Concerns over level of reserving persist in Independent's London market operation
Cross examination has continued at the Independent Insurance trial. Defense counsel Ian Winter QC questioned Colin Hawes, ex-deputy divisional claims director at Independent, on claims processes within the company’s London Market operations.
The defense argued that former company chairman Michael Bright had expressed concerns over the Gross Case Development (GCD) figures (used as a tool to analyse the performance of reserve levels) on a number of occasions.
According to Hawes there was frustration within the organisation over the amount of auditing taking place and due to a climate of fear in the claims department staff had devised ways of improving the GCD figures.
Winter put it to Hawes that because of the pressure claims handlers were keeping finalized claims on the system to improve the GCD figures.
Hawes responded: “I’d be kidding myself and everyone here if I said nobody was playing with the mechanics of GCD.”
“I’d be kidding myself and everyone here if I said nobody was playing with the mechanics of GCD
Colin Hawes, ex-deputy divisional claims director at Independent's London market operation
He went on to explain that he found this practice unacceptable and took measures to put an end to it.
Pushed by the defense counsel, Hawes referred to discussions about the possibility of reducing some outstanding claims to zero as a way of presenting a better picture for the reserves.
Winter asserted that this had in fact been done with claims worth around £3m. Nodding in agreement, Hawes replied that he realized this was the case after handing in his resignation.
Three former directors of Independent Insurance are charged with conspiracy to defraud. Michael Bright, Dennis Lomas and Philip Condon deny the charges.
The case continues.
