Editors comment – Claims: Give it equal billing

But insurance is about peace of mind, and making sure that if a loss occurs, a payment is made. So it seems odd that very little time seems to be spent on claims at the beginning of the process, which ultimately means that twice as much time and effort is expended once a claim comes in.

As one expert at a multinational insurer put it, “there is only ever a few minutes spent talking about claims, or sometimes no discussion about claims. It is very bizarre to me, because what we are selling, and what you are buying, is our ability to pay a claim, and particularly for a global programme, the ability to pay a claim in some pretty inhospitable regulatory or economic environments around the world.”

Perhaps it is a superstition thing. If we talk too much about the possibility of claims and what we would do in the event of a claim, it might make it more likely to happen. Are risk managers and their brokers not willing to tempt fate? Or are they involved in a huge game of bluff (‘Let’s not talk about claims, there won’t be any claims, trust me, we’ve risk managed everything, so now let’s talk about a premium reduction.’)

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Whatever the reason, it clearly needs to change. The very first question to be asked of a multinational insurer should be “How will you ensure that claims are paid in the way I want, and in the jurisdiction I want?”

At the same time, insurers should be ensuring that claims people are involved early in discussions. And clearly there is a huge need for claims protocols to be agreed pre-inception. There is even an argument for loss adjusters to be involved at this stage – certainly they believe that the outcome, and the whole process of dealing with large, complex claims, would be significantly improved if they had been in touch with the buyer earlier in the process and before any claim actually arises. This is especially true when it comes to losses impacting health and safety or the environment, for example, where loss mitigation measures may prove vital for reducing the overall loss.

The same expert added, “Claims is a huge topic which is under-estimated, under-valued, and not enough time is spent on it.” In other words it’s time for everyone to recognise that claims teams have an essential supporting role, especially on the multinational stage, throughout the production.