A customer’s bad claims experience and the overall reputation of the insurer can have a correlating impact on claims costs, agreed expert panel
“When you have grumblings from customers that they want to leave because of a poor claims experience, that is a hidden cost that doesn’t always get highlighted.”
Peter Emson-Sewell MS Amlin
“The claims department and claims department’s supply chain is the heartbeat of any insurance company. We are what the policyholder is buying; it’s how we react, where we make the most difference, so when we look at the true cost of claims, we should always be considering our reputation.”
Peter Edgar RSA
In terms of other factors that influence claims costs, Edgar noted investment in insurtechs, while Emson-Sewell said there could be hidden operational costs within governance requirements, for example around staffing and system costs. As this isn’t tangible as such, it can be difficult to predict, he added.
According to Vater, there are challenges ahead in terms of factors that could drive claims costs – primarily, of course, this is centred around Covid-19. For example, Vater said accurate forecasting around claims volumes has been tricky and there are also coronavirus claims themselves to consider.
Equally, the FCA is “bearing teeth”, he said, noting the additional compliance costs that may surround dual pricing actions.
Katie Scott Insurance Times Ist December 2020
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Ai has its place in counter-fraud but remember that criminals and professional opportunists can also leverage AI and be a step ahead. Automation is an ideal place for fraudsters to seek out vulnerable processes and workflows.
"Fraud is also still a prominent issue for the claims sector, noted Gordon Vater, director of the carrier practice at Gallagher Bassett. He said he has seen an uptick in fire claims for out buildings that allegedly contain a lot of contents as well as some “dubious” claims from SMEs around retail premises.
Furthermore, BI claims are also being affected by potential fraud due to financial desperation caused by the Covid-19 pandemic – Vater added that claims management companies could assist insureds in getting their claims paid, however this could lead to inflation."
Katie Scott Insurance Times
That is where end to end claims platforms like 360SiteView make the difference.
Insurers need to look to their reputation and to delivering a good claims experience if they want to mitigate any “hidden” claims costs within their business, said Peter Emson-Sewell, delegated claims, process and governance lead at MS Amlin. Speaking at a webinar hosted by Gallagher Bassett, titled ‘Opportunities and outcomes 2021: Understand the true cost of claims for insurers and improve financial outcomes’, Emson-Sewell said that an insurer’s reputation clearly correlates with its claims costs, making it something that more businesses need to bear in mind. He explained: “The claims experience is a shop window for most insurers these days. There are narrower and narrower differentiators between insurers, so it really comes down to that service provided.
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