Claims down-turn threatens performance

Apr 20, 2012

Results from our latest Claims Performance Monitor (CPM) show that the improvements in claims service seen over the last two years are potentially being undermined by performance at the start of 2012.

From our knowledge of the market and brokers' decision-making, this could have serious repercussions for all players in the market. Results from the latest quarter of 2012 show most insurers receiving lower service scores, including the market leaders.

So, what are the reasons for this decline? The most obvious hypothesis is that the market has had to cope with such a high volume of claims recently, which puts strain on people and processes.  Whilst this is undoubtedly a factor, the Claims Monitor shows some other clear themes emerging, present even before the recent dip in claims service levels.

CPM data shows that brokers are placing increased emphasis on the importance of people aspects, with ‘relationships’ moving to top of brokers list of needs.  The implementation of technology, especially ECF, by contrast is now very firmly seen as ‘business as usual’.

We may also however be seeing early signs of a more worrying trend;  a backlash against the consequences of that technology implementation.  Increasing numbers of brokers express real concern that insurers are becoming over-reliant on technology and process (‘hiding behind ECF’) to the detriment of quality relationships and a hands-on approach.

Brokers are very vocal about what they want:

“They hide behind ECF, they don’t like the broker to see them. For me face to face contact is important. My skills are in negotiating and face to face contact, that is what I have been doing for 12 years, but they just want you to put things on ECF.”

“[We want] more dialogue as we hardly ever hear from them due to ECF.”

“They need greater broker focus. Concentrate on where the business is actually coming from and develop more lasting relationships with brokers.”

Knowledge is also important. Brokers want to get closer to the claims teams that they deal with:

“We know one or two of the more senior people, but there is a broader team we don’t know so well, so we would like to get to know the full capability and depth of their team.”

“They need to be a little bit more transparent in terms of their service delivery, to make it more obvious where they’re coming from, more transparency overall.”

If this is more than a quarterly blip and becomes a growing trend then claims teams will have to think very carefully about how they are going to service brokers going forward.

In future articles we will look further at what these challenges are and what claims teams can do about them.