Proactive third-party claims handling is essential for a corporate body to protect its brand, to ensure customer retention and to reduce costs. The field of third-party motor claims is a prime example of how effective management of the risk portfolio by claims and risk management specialists cuts costs, minimises exposure and adds value for the corporate client.
For many corporate clients, especially those who are household names, every third-party member of the public is a potential customer. Therefore, if a lorry owned by a supermarket runs into the back of a car, the way the third party is treated in the ensuing claims process will affect their opinion of the retailer and, ultimately the value of the brand.
Good claims management firms treat each third-party claimant as if they were the first party. Retail organisations with a high profile cannot risk creating bad feeling in the sensitive circumstances of an insurance claim.
Another area where a risk management specialist can add value is in controlling the repair process. By bringing the repair of the third-party vehicle into their own repair network, the specialist controls the scope of the work done. Scope can become an issue when a third party seeks a quote from a repairer which includes areas of damage not caused by the client. Costs are also controlled within the network, as competitive rates covering parts, materials and labour have been agreed in advance. The network relies on a significant throughput of business from the third-party administrator, therefore the whole approach to business is based on fairness.
While the third-party's vehicle is off the road, good firms can assist with car hire. Credit hire companies often provide the highest specification car possible to the third party by controlling the scope of the vehicle provided and utilising highly competitive rental arrangements with national hire companies. This keeps hire costs to a minimum while ensuring the best vehicle for the customer.
Additionally, as vehicle repairs are treated as a matter of priority, work can be completed within days rather than weeks, all of which results in significant savings.
Treating the third party as a first party brings savings for the client in other ways. There has been a marked drop in the number of injury claims being made in relation to third-party motor incidents by using this process, clearly connected to the good treatment given to claimants. Additionally, as claimants have no need to seek professional advice, the cost of third-party fees is reduced.
When the claim is handled fairly and honestly, the third party is less inclined to make an injury claim or to get solicitors involved in legal action.
Savings can also be made in VAT. It is possible to instruct the repairer on behalf of the client and present the client with the invoice. VAT can then be reclaimed as being incurred in the normal course of business and deemed as a service provided to the third party.
Ultimately, you are the custodian of your clients'risk portfolio budget and must consider every possible way of managing the risk and reducing the impact of claims on the corporate fund.
