Altus Insurance whitepaper spreads - Flipbook - Page 8
Your journey planner for good
claims management
Chapter Summary
• The insurance industry, particularly with the influence of price comparison websites, generally markets
and competes on price, rather than service.
• There is still a perception that insurers will look for ways to not pay a claim, due to a lack of trust in the
industry.
• There is no one-size-昀椀ts-all approach to claims, but there will be common elements that are key to a
strong claims service for the customer. They can be broken down in di昀昀erent ways, and in this paper we
consider the following factors: Understanding of liability; Communication; Fairness; Prompt Settlement;
Management of Expectations and Empathy.
• Claims functions operate in an evolving legal and regulatory environment. In the last two decades, we
have seen the introduction of FCA’s Treating Customers Fairly (TCF), statutes aimed at bringing insurance
law up to date for consumers, and a regulatory approach to consumer outcomes which is culminating in
the introduction of the Consumer Duty.
• Claims can be a di昀昀erentiator for insurers, providing the opportunity to exceed customer expectations
and increase customer retention.
• In this section, we also introduce a high-level view of the claims process which provides the structure
behind our approach, guiding the development of a target operating model later in the paper.
What does it mean to manage a claim fairly and in a way that delivers good
outcomes for customers? For most, the ful昀椀lment of a claim simply means
the insurer has delivered on the promise they made when the product was
bought. It is the crystallisation of the protection the customer has paid for,
the end result of the trust they have placed in their insurer to put them back
in the position they were before the claim.
Delivering on your promise
Unfortunately, that crucial trust is low in insurance
with one survey showing that only 21% of respondents
considered their insurer trustworthy, despite the
fact that, for example, UK motor insurers are paying
around £8bn to £10bn in claims every year6.
If insurers are paying out on nearly 100% of claims
made, why does the perception that insurers will 昀椀ght
every claim persist? The answer, lies in the experience
customers have of making that claim, paid out or not.
It is true to say that customers may not always think
about this promise to pay at the point of purchase
but that is largely down to the fact they have been
‘trained’ by decades of price-sensitive marketing from
insurers and price comparison websites to place the
greatest emphasis on the cost of the policy.
This has long been seen as a misleading approach to
evidencing the value of insurance particularly when,
in such a complex area of insurance, there is no such
thing as a one size 昀椀ts all approach - for products, for
customers, for handlers and indeed, for insurers.
However, to lean on the inherent complexity of insurance
to explain the lack of consistency and service delivered
in claims across the market would be to duck the issue.
There are of course commonalities across the
industry, particularly within speci昀椀c lines of business.
For example, basic levels of service will be demanded
by a combination of regulation, legal precedent and
the intervention of industry bodies, such as, the
Financial Ombudsman Service (FOS), the Association
of British Insurers (ABI), Chartered Insurance Institute
(CII) and the Forum of Insurance Lawyers (FOIL), from
which best practice o昀琀en emerges.
However this best practice manifests itself, it remains
the basics of good claims management. What it
can’t and won’t do is advise insurers of their claims
philosophy or the values they hold that inform claims
decisions. But it is these two elements, properly
understood and applied across the organisation, that
will allow an individual insurer to make their claims
service a genuine point of di昀昀erentiation and to act as
the marketing tool it should always have been.
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6
https://www.abi.org.uk/news/news-articles/2023/6/keeping-motorists-mobile---motor-insurers-payouts-up-14-over-the-last-year/
