Insurer plans to cut claims outsourcing
A top Lloyd's chief executive blasted claims outsourcing as inefficient.
Beazley chief executive Andrew Beazley said this week that outsourced claims management was inefficient and that Beazley would be cutting its number of advisers.
Beazley's criticism came as the Lloyd's insurer announced a pre-tax profit of £22.2m for the six months ended 30 June. This is a nine-fold increase on the 2003 half-year profit of £2.5m. Gross written premium increased to £211m, against £162m during the same period in 2003.
Beazley said: "The industry in general tends to outsource its claims through the use of loss adjusters and lawyers, but we believe there's not true efficiency in that model," he said.
Beazley added that the insurer would be "reducing the number of third party advisers" it used on claims.
A managing director of a rival Lloyd's insurer said that though his company was not currently looking to alter its claims processes, Beazley's proposals made sense. "Beazley has a good point. Claims are our biggest item of expenditure and there is room for improvement," he said.
Earlier this year, Lloyd's began a review of claims handling processes with consultant McKinsey.
Lloyd's said this week that the review had moved on to its second phase. A spokeswoman said there were benefits to be secured via better claims management procedures.