German brokers critical of claims handling standards and rise of pseudo-intermediaries-VDVM

Members of this German brokers' association, which has close to 700 members, among them the market heavyweights Aon and Marsh, also voiced concern over a number of insolvencies in their own ranks and the fact that too many pseudo-brokers, that in reality only represent one insurer, are registered in the country. "We have more than once highlighted the problems of claims handling", said VDVM chairman Peter Wesselhoeft of Gossler, Gobert and Wolters. "We have to deal with call centres manned by staff who are insufficiently trained and have difficulties reaching the right people." Even with large fire claims, brokers are sometimes unable to pass information to an insurer. "We have seen that insurers' staff are giving us their private email addresses in order to get information, because otherwise data goes through internal processing and is being dealt with by other people," said Sven Erichsen, General Manager of Aon Deutschland.hideMr Wesselhoeft said that there are more and more complaints by VDVM members over claims handling, often because of practices that go against the interests of insureds. "In this light, the recent argument of a large insurer that claims handling is always a top management task raises questions," Mr Wesselhoeft added. "Do insurers really want to change the current unsavoury situation?" he asked. Aon manager Mr Erichsen said that claims' handling sometimes appears to be carried out under the mantra that 'the claim is not insured, we will find a reason somewhere'. "We sincerely hope that this trend will turn again, in the interest of industrial insurance customers," he said. VDVM chairman Mr Wesselhoeft said that two regional groups of the association had made progress in agreeing standards with insurers in this area, ranging from access to the right people to reaction periods after a claim. They introduced a traffic light system (red, amber, green) on their internal website showing brokers how far an insurer had progressed with the claims process. "The market pressure resulting from this classification leads to larger insurers participating, too," said Mr Wesselhoeft. He also said that there had been a number of broker insolvencies in 2011 and 2012, causing financial losses for insurers and in one case for customers. "For the image of our profession and the trust that we enjoy this is devastating," he said. In a number of cases, brokers had collected premiums or money for claims and had used it for other purposes. "We in the VDVM are in an intensive discussion with our members about how we can ensure that third-party funds are not being used for the brokers' own operations," Mr Wesselhoeft said. He was highly critical of the fact that Germany's intermediary registries-which are kept by local chambers of commerce-now show that the country has 46,000 brokers, in addition to 200,000 agents. He complained that the registry did not check whether the brokers had commission agreements with several insurers. Many of them had such an agreement with just one insurer, and thus did not qualify for the broking profession where players require a certain market overview when advising clients, he said.

German brokers critical of claims handling standards and rise of pseudo-intermediaries-VDVM

Want to read this article?

Read Next

CSDDD a ‘milestone for responsible business conduct’

Shifting climate litigation against corporates and D&Os ripe for growth

New Africa-focused syndicate launched at Lloyd’s

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

CSDDD a ‘milestone for responsible business conduct’

Shifting climate litigation against corporates and D&Os ripe for growth

New Africa-focused syndicate launched at Lloyd’s

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

Want to read this article?

Read Next

CSDDD a ‘milestone for responsible business conduct’

Shifting climate litigation against corporates and D&Os ripe for growth

New Africa-focused syndicate launched at Lloyd’s

WTW and Riskonnect partner on risk diagnostic tool

AM Best upgrades outlook for UK market and expects further rate hardening

Related Articles