Industry must collaborate to eliminate customer mistrust - Ageas's Watson

The insurance industry has to collaborate more to help curb the rise of spurious claims, Ageas UK chief executive Andy Watson has said.

Speaking at an ABI conference about the compensation culture Watson said that all groups involved in the insurance process needed to do more to eliminate conflict during the claims process.

He warned that the distrust that existed between different groups in the claims process was impacting negatively on the reputation of the industry as a whole, because customers did not differentiate between Insurers, brokers, claims management companies, lawyers or aggregators.

He said: “The fact that we are beating each other and there is conflict, and there are different business models with different vested interests and ways of doing things, is not helpful.

“Instead of conflict it should be about collaboration. If we have all groups operating as one for the good of the customer, then collaboration becomes much more of a theme.”

According to Watson, more collaboration would also save money.

“A lot of the processes, audits, checks and balances and overlays, checks and controls are because we don’t trust each other. [It] is building an industry of mistrust.”

Watson welcomed the government reforms introduced to reduce the levels of whiplash claims.

But he said that there was still too much money to be made within the personal injury process to drive the problem down significantly and added that more needed to be done.

His suggestions included reducing the limitation period, general damages levels and introducing a sliding scale for recoverable costs depending on when the claim was made.

“But I am a realist and I know that some of these are very difficult [to implement]. Some of them are politically unacceptable, but that is the only way.

“Everything else is a tactic - it is just moving the balloon in one area and it will pop up elsewhere. For it to be a strategy it has to address the problem of reducing money.

“It dis-incentivises CMCs from aggressive claims farming and the spurious reporting of whiplash claims two and half years to three years after the accident when it becomes very difficult to say whether it was genuine or not.”