Poor claims service must be rectified to avoid doing serious damage to the insurance industry, as policy T&Cs and premiums still lag behind prominent claims trend findings

By Stuart Reid

Stuart Reid

Stuart Reid

One of the most disappointing things with our industry is when it is common knowledge that some part of the market is not working correctly, but it is deemed too difficult to make any changes.

No one works in a perfect world, but who was actually surprised with the imposed reform of property insurance? Or that the FCA found that a certain section of guaranteed asset protection (Gap) sales were undertaken unfairly by some distant third parties? Or were shocked by the failure of certain passporting insurers we all said would fail?

To those that bemoan any government or regulatory intervention, it is they we should be thanking for righting these wrongs – eventually. Our industry should have, at times, been better at sorting its own issues.

Insurance actually has a better reputation than many believe – especially across those that work within it. But if we carry on the way we are now, with service and claims service continuing to spiral in a downward trajectory, then we are in significant danger of doing serious damage to our industry.

Slow burn changes

For years, I have owned a Range Rover vehicle and lived in London. I have had two cars stolen – one some years ago and one quite recently.

It shocked me that everyone inside and outside of our industry knew for years that Range Rovers were a high theft risk, but any changes in insurance cost, security conditions and policy terms took ages to develop – despite the number of cars lost.

Range Rover was presumably happy every time a car was stolen and they got an order for a new one. While insurers’ physical security demands mentioned in car cover for these vehicles began to slowly tick up, associated premiums and policy terms took much longer to harden.

Now, many years on from the onset of this problem, the best quote I could get this year had an excess of many tens of thousands of pounds, with a premium to match. I now drive a different car.

The claims service I received for the recent theft from Aviva Private Clients and broker Partners& was exemplary and deserves to be called out.

The cynics out there will no doubt say that of course my claim went smoothly, noting the roles past and present that may have influenced my experience. I genuinely don’t believe this was the case, but my experience shows just how claims should work for everyone.

Keeping promises

Insurance Times wrote in June 2024 about whether the term ‘claims is our shop window’ is correct.

Are claims not the product we buy? We sell pieces of paper or a PDF once a year for a significant sum with a simple promise – when a claim occurs which fits with the cover requested, it will be settled and settled quickly. This is the ultimate proof of the product.

I am sorry to say that it appears in many cases that we are not honouring that promise – nowhere near.

What can we do? If your business as a broker or MGA cannot provide the required service, get the answers for clients, or have the right knowledge and clout to deliver, then go to professionals that can do these things, who are qualified, who have the contacts, who get the service from insurers you and your clients dream about.

If you are an insurer, then it is your product and the buck stops with you.

The FCA, monitoring the increasing number of complaints, will no doubt be taking a forensic look at the differences between the promises insurers make and the actuality of the service given.

Whatever problems insurers plead in their defence, if they cannot get the settling of claims right, then they should not be writing the business. And if this situation continues, there is one way that brokers and MGAs can ultimately resolve the problem – by placing the business elsewhere.