias, such as racism or sexism, and we must never be perceived as dehumanizing a claimant or beneficiary.

While it is important to keep an open mind, it is also important to acknowledge our personal assumptions and actively expose them to rigorous critique.4 Hold these assumptions up to light, and open them to scrutiny. Both fact and opinion may play a role in the critical thinking process, but we must recognize and differentiate the two. It is important to acknowledge and consider opposing arguments on the matter.

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Contact the Author
Headshot of Erin Worthington
Erin Worthington
Account Representative
CFE, FLMI, ACS
eworthington@munichre.com
References
The Foundation for Critical Thinking, Defining Critical Thinking, Criticalthinking.org, Retrieved from  https://www.criticalthinking.org/pages/defining-critical-thinking/766 2Warner, Dr. J., (2014, February) Critical Thinking: How is Critical Thinking Different from Analytical or Lateral Thinking?, ReadytoManage.com, Retrieved from http://blog.readytomanage.com/how-is-critical-thinking-different-from-analytical-or-lateral-thinking/ 3Korn, D., Barriers to Critical Thinking & The 7 Essential Questions for Reflection, LearntoPrepare.com, Retrieved from http://learntoprepare.com/2014/08/barriers-to-critical-thinking-7-essential-questions-reflection/ 4Standards and Obstacles to Critical Thinking, canvas.santarosa.edu, Retrieved from https://canvas.santarosa.edu/courses/40367 5Skills You Need, Critical Thinking, Skillsyouneed.com, Retrieved from https://www.skillsyouneed.com/learn/critical-thinking.html

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