However, the sector is already returning to in-person visits so clients can access ‘the hands-on, professional approach and experience of an adjuster’
The cost of claims within the high net worth sector (HNW) is on the rise due to “a sharp increase in building costs caused by supply chain limitations and increased household demand”, according to Mark Pierce, operations director at loss adjusting firm Criterion.
Speaking exclusively to Insurance Times, Pierce explained: “The cost of claims has been increasing because of a sharp increase in building costs caused by supply chain limitations and increased household demand in building materials.
“What’s more, the coronavirus-induced shutdowns of factories and more people working from home has only added to the problem.”
Reassuringly, however, “this sort of spike in claims costs is usually temporary”, Pierce added, because “commodity and material prices will eventually stabilise as demand reduces and [more] people return to an office-based environment” following the easing of lockdown restrictions in July.
Perhaps influencing this increase in HNW claims costs is the fact that “the profile of HNW claims has undoubtedly changed” as a result of “more people working from home over the past 14 months”, Pierce continued.
“The value and volume of theft and water damage claims are down. However, fire related claims for HNW clients have been marginally rising, mainly driven by [the] increased use of electricity supply and device usage,” he said.
Face-to-face again
Although prime minister Boris Johnson has moved the goal post for the last deadline on his road map exiting lockdown, Pierce said that “physical visits in the HNW space are almost back to normal”, despite widespread adoption of “digital technology” while in lockdown.
He continued: “We have all faced new challenges on how we continue to be there for HNW customers and brokers and help them navigate any extra barriers that the pandemic has created during their claims journey.
“The lockdown period has clearly seen an increased use of digital technology. However, physical visits in the HNW space are almost back to normal, as clients seek the hands-on, professional approach and experience of an adjuster to handle their claim.”
Not only are physical meetings proving beneficial for HNW customers, but Pierce added that it is also good for industry professionals.
“Happily, Criterion is back meeting brokers and insurers on a face-to-face basis,” he said.
“It’s great to be able to meet industry colleagues and friends again after such a long time period.
“We all know that the insurance industry thrives on networking, sharing ideas and having great conversations.
“It’s been great to use virtual meetings through the lockdown, but there’s nothing like meeting people in person to build lasting relationships.”
Focusing on 2022
In terms of the broader insurance market, Luigi Maggio, director at McCarron Coates, added that “2022 will be interesting” following the UK’s exit from lockdown this summer.
In particular, he feels that the transition out of lockdown in quarters three and four will be something brokers are “going to have to look at closely”.
He said: “I expect that when furlough actually ends, there may be a wave of more job losses and businesses unfortunately going into liquidation - there is a bit of a wait and see.
“2022 will be interesting. We’re quite a resilient economy, so I would expect us to see our way through it.”
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