The insurer’s head of claims says ‘we’ve just got to be ready’ for claims escalation as lockdown eases

Direct Line Group’s managing director for claims Jessie Burrows said the insurer experienced a drop in motor claims “to about 70%” when the Covid-19 pandemic and associated lockdown hit its peak.

Despite this sudden plummet, Burrows added that motor claims are now on the return to pre-coronavirus levels, correlating with prime minister Boris Johnson’s announcements that have eased lockdown restrictions over recent weeks.

In May, for example, Burrows said motor claims were “around about 60% down”, however in “the first couple of weeks in June, as lockdown’s been easing, it’s gone up a little bit more”.

The nationwide lockdown, which was initially implemented in March to quell the spread of Covid-19, has also affected the types of motor claims being reported.

Burrows told Insurance Times: “On motor, the mix has changed a bit because before [lockdown was eased] we were seeing more accidents involving either pedestrians or cyclists. Now, we’re seeing that there are more occupants in the car, particularly as lockdown has started to release.”

Jessie Burrows Pics

Jessie Burrows

In terms of home insurance, Burrows added that there was an initial reduction in claims due to Covid-19, however this has now returned to normal levels.

“It has been more like a low normal week, but now we are starting to see more people claiming on accidental damage or for drains, washing machines [that] have gone wrong, that sort of stuff, so they’ve had leaky washing machine pipes or water over the floor,” she said.

First port of call

Travel insurance claims, on the other hand, has kept DLG “very busy” Burrows said, despite this line of business not being a large book for the insurer – it writes around £150m in premiums, mainly through partnerships with banks, Burrows added.

In part, claims handlers have been inundated as customers have been unable to promptly get hold of their tour operators or credit card companies to deal with cancelled flights or holidays, so they have been turning to their insurer for advice on how to proceed.

Burrows said: “[We have seen] multiples of our customers calling, simply because they haven’t been able to get through to their tour operator or the credit card company to get refunds for the cancelled flights. So, understandably, they’ve come to us and then we’ve been able to help them and give them advice on how they can claim back from their travel provider in the first instance.”

To respond to this influx in customer demand, Burrows was able to move claims handlers that typically deal in motor or home claims to instead focus on travel.

She explained: “Where we have had reductions in motor and home claims, because we cross skill a lot of our handlers, we’ve been able to move them on to travel and in that way, we’ve been able to go some way to meet some of the demand in the travel line.

“Having our people cross skilled and having the ability to move them around in line with customer demand has worked out quite well.”

Future of insurance

For Burrows, “the pandemic has highlighted that the industry needs to be a bit clearer with customers about what is covered and what isn’t and what you are getting for your premium”.

Although Burrows firmly believes the insurance industry will recover from the Covid-19 sucker punch, what form this recovery will take is anyone’s guess – she simply emphasised that insurers have “got to be ready”.

She said: “It will be really interesting to see how things move over the next couple of months. Who knows, we might have a ‘V’ shape recovery, or it could be a ‘W’, or it could be a ‘U’ – we’ve got all these letters! I think the key thing is we’ve just got to be ready for all of them and make sure that we can do our bit.”