Multinationals need policies to respond both at the central and local subsidiary level, so the claims process is inevitably more complex and they have many different requirements when it comes down to it.
Graham Smart, chief commercial officer, McLarens, says consistency of service, technical delivery and data quality are key elements of a global claims service. He says local customs, practices and jurisdictional requirements must all be respected and observed but the same standard of service is expected, irrespective of where a loss occurs.
“With global programmes, there is always the need to consider the differences in cover between that set by the master policy with that which exists under any local wordings, balancing the requirements of the insurer writing the master with those of any fronting insurer,” he explains. “As ever, regular and effective communication is vital to ensure that there is always a clear understanding of claims strategy, with proper stakeholder engagement.”
James Rayner, global relationship leader, Crawford & Company, believes that when serving multinationals, “you have to harness technologies to deliver a digital claim solution from every stakeholder’s standpoint”, adding: “This includes, for example, communications and engagement between policyholder, claimant and carrier, fulfilment engines that facilitate repair and replacement, or payment-processing engines that provide customers with more accelerated payment outcomes and greater transparency in the claim process.”
He also points to specialist expertise that can be mapped to the diverse and complex risks and strategic demands of multinational clients. “The challenge is to pull all these capabilities and tools together into a seamless and cohesive customer experience that easily recovers from unexpected outcomes or failures in the life cycle,” he adds.
Improving the claims-handling process
There are many ways in which the claims-handling process can be made more efficient and less stressful for all concerned, ranging from early involvement of claims teams to claims protocols.
Perhaps the most crucial is communication, as Andrew Schütte, partner, London, head of reinsurance at law firm Keoghs, points out: “Constructive engagement and good communication between risk management, claims broking teams and insurance claims professionals (including adjusters) makes for smooth claims handling. Agreeing in advance templates for claims reporting, the information insurers need and managing expectations on timescales on all sides can aid this. Good communication by brokers ‘up the tower’ in layered programmes can also reduce the risk of bumps in the road as layers are eroded.”
A common complaint from claims teams is that they are only ever involved with the insured once a claim is presented. Being involved from the inception of the policy can help to facilitate the claims process, as Schütte notes: “We recommend risk managers meet claims leads as well as underwriters during the placement process. Increasingly, claims professionals form part of the insurers’ client-facing team. That is as it should be – claims are where the product delivers value.”
Smart says that advance preparation, and specifically pre-nomination of adjusters, can have a major bearing on how a loss scenario plays out. “When nominated to an account, we will seek to meet the insured’s key personnel and visit major sites to build trust and gain an understanding of the business, processes and business continuity plan,” he says, adding that loss-scenario testing is an important pre-loss activity.
An insured’s engagement during pre-loss planning is often limited to their carrier’s or broker’s claims resources, says Rayner. However, he believes even large companies with experienced risk management processes and business continuity plans can underestimate the complexity of the claims process. “Incorporating the perspective and expertise of a claims handling firm usually strengthens the resiliency of their pre-loss scenarios and response plans,” he says.
“Working with a technical, strategic and experienced adjusting team that understands the importance of planning, timeliness and responsiveness of communication at the pre-loss stage can go a long way to improving claim outcomes. Partnering with an adjusting firm that understands the insurance ecosystem also gives insureds access to data-driven insights, and assurance that a comprehensive plan and team are in place to respond,” Rayner adds.
He adds that adjusting teams will often be involved in pre-loss planning at the inception of the policy, and this includes introductions between the multiple parties involved with a claim, assignment of roles and responsibilities, policy wording reviews to ensure everyone is prepared when a loss occurs, and reviews of locations and any business information relevant to the response.
Claims handling protocols
Pre-loss nomination of adjusters and the establishment of claims handling protocols are vital in the delivery of an effective and efficient claims handling service and something that insurers and insureds see great value in, according to Smart.
“Alongside strong relationships and the establishment of clear communication channels with key stakeholders, the determination of claims handling protocols and pre-nomination of adjusters enable an immediate post-loss focus on the claims response. This allows decisions to be made sooner, both facilitating loss mitigation and ultimately reducing the claim lifecycle,” he says.
However, Schütte warns that a well-drafted claims protocol is no guarantee of well-run claims. “Claims protocols can help set out ahead of time how the claims process will operate. On the other hand, claims protocols that are unrealistic, inappropriate to the claim, or raise uncertainty about their meaning or legal effect can be counterproductive. Sometimes, a five-minute phonecall is more valuable than a five- or 50-page protocol,” he says.
Using the claims data
There is, of course, a vital role for claims data and analysis to improve the risks for multinationals, allowing problem areas to be identified and managed, together with targeted risk improvement spend, as well being crucial when taking risks to the insurance market. As Smart points out: “With resources stretched, meaningful risk data allows insurance buyers to hone in on the issues of greatest significance and implement risk improvement strategies that have the most impact.”
The volume of loss data captured in the claims process has grown exponentially, according to Rayner, and feeding relevant data back to clients, in combination with risk engineering advice, is critical in helping them spot loss patterns and vulnerabilities, mitigate risks and market their risk to insurers in the most efficient way.
“It is essential to capture all relevant loss data in this process, including ‘near misses’ and uninsured losses – not just insurance claims – as this can help companies take risk management actions or obtain insurance coverage proactively rather than reactively. Many multinationals self-insure through captives and the feedback loop created through the capture of this data is mission critical to the performance and value of these vehicles,” says Rayner.
He adds: “Leveraging data from insurance partners and loss adjusting firms can also help corporate risk managers look beyond their own organisations and benchmark their risk management and loss performance against the wider sectors in which they operate. This can help multinationals identify, for example, the types of losses most frequently seen at an industry or regional level, common triggers for large losses within a sector, supply chain bottlenecks or areas becoming more vulnerable to extreme weather.”
Value of technology
Technology and digitalisation are becoming increasingly important in the claims arena, as with other areas of risk and insurance. Rayner notes that the claims process is becoming increasingly data-driven and automated. “As well as bringing improved speed and accuracy to individual claims, this also enables global solutions and the responses to complex multinational claims to be coordinated far more efficiently and cost-effectively,” he says.
“The challenge is to leverage that data to improve customer experience and loss performance, but the adoption of technology and digitalisation means the insurance industry has never been better placed to do this. We have invested heavily in systems and analytics that enable us to aggregate data and glean insights at a macro or granular level, in a way never before possible. By applying AI to that data reservoir, we drive improvements in the claims process much faster than before, while also achieving better outcomes for both policyholder and carrier,” says Rayner.
Smart agrees that technology plays a key part in effective claims management, in terms of media capture, data collection, reporting and analytics. But he notes: “While it also assists with process efficiency, communication and claim calculation, it will not deliver the empathy and the innovative loss-mitigation solutions that a good adjuster brings, nor will it sell policy response, repudiation or conduct settlement negotiations. The foundation of successful claims handling is the ability to build trusting relationships with the claims stakeholders.”