The home claims process could be made more efficient by adopting new techniques. Marshall King explains
The top 10 insurers spend £3.3bn each year on property claims and this has increased as a percentage of costs by 20% in the past decade. About £1.5bn of the money is spent on domestic building repair.The question that the top insurance companies are asking themselves is: how can we spend this money efficiently? And the pressure to do this is building up. Investment returns are low, forcing insurers to drive the underwriting result and this involves cost cutting.In the domestic repair market there are glaring inefficiencies and outdated practices. The use of portable technologies, the internet and the involvement of suppliers early on in the claims process could provide substantial savings. Here are some systems insurers could adopt.
Ways insurers could improve their repair service
More accurate pricingWhat could be done: Insurers will ask their suppliers to make visits to properties that they are considering insuring to do a health check on the state of the property so they can underwrite more accurately. May also involve information from the builder in case of new build houses Effect on customers: Customers will pay for their own level of risk, and not take the costs of the poorly maintained properties
Property health checksCurrently: Nothing offeredWhat could be done: Insurers will provide, free with your house insurance, an annual health check of your property: roof, gutters, electrical and gas checkEffect on customers: Fewer claims, more claim prevention, less hassle from consequential damage
Access to high quality builder network for private workCurrently: Nothing offeredWhat could be done: Customers insured with the best companies would be able to access, at preferential rates, the supply chain network of the insurer. They would thus benefit from the group purchasing discount and quality control measures of the insurer supply chain purchasing teamEffect on customers: Savings on home improvement, confidence that they are dealing with reliable business that takes health and safety seriously
Hot transfer at time of claim:Currently: First notice of loss department takes claim details, then faxes same to in house field adjuster or supplier. Occasionally it will telephone the supplierWhat could be done: When claiming, householders would be transferred directly from the first notice of loss call centre to the relevant supplier's call centre. The claim details would be sent via the internet, using XML, at the same time. The supplier could book an appointment or take other action as necessaryEffect on customers: Just one call gets customer to the stage where validation visit is booked
Real time approvalsCurrently: Field surveyors try to apply validation rules correctly and estimate repair costs accurately What could be done: Surveyors would use tablet PCs to assist validation and estimation. Integrated digital camera would make images available in real time to insurer claims handlers enabling real time approval of estimates. Tablet PCs may also have recording facilities for fraud detectionEffect on customers: Speeds up the process for householder
Online tradesman booking at first visitCurrently: Survey results are sent back to office for typing up then transmitted to the insurer who considers whether to give approval. What could be done: If repair is covered by the policy and could be started right away, surveyor books tradesmen there and then, and shows the homeowner the names and images of the tradesmen attending. A letter is sent from the system to confirm detailsEffect on customers: Speeds up the claim process and makes insured feel comfortable with the tradesmen who will be attending
Online claim participationCurrently: Customers are generally in the dark with relation to the progress of their claims What could be done: Customers would be able to see progress details of their claim on-line, and participate in decisions - for example, suggest paint colourEffect on customers: Ability to interact with supplier executing the claim on-line 24/7 and know that the comments are noted and filed
Online selection of materials from databaseCurrently: Insured is expected to source own replacement materials in many cases What could be done: The surveyor's PC would contain full pick lists and quantities for replacement parts/materials. Special offers would be available from time to timeEffect on customers: Better value materials from insurers point of view. More informed choice from insured's point of view
Online monitoringCurrently: Revisits required by supplier with damp metersWhat could be done: Suppliers would install e-connected monitors, such as movement detectors and damp meters, which would communicate directly with suppliers via the internet. They would indicate, for example, when property is approaching dryness or has stopped moving (in cases of subsidence)Effect on customers: Saving of elapsed time on claims and also reduction of cost and hassle since re-visits are avoided
