Are brokers missing a trick by not establishing their own claims functions, especially in light of continuing supply chain and communications challenges insurers are experiencing?

By Editor Katie Scott

It is a truth universally acknowledged that claims are the shop window of the insurance industry; the pinch point where customers finally sit up and take notice of the policy they have purchased and the protection it affords them.

Katie Scott_bw_path

Katie Scott

Following Storm Eunice last weekend and Storm Franklin earlier this week, I’m sure that many policyholders will be reviewing their terms and conditions in a bid to clarify cover for storm-related incidents, such as flooding or damage caused by strong winds.

While the overall impact on the industry – financial or otherwise – of these events have yet to be calculated, one claims professional has hinted at possible difficulties around handling these claims, telling me that supply chain delays and raw material costs are still hampering claims processes.

Pair this with the fact that Storm Eunice was a surge event occurring at a weekend, when out of hours teams typically man insurers’ phones, and my claims professional pal informs me that patchy handover communications with weekday staff could provide yet another pothole for a bumpy claims ride.

Additionally, an insurer leader recently told me that claims practices today leave much to be desired, with complex models confusing customers.

Could it be time, therefore, for more brokers to step into the claims breach and help smooth service strife for end customers?

Missing out?

For Toby Clegg, chief executive of Lloyd’s broker Clegg Gifford, the answer to this question is a resounding yes.

Earlier this week, he told me: “Too many brokers step away from an involvement in claims.

“Even on the London market side and Lloyd’s, there seems to be a desire just to walk away from the problem and focus on the broking activity. [It is a] great shame. I think [brokers are] missing out.”

Clegg said that Clegg Gifford invests heavily in its claims function – its claims team now boasts 50 members of staff, “which is pretty unusual for a broker, but it’s central to what we do”.

He continued: “Ultimately, we want to know what’s going on because that gives you better representation of the client and also the insurer.

“You can sit in Lloyd’s and say these claims – and there may only be a handful in a whole portfolio – but if you know them in intimate detail, you can better represent all sides and that is key. A lot [of brokers] just don’t do it.”

He added that capacity providers are also more likely to listen to brokers that have a handle on their clients’ claims.

McCarron Coates is another broker that has invested in the claims piece.

In December 2020, for example, it hired a claims manager. At this point in time, the broker also planned to launch a “claims app for our drivers or our commercial clients to report claims to us 24 hours a day, seven days a week” in early 2021.

Considering that claims is such a visible and important part of customers’ insurance journeys, it does make sense for brokers to get more involved – especially following the vast number of commercial clients who turned to their brokers for guidance around business interruption claims brought about by the Covid-19 pandemic.

Providing a decent claims service and supporting clients here could, therefore, be a key differentiator for brokers moving forward and also help repair flagging consumer trust in the sector.