R&SA is taking a bold step by halting delegated authorities for brokers, says Andy Cook
Royal & SunAlliance (R&SA) is daring to be different. Very different. It is carving out a niche as the insurer which is focusing on improving claims performance by bringing claims handling and loss adjusting in house.
While most of R&SA's competitors are attempting to achieve underwriting profit, R&SA is attempting to spend less on claims and associated expenses than anyone else.
To this end, the insurer plucked PCS from the ashes of Independent Insurance last year and has been telling its contracted loss adjusters that they will be used for overflow work and special risks.
Now R&SA has taken another big step. It is aiming to take away all delegated authorities for claims settlements from its brokers (see news section).
Has it overstepped the mark? Most brokers like delegated authorities. They often want greater limits for settling claims without involving the claims departments of insurers rather than smaller limits or no limits at all. Brokers thrive on high service standards and are wary of the big insurers' production line mentality when it comes to claims.
As much as brokers might not like R&SA's plans, there is little they can do to resist them. Capacity is so short, that very few brokers are in a position to resist a player of R&SA's size. It is also worth noting that R&SA is best in class when it comes to claims.
So the best option may be to give in gracefully. Set high service standards on behalf of your clients. And then sit back. If R&SA starts missing the mark then it may be time to take up the fight.
