Claims. They are the highest expense for all (re)insurers and also where they are judged by their customers. Do it well, and the costs are manageable and policyholders happy. Do it badly, and the opposite can happen.
The problem is that the one thing I’ve learnt in my 24 years of being involved in delivering claims solutions to clients of all shapes and sizes is that there are varying levels of bad.
Here in the US, for example, the average third-party administrator (TPA) has set a pretty low bar in recent years when it comes to claims administration by lowering expectations and making a bad service seem okay and a very bad service not look bad enough.
Unfortunately, many London market (re)insurers have felt compelled to trust the devil they know rather than shop around. They fear if they – or their coverholders – move then the service could get even worse.
“The one thing I’ve learnt in my 24 of years of being involved in delivering claims solutions to clients of all shapes and sizes is that there are varying levels of bad”
Well, it’s time for a shake up and for a new standard of TPA service to be introduced to the London market.
What became clear following the devastating impact of Hurricane Ida – a loss which has been revised upwards once again by the Louisiana Department of Insurance to $12.1bn as at the end of March – was that there were too many loss adjusters and TPAs out there that were, quite simply, out of their depth.
In fact, I read recently in this publication the Louisiana insurance commissioner Jim Donelon saying he would give the industry a “C” in grading its claims handling response to Ida and other storms.
When it comes to these large storm losses, experience is king – especially as both the frequency and severity of cat events are on the rise, triggering bigger losses and more urgency around claims being settled both efficiently and professionally.
At TheBest Claims Solutions, we are only as good as the talent we have representing us, so we are committed to recruiting and training the people in our network at the highest level. Our aim is to offer the best service and raise the TPA bar – which urgently needs to happen so that claims handling can go up from a “C” grade to the “A” it should be.
Our continuous search for the best people means we have a huge selection of talent within our network to match the full spectrum of risk we look to serve.
Which, of course, is increasingly including new risk areas, such as cyber and other specialty risks which require specialist skills and experience.
“When it comes to large storm losses, experience is king – especially as both the frequency and severity of cat events are on the rise, triggering bigger losses and more urgency around claims being settled”
Once, outsourcing was a one-size-fits-all proposition. Now, it’s about being in a position to confidently offer a highly tailored and scalable approach, bringing in specialist people, supplying frequent claims analysis data and even, on occasion, setting up dedicated offices close to the client.
But what are the motivations to outsource and what should the key considerations be in selecting the right partner?
First, customers should rightly be looking for greater transparency at every step of the customer journey. This is essential and will also help remove unnecessary duplication and operational inefficiencies – of which, there are plenty.
Secondly, outsourcing partners must be doing as much as they can to streamline the process, from first notification of loss through to final settlement and closure and this will come with working with talent with the right experience.
And thirdly, the customer should always be at the heart of the approach of any claims process.
In addition to being a few of the core principles we hold at TheBest Claims Solutions, these principles also resonate with Lloyd’s focus on the claims handling process which is, in part, why we’ve turned our attention to this market.
With over 13 years’ experience working with the London market, we are keenly aware of the unique challenges this market faces and how to address them. Need access to real-time data? You got it. Concerned over speed of payment? We have partnered with an e-payment provider to allow for immediate transmission of funds.
We view our client partnerships as a long-term proposition, in good times and not so good times. In short, we’re accessible, responsive and take ownership of the claims process.
We know change can be hard. But sometimes you just have to rip off the band-aid and move on. We don’t settle for “just OK” and don’t want our client partners to either.
Brad Dunlap is founder and CEO of TheBest Claims Solutions