Insurers take too long to settle claims, says Martin Oliver

Barbon chief executive Martin Oliver wants to take more claims handling authority away from insurers because he is “disappointed” with the time that it takes to settle claims.

In an interview with Insurance Times, Oliver said that Zenor, the insurance group’s managing general agency (MGA), should have more control.

“I’m disappointed by some insurers’ claims-handling skills and the time that it can take to settle. We are looking to take more authority for claims from insurers. A full MGA model allows that to happen more easily,” Oliver said.

“It’s your book, you should look after it, you should make sure that it is profitable. The best person to do that is yourself, not an insurer, who has hundreds of other books to manage. It’s all about focus.”

Zenor’s gross written premium was £11m last year, with £1m of growth. The MGA's capacity providers are Aviva, Zurich and Groupama.

Across the group, Oliver said that the property specialist is set for another good year of results.

Barbon should finish this year with earnings before interest, tax, depreciation and amortisation (EBITDA) rising from £13m in 2009 to £15m, and total turnover growing 2% to £50m.

Oliver estimated that the company could add another 10% to earnings in 2011, taking EBITDA to £16.5m. Looking across the industry for the year ahead, he warned that inflation would cause problems, especially if rates remained low.

“We don’t see rates going up,” he said. “Inflation is running at 3% or 4% so your costs are going to go up, but you can’t anticipate that your income is going to grow.

“Therefore you’ve got to be more aggressive with new business, and you’ve got to be more effective at cross-sale, which is something we’ve had huge success with in the past few years.”

Oliver said that Barbon had funding in place for acquisitions. Ideally, he would like to buy a business with a large property book and enterprise value between £5m and £15m.