Law firms have an increasing responsibility to deliver a quality claims service for insurers. And that means using more mediation, says Alan Jacobs
This year insurers will have to focus more on client relationship management and claims service delivery. The emphasis will be to keep the large blue chip clients happy when they face more expensive and frequent claims, particularly in personal injury.
It will become the big differentiator for an insurance company. In recent years, generally because the market has been soft, insurers have not spent the appropriate time and effort in nurturing relationships by way of service delivery. But now the claims arena will be dominated by service, as insureds become more sensitive to the larger, the more complex and the more frequent claims.
Major companies may take higher deductibles and are, naturally, focusing more on how insurers handle claims. To align with these needs insurers should in turn look closely at the quality of delivery by their own claims service providers, such as lawyers. They will need to question the validity of the nature of a panel firm. Larger insureds will be increasingly nominating specific law firms, who have a commercial background and act commercially in their claims handling style.
Maintaining this element of trust and longevity at this level can only help the insurer in their own relationship with the insured.
The lawyers must also look for new ways to enhance their offering. One way is through a wider use of mediation. At the moment, in the personal injury field, it is only habitually used in clinical negligence claims, but it must be broadened to be mainstream in all personal injury claims.
Insurers are all too often being forced into the courts when mediation (with an 80% to 90% success rate) would result in massive costs and damages savings. The reason why mediation is rarely used in this area may well be because of the vested costs interests of both sides' lawyers in pursuing the traditional court route.
A perfect use of mediation would be where an insured is concerned to maintain its work force (and union) relations.
The insurer could be proactive and set up a scheme with the union's lawyers where mediation is automatically used in cases where a settlement is sought, but negotiations have broken down.
The courts remain excluded and it takes the bite and the animosity out of the whole claims process.
Mediation brings an acceptable outcome for the claimant, the insurer, but more importantly for the insured.