Bill Paton has devised a successful stragegy for claims handling, but now that fraud is back on the industry's agenda he is contemplating a new future. Katy Dowell reports

Bill Paton, chief claims officer for Zurich, is a man on a mission to create top class claims control standards. The problem is it's only a mission possible if government, trade unions and claimant lawyers agree to work together on personal injury protocols.

While tackling fraud has become an industry wide initiative, personal injury is another matter. With so many stakeholders making money out of the current process, any legislative changes will be fraught with difficulties. But for Paton it is essential to put claimants back at the heart of the process.

When Paton was first interviewed by Insurance Times at the beginning of 2005 he said: "The two things I really focus on are efficiency, which usually means customer service, and effectiveness in controlling the claims costs."

Now he concedes that these objectives are difficult to achieve with the personal injury compensation system in its current state.

Paton's "frustration" with the Compensation Act is that it has failed to do what it set out to achieve. That is, giving claimants fair access to justice. He warns there are some "serious gaps" in the Act. "We still believe there is the option of compensating people in line with exposure," he says.

In his view the Act was designed to overcome disproportionate legal fees in the process, and give the claimant a fair portion of the compensation pie. Instead, it has regulated the activity of selling claims, redefined the law of negligence and given mesothelioma sufferers the option of gaining compensation from any employer which may have exposed them to asbestos.

What it has not done, says an agitated Paton, is introduce rules which will see the process speeded up.

Paton therefore has a plan. "We do believe there are some gaps. Quite a lot actually. Zurich will work with the ABI and the rules committee to try to implement the rules as they were intended."

Yet the government has yet to come up with a plan to cut the amount of time it takes to pay claims. It has also failed to address the disproportionate legal fees which are paid by both the claimant and the insurer.

The government is working towards a solution to these issues, but with so many stakeholders involved it could be years before the claimant feels any benefit.

Paton hopes that government legislation will be unnecessary, although this is unlikely. He says he hopes "the rules committee will be able to voluntarily get a code of conduct." Pressure is being mounted on the Department for Constitutional Affairs (DCA) by the legal fraternity and trade unions install protocols which would govern the personal injury compensation process.

Rules, which Paton fears, could lead to further satellite litigation. "What happens if we get into another raft of litigation?" he ponders. "The Compensation Act is not doing what it is supposed to do. And then the only people that benefit are the lawyers."

It will also mean "that chaos resumes," he says. Strong words. And once again insurers will end up with a negative image from the view of the claimant. It is the claimant which Paton is most preoccupied with, returning to the subject several times throughout the interview.

Not many senior managers will openly criticise government on the record while reform is still being discussed.

But Paton is clear: "The government has to start looking at the cause rather than the symptoms. The overturning of Barker and new legislation is still not tackling the cause."

It may also be that while it takes, on average, up to three years to compensate car crash victims, Zurich, along with other insurers is left looking like the baddie in the picture.

Although it may appear to be marketing speak, Paton is genuinely passionate about claimants. It is not surprising that Paton has this passion, as he was appointed by Zurich in 2003 to re-organise its claims division.

With that process finalised he started to look at the business on a global scale. That means skills learnt in UK being transferred to its counterparts across Europe and the US, and vice versa. "What amazes me is if I go and speak to colleagues in Portugal, Spain or the US, we are all wrestling with the same type of issues," says Paton.

There are, he says, "degrees of differentiation" depending on the maturity of the markets. So while the US is known for having a buoyant compensation culture, the UK has not slipped that far - yet. And Europe is not experiencing the same issues as the UK because insurers are avoiding those mistakes that have been made here.

Introducing global best practice standards, he says, is enabling Zurich to look at where it can improve the claims process in each country. In the UK it means: "We are much more joined up. We are now one UK claims system with the only differentiation being the customer." This has impacted directly on the claims leakage which, he claims, is at the lowest point in the insurers history.

In the UK insurance fraud detection is at its most sophisticated. Scott Clayton, Zurich's head of claims investigation, is charged with driving forward the insurers fraud strategy. Clayton is involved with the Insurance Fraud Bureau (IFB), and been encouraged to share his experiences with fraud investigators across Zurich's global operations. Similarly Steve Thomas, technical claims director, has become the "unofficial guru" in litigation, regularly on contact with his counterparts across Europe.

But, says Paton, it is Zurich UK's claims supply chain management where the insurer excels most. Paton has installed a new business structure where certain functions of supply chain are centralised "so that we have a common strategy and have concentrated firepower".

It is a model which Europe has chosen to adopt, using the UK as an example of best practice. Yet Paton believes the insurer has to be cautious in its approach. "These countries are different mature markets, for some of these countries what we are doing is revolutionary. We have to be careful that we don't jump ahead. We have to look at what these markets are ready for."

With the ABI putting claims firmly back on the political agenda, Paton's role is bound to change again in the next 12 months. There is a threat that insurers which procure personal injury claims to and from law firms could become regulated by the claims management companies (CMC) regulator. Meanwhile, nobody knows when the next Boscastle is going to hit. The IFB, which launched only in July, is yet to show any signs that it is effectively tackling fraud. And insurers want to see Government litigate on the driving standards of young drivers.

So while Paton strives to make his claims department the most efficient in the UK, he is struggling against a tide of wider issues. It will be some years before these problems are solved, by which time there will be another raft of concerns. So while Paton has a clear mission his action status is frustratingly reliant on other players to make it possible. IT