Niche insurance services company Infront Solutions has developed a new approach to managing subsidence claims, which it says can shave up to 15% off the average £8,500 cost of repair work.
Claims costs for subsidence are rising ahead of inflation and total payments last year were in the region of £350m to £400m for 40,000 cases. Dave Moore, managing director at Infront Solutions, said subsidence claims were a minefield for insurers.
“Claims costs are high because too many subsidence claims are accepted at face value by insurers' claims departments – the repudiation rate is quite low.”
Moore said part of the problem for insurers was that their claims departments often lacked the required engineering expertise to validate claims.
This meant that in many cases they resorted to unnecessary underpinning, partly on the advice of cautious engineers, which also adds to claims costs.
To help manage subsidence claims better, Infront Solutions has developed a management information system called Smart (sub-sidence management and risk transfer).
This uses computer modelling to recommend the best course of action in each subsidence claim, leading to a 15% saving on costs and a reduction in the length of claims.
The Smart system is currently being piloted by Axa and Infront Solutions is also using the system for subsidence repair work ordered by Direct Line.