Poor claims experience puts future business at risk, research finds

Half of brokers that are dissatisfied with an insurer’s claims handling are unlikely to place business with that carrier again within the next 12 months, new research has found.

The finding, revealed during an Insurance DataLab and Research in Finance webinar yesterday (21 September), entitled Claims Pulse: Raising the Bar for Commercial Claims, suggest that poor claims performance is having a growing impact on both broker trust and future trading relationships.

According to the second wave of the Commercial Lines Claims Pulse survey, 50% of dissatisfied brokers said they were unlikely to place business with the insurer again, up from 39% in the first survey.

Meanwhile, 82% said their trust in the insurer had fallen following a poor claims experience, compared with 78% in the first wave.

Overall satisfaction levels remained relatively stable, with 75% of brokers reporting satisfaction with claims handling, compared with 77% previously.

“The commercial consequences of getting claims wrong look like they’re getting a bit more severe,” said Matt Scott, co-founder and chief product officer at Insurance DataLab.

The research has now captured around 1,500 individual claims experiences, allowing trends in broker sentiment to be tracked over time.

Claims under scrutiny

Satisfaction levels varied considerably across business lines.

Business equipment and office contents claims achieved the highest satisfaction score at 94%, followed by employers’ liability (86%), directors’ and officers’ liability (84%) and professional indemnity (83%).

Commercial motor claims recorded a satisfaction level of 70%, while construction claims ranked low at 57%.

General liability satisfaction fell sharply from 83% in the first wave to 73% in the second, while commercial combined dropped from 84% to 79%.

Panellists said claims service was becoming an increasingly important factor when advising clients on insurer selection.

Stuart Black, head of claims at Partners&, said: “Ultimately, client support and advice is front and centre of what we do. [If] we’re not considering claims service when we’re placing business, [then] we’re doing our clients a disservice.”

He added that insurer claims performance data, alongside anecdotal feedback, should be “highly considered” when advising both prospective and existing clients.

Laura Hancock, managing director at Yutree Insurance, said a well-managed complex claim could be one of the strongest tools for client retention.

“If a key account has had a complex claim and the process has gone well, I’d say that’s our strongest retention tool for the following year,” she said.

“It means so much and we can prove to our clients that when the worst happens, we can get their business back up and running really quickly.”