The modern broker must become a claims champion
OUTSOURCING - 1ST JULY 2007
Caroline Jordan says that brokers should see claims as an integral part of not only their business but as part of customer service.
There are plenty of brokers out there who are claims champions. But, wanting to do their best for clients and having the required resources is not easy. Even so it could be argued that those who are only interested in bringing in the business are missing a trick.
If a broker employs its own claims people, it has decide whether to staff the division up properly or perhaps go for one experienced individual who will be limited in the time they can give, but still act as point of contact.
No one needs reminding that regulation has imposed a heavy cost burden on brokers and they may feel it is either more worthwhile or essential to spend you funds on broking and business development people rather than on a claims team.
But, Lloyd’s broker Cooper Gay looks at I another way. It has some 20 dedicated claims staff and director Peter Dalton comments: “We’re handling a wide range of claims including property and marine and much of its international business.
“We are punching above our weight, it could be said, but we also see it a selling point. In fact our new marketing literature will draw more attention to what we can offer.
“It’s becoming apparent during the tender process that more clients want to know what will happen if they have a claim. We can show them we have the people and capability to do the work.”
Soft market
It has been suggested that the soft market and the reduction in profits has led to insurers to take a tougher line on claims. They are rejecting more and “losing” documentation to stall making payments, while trying to find reasons not to pay.
Dalton comments: “An in-house claims team can feed vital information back to the brokers. I have said there are some syndicates and insurers who have bad service and are far too willing to turn down claims. On the other hand, there are others I could name such as Amlin, that are fair. This has to make a difference when the broker selects the carrier – and of course we also keep a close eye on an insurer’s security.”
Dalton explains that he, or a member of his team, could well attend a pitch with broking staff. But, there are other brokers who will be far keener to push claims work directly onto the insurer – or they may have outsourced the facility. Dalton questions whether this is wise move.
Last summer, broker Aon signed a £230m outsourcing deal with Xchanging, the business processing services company. The 10-year service contact started last September.
Some 500 Aon employees were transferred from Aon to Xchanging in a deal involving client operations – handling current and legacy insurance claims administration and processing, as well as accounting and settlement for clients within Aon’s reinsurance division and its specialist and wholesale units.
Time will tell if the service is up to scratch, but Dalton believes there is no substitute for in-house expertise.
Robert Blackman, the manager responsible for claims recruitment for consultants Joslin Rowe also says outsourcing is not necessarily a guaranteed recipe for success. “Right now we have a large number of opportunities for claims professionals within brokers. More firms seem to see a strong claims operation as being a key way of retaining clients.”
He says claims has left behind the image that it was somehow secondary to underwriting. “If anything there is a view that the work is more satisfying an technically challenging. We are also seeing more graduates look at claims.”
He says jobs on the books for claims people within brokers offer salaries from £20,000 to in excess of £100,000 for a claims director.
But, smaller brokers clearly are less likely to be able to offer such a hands on service. Nevertheless, some do see a key function of their role to be offering support in an hour of need.
Fair service
Simon Burgess, managing director of British Insurance, says he has come down hard on several insurers if they have refuted or been tardy in paying claims. His firm specialises in payment protection insurance – a sector which has a tarnished reputation, particularly when cover is sold direct.
“In most personal lines areas, a broker will not need to get involved. The insures should have good in-house processes and when it is a low value commodity product a broker may only have limited time to assist.
“But, on several occasion I have put pressure on an insurer or syndicate – I make no bones about it – we will threaten to move business if we are not satisfied with the claims service. And, in the case of a borderline claim, I would also urge the insurer’s claims team to look at the overall book of business. If it is generally performing well, then we will tell them to pay up.”
He adds that he has also threatened, or made, complaints to Lloyd’s or the ombudsman if he feels the customer is being unfairly treated.
And, Rod Lynn partner with small broker Scullard & Prosser, adds: “We always try and recommend clients take out good quality legal expenses cover because having a legal expert on your side can be of valuable support – and we are always there to help too.
“Out clients know someone with a friendly voice is available to help and that includes chasing an insurer or adjuster to find out what’s going on.
Brokers’ role
Meanwhile, Steve Foulsham, technical services offer for trade body Biba comments: “Brokers have a big role to play in claims. I deal with a lot of calls from members of the public and it turns out a lot of these are from people who have bought direct and are struggling because their insurer has a call centre in a remote location which is not providing the service.
“Added to this, you have loss adjusters who are under pressure and increasing desk-topping to win business. This again worsens service. I know it is tough for brokers to dedicate the resources but it really can pay off in terms of client satisfaction.”
He adds that Biba offers members facilities to bump up their claims service such as preferential rates with ISS Damage Control for fast clean up, in the event of a claim and loss recovery insurance with Lorega.
This provides an adjuster who works for the policyholder. “The switched-on broker sees claims as a tangible way of proving their worth – and they are not afraid to take on an insurer if necessary.”
