Claims focus group on a mission

Airmic’s new claims group is firmly on a mission: claims handling needs to improve and significantly so. It’s no easy task, and one that will require change from all parties involved, including risk managers, insurers, brokers and company c-suites.

Risk manager surveys consistently highlight issues related to claims as one of their biggest concerns. Claims outcomes are ultimately the acid test of any insurance programme so this is a vital issue for policyholders and insurers alike.

In January, Airmic launched its first focus group dedicated to just this. One of the key aims of the group is to bring together all the various parties involved in the process – risk managers, claims managers, brokers and insurers - to discuss hot claims topics and to establish a clearer version of what best practice looks like.

So what are the biggest challenges? As Angela Doran, chair of the focus group says, the whole claims process needs to be “more user-friendly, with greater pace”. One of her pet grievances is that insurance companies tend to get involved only once a claim has already arisen, by which point time is a scarce commodity. “If I could change one thing it would be to ensure that having a claims protocol in place from day-one of the policy is the industry norm, not the exception.”

But for both Doran and Karen Dawson, Assistant Insurance Manager at BAM Construct, the change needs to start within businesses themselves and the first step is recognising the need to invest in quality claims management.

The pressure to cut costs can be a false economy, says Dawson: “It is not always appreciated by organisations that there is a need to invest to save where insurance claims are concerned. When pressure is to reduce costs, organisations reduce head count within their internal provision and assume the claims will be managed appropriately by external parties.”

She adds: “But organisations that invest in an in-house resource consisting of an experienced claims professional will consistently be able to demonstrate a significant reduction in claims spend. However, risk managers have difficulties in convincing their boards of the importance of this.”

Doran agrees, arguing that understanding data is key to getting the most out of the claims process, but that takes time. “The benefits are not just about reducing claims spend,” she says. “If you dedicate time to claims you improve service to customers and the whole business benefits. Loss ratios are reduced and profitability and competitiveness are increased.”

The aim of the focus group is, on the one hand, practical: to improve education for members, offering tips and arranging workshops on day-to-day claims handling, management of insurers and third party claims administrators, and how to report to the board. To this end, the group’s first mission will be to publish a revised guide to claims best practice for Airmic members (see Box).

On the other hand, the challenge is as much about raising awareness and starting a conversation between all parties: getting everyone around the same table is an invaluable exercise. As Dawson explains: “Bringing insurers and brokers into the discussion will help them to understand the customers’ needs and in turn will enable them to enhance their own service and products.”

Ultimately, Doran concludes, the risk and claims community need to challenge the status quo to “make sure we are equipped to deal with the changing claims environment.” But she is realistic of the magnitude of change required. “We want to focus on what is possible, not what is improbable. Every journey starts with a single step.”

Karen Dawson