Insurers urged to focus on claims and tailor-made solutions

German risk managers believe insurers have much room for improvement when it comes to claims and tailoring solutions to meet client needs. Jörg Henne, managing director at GVNW, said claims is an area where “insurers still have room for improvement” and that they need “to take more seriously”. Insurers don't seem to realise that insurance claims of a certain size are a board-level matter, he said. “Day-to-day business is rarely on board level, but a claim is immediately on board level and they [insurers] need to perform. In the end, if they don’t the CEO will say, ‘I don’t like this insurer and don’t want to work with him’, and you need a lot of argument to convince the board that they should use that insurer again,” he said. Fellow GVNW board member Christian Böhm said one of the most important qualities of an insurer is its willingness to pay losses. “It is not about expertise only, but also about willingness,” he said. The GVNW board members taking part in our Risk Frontiers Europe survey agreed that the German approach to claims is a little different to elsewhere in Europe, notably the UK. “In Germany, when you pay premium you acquire the right to get it paid, but in London you acquire the right to negotiate to get it paid,” joked one. Mr Böhm added: “When we buy an insurance policy, we are also buying a commitment for the insurer to settle a claim and not a service provider, a law firm for example. For us it is very important that we deal with them directly. We want to see the whites of their eye, not to have an intermediary.” The risk managers agreed this is an issue that could see them switch insurers. They also stressed that insurers need to offer tailor-made solutions, particularly to the largest groups where risks and insurance programmes are most complex. “Insurers say they need more money to make the sector sustainable, but they shouldn’t need the same price increase from each and every insured. That’s not right. Even within one sector we have very different needs and very different claims experiences,” said GVNW board member Antje Mertens. “They have to look on a tailor-made basis. It is a big topic for us – being able to talk about our situation. We want insurers to earn money otherwise they will not be there anymore. But we want to pay what is adequate for our risk,” she added. This is one of the reasons why the risk managers agreed it is difficult for insurance to fall under the procurement teams’ remit. “Insurance is not a commodity and that is why we have argued successfully that it should not be a procurement function. There are a number of factors, which are not just about the price but the way we procure insurance,” said Alexander Mahnke, president of the GVNW. “But if insurance was to be more commoditised, I would argue it should be part of the procurement process,” he added. Mr Böhm is not even sure that procurement teams actually want the job. “With my former employer, I had an experience of this. We had a procurement guy asking about our processes. His first question was, ‘how long is the procurement period each year?’, and I said, ‘365 days’. He said, ‘oh I won’t be able to do that’. The truth is that insurance is no commodity but a tailor-made solution. You need special skills that the regular procurement guy does not have,” he said.

Insurers urged to focus on claims and tailor-made solutions

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