The UK market is falling behing the rest of Europe, says the Lorega boss
When it comes to making a claim, the sad fact is most UK policyholders approach the moment of truth with trepidation. I would wager that a straw poll of how the public felt about making an insurance claim would show many expected the equivalent of a Spanish inquisition followed by a mugging.
Small wonder then that an alarming number of people now regard inflating a claim as completely acceptable. This was highlighted recently in a report published by The Centre for Crime and Justice, which found the British middle classes showing an unprecedented level of contempt for the law in this regard. It found inflating insurance claims to be widespread, with those surveyed justifying their behaviour as revenge for the injustices around exemption clauses found in the small print.
In mainland Europe however things are very different. If the same soundings were taken from among their Continental cousins the response would be vastly more positive. I don’t know what the Dutch phrase is for treating customers fairly, but the fact is that’s exactly what they’re doing.
This approach to TCF is not just confined to the Netherlands. In many parts of the continent, insurers provide their customers with help to make a claim. Back in the UK customers get a much rougher ride because the process here has the insurer and loss adjuster on one side, with only the client and their broker on the other – hardly a level playing field.
European insurers recognise that it is simply not fair for professional advisors to act on their behalf while the policyholder, with the exception of some help from their broker, does not have access to the same level of expertise.
Certainly in the Netherlands it is standard practice when customers make a claim to be provided with the services of an independent loss adjuster. The client is also entitled to spend the same amount to prepare and submit their claim as the insurer spends on the adjustment by their loss adjusters. So if the insurer spends €3,000 on fees that is what the insured is entitled to spend.
All policies in the Netherlands and the majority in France and Belgium contain a contre-expert clause entitling the policyholder to their own adjuster. There is a vibrant industry around this in those countries and the system works extremely well. It may seem an obvious and fair thing to do by European insurers but UK insurers have, by enlarge, yet to recognise this as a gap in the claims process.
However it would be wrong to view this as a service that only adds value to customers. This also helps insurers avoid overpaying and also, because the adjuster spends so much time with the claimant, they can detect any spurious or fraudulent claims. In short it makes the whole process fairer all round.
It would also be wrong to view this as a threat to brokers who are good advocates for their clients. But there comes a point where brokers just do not have the time. They are not getting paid to do this; it is a drain on their business and, on complex claims, they sometimes do not have the expertise to give clients the right advice.
Some insurance firms will talk proudly about how their standards exceed those required by the regulator. However when it comes to claims experience there is a shortfall and, as things stand, we currently don’t treat customers as well as they do in much of the rest of Europe.
This is a real shame because the UK insurance industry is world-leading in many ways and it is just not fitting that a market as mature as this should be regarded so poorly by its customers. So I would challenge the UK industry to, not just take a leaf out of our European counterpart’s book but to innovate to also become world leaders in the area of customer experience.
John Sims is chief executive of Lorega.
See John's first blog: Guest blog: John Sims