The world and his wife seems to have had something to say about the recent BIBA/ABI spat concerning insurer claims handling and I’m afraid I can’t resist adding my own ‘two-penneth’ to the debate.
Let’s begin by being a bit controversial. Actually, insurers have toughened up the way that they manage claims.
But surely there is little alternative if they are to continue to protect the interests of their policyholders? After all, according to the Insurance Fraud Bureau undetected general insurance claims fraud is estimated to cost insurers over £2 billion a year and adds £50 to the annual costs of each policyholder. So even though insurance fraud might only be perpetrated by a very small and guilty minority, it is a heavy burden borne by the innocent majority and it needs to be stamped out.
So it’s understandable that insurers and brokers have been investing heavily in the resources and technology necessary to help make this happen. And perhaps there’s the rub. Because however slick and efficient any revised processes might be and however well they are embedded in service protocols; they inevitably present some form of barrier. Whether it is automated application checking with follow up, sophisticated claims screening or more than likely both; there is going to be at least some impact on the way that customers’ claims are managed.
Getting the balance right is accordingly critical if insurers and brokers are to remain effective in looking after genuine customers whilst still investigating and prosecuting the fraudsters. We should certainly not underestimate the challenge, for as we’ve learned from BIBA’s research, there will always be examples of things that can go wrong or could have been done better. And in any event, we already know from the Financial Ombudsman that non-PPI complaints are on the rise – up 12% year on year – so there is clearly some work still to be done.
‘Res ipsa loquitor’ you might think. Yet we need to be very careful not to equate the necessary tightening of claims and application processes with the (apparently foregone) conclusion that it then results in more dissatisfied customers. Indeed, market-wide customer tracking research over recent years demonstrates very high levels of satisfaction with motor and home insurance claims handling – while a very significant majority of claimants also believe they are being treated fairly. This should be no surprise either, because insurers and brokers share common ground when it comes to serving customers better. They also share a joint desire to continue to do so as quickly and effectively as possible.
Still, the depth of market feeling during this disagreement was significant and the volume of the resulting media coverage probably means there are some lessons to learn.
Perhaps we should start by recognising that airing such disputes so publicly will undoubtedly shine an unfavourable light on our profession and on the insurance market as a whole and that this takes away from all the good things that we do every day? Shooting first and asking questions later is never the best option. Where’s the value in scoring a few points if it then hurts the market’s reputation universally?
Surely it makes more sense to do as much as possible to protect our collective brand and with this in mind a little more joined up thinking and a bit more collaboration would not go amiss – providing a platform for issues like this before they reach the public domain.
In the fairly recent past the insurance market created a task force of leading players to guard its reputation. Perhaps if such a body were in existence once again BIBA’s research might have been used more constructively to help enhance claims handling and drive improvement. Everyone could have been a winner.
Sadly though, the only victors in this recent spat are probably the trade and national journalists that joyfully filled many hours and column inches promoting a story that at best resulted in a score draw for those involved but was more likely a PR own goal for the market as a whole.
And that seems a shame.