Aon’s global chief claims officer Neil Harrison has urged insurers to cut back on some of the claims information they demand from clients, which is causing mounting frustration and increasingly delaying payouts in the hard market.
He said that reducing data requests to those items specifically needed to assess coverage and quantum will remove frictional costs from the claims process and benefit all.
Mr Harrison told Commercial Risk Europe that there have been more claims challenges in the hard market. Although the majority of claims are being resolved and many outcomes are positive, the process is being perceived by clients as increasingly difficult, he said.
“I would say the outcome is still achievable and results are pretty much what we saw in the past, but the journey or the process is the pain point right now… it is more difficult to get that payment, so insurers are losing the goodwill that comes from a positive claim outcome, because of the number of information requests that our clients have to go through,” said Mr Harrison.
“I think in some ways the current market is proving that the level of information that insurers sometimes ask for on an individual claim is often beyond what is really needed to validate the coverage and validate the quantum. So we have been working with insurers to say, ‘ok, we understand your need to review detail, but let’s define detail and keep it to the relevant items’. So, maybe they need answers on eight questions rather than 30. We are trying to take that frictional cost out of the claims process to get to the outcome quicker,” said Mr Harrison.
Adding: “So, the real claims issue at the moment is more about the journey, rather than the outcome.”
Mr Harrison also called on all stakeholders that would be involved in a potential claim to sit down during renewal negotiations and work out exactly who would do what if a claim situation occurs. He said retroactively building this process after a loss and corresponding claim needs to be avoided, and is a systemic issue that must be addressed.
“The key is understanding what the claim process is before you have the claim. I wouldn’t go as far as to say everything needs pre-loss scenario planning, but I would say that all of the stakeholders in the market would be well advised to sit down at renewal and say, ‘if you have a claim, here is who’s going to do what, this is what you need, this is the process, this is the nominated adjuster and these are the law firms that are going to be involved etc’. Otherwise, you lose a lot of time in the process after the claim by retroactively building the project plan. That, for me, is the systemic issue we need to better address,” said Aon’s global chief claims officer.
“If we aren’t all putting the same amount of resources into the same task through duplication of work, we free up resources, so on the insurers’ side they can actually make the coverage decision more quickly. There are definitely some process improvements at a macro level that we can make. But it requires insurers, adjusters, brokers, lawyers and policyholders to all spend a bit of time on the topics before, and outside, the drama of an actual claim,” he added.
Mr Harrison said taking this approach helps build relationships, which, at the end of the day, are extremely important in any claim situation.
Commercial Risk is hosting a Claims Management Conference on 27-29 April 2021. We have worked with a number of European risk management associations to bring together a group of experts in a virtual forum to discuss how best to adapt to emerging long-term risk trends and explore the type of claims patterns that these new exposures are generating. Click here to secure your seat at the event.