Paul Turner, finance director of ansa, says integrated systems are the key to satisfying the industry's exacting standards

Lastword

1. Do you think there will be a greater move by insurers towards outsourcing certain aspects of the claims process to specialist companies?
It appears to be inevitable that the desire and need to differentiate the claims service will support the existing momentum in this direction. Claims managers that we have spoken to agree that commodity-type and specialist claims have to be managed in different ways in order to provide a cost-effective service which is valued by the policyholder. Of course, insurers will have differing views on the degree of outsourcing which they believe appropriate.

2. Which areas do you think insurers should be looking at?
In broad terms, any area where the insurer recognises that the necessary expertise is not a core competency of the organisation. In the sector of underground services, we would argue that surveying and investigation activities fall into this category. As intelligent surveying is the key to cost-effective claims management, supported by integrated and web-enabled systems, outsourcing the claims handling activities can be a similarly attractive proposition.

3. What sort of cost savings can be achieved through effective management of drainage claims?
Very substantial. Management information produced by ansa on behalf of several major insurers suggests a minimum expectation of 30% cost savings. This is a sustainable expectation driven by identifying exactly the scope of works necessary to resolve the claim; ensuring that the insurer pays only for its share of the liability; and ensuring that those repairs are carried out in a cost-effective manner.

4. What sort of training do drainage surveyors need to meet the high service standards required by the industry today?
First, they need to be multi-talented and highly motivated individuals. Our minimum requirements are City & Guilds level training in investigation techniques and drainage law; excellent computing skills; at least four years' experience in the drainage industry; confined spaces and high-pressure water jetting accreditation; site safety approvals; first aid certificates; and completion of our health and safety course. Plus, as our ambassadors, they must be articulate, personable and responsible.

5. What role does technology play in the process?
Integrated systems are the key to meeting the exacting service standards in the industry. The surveying system is fully integrated with the claims management system allowing the data to be transferred directly from our survey vehicle to our office, enabling policy cover decisions to be made within three hours of conducting the initial investigation. Necessary repairs can be effected the same day. Being internet-enabled, insurers can obtain real-time claim management information. These facilities will become the basic requirement of any service provider.

Geoff Somervail, managing director of Claim Control Consultants, explains that internal and external service levels are constantly monitored for the benefit of customers

1. How do you think insurers can better manage claims leakage?
Insurers need to rely more on the expertise of specialist replacement companies with industry-specific knowledge to assist in claim verification. They should be moving away from cash settlements and allowing claimants to supply their own quotes, as both these routes can be, and are, seriously abused, particularly with high value items such as IT equipment. Increasing repair rates and improved, centralised, co-ordinated purchasing arrangements drive down claims leakage. There may be an argument for policies to be reviewed, to be more stringent on claims for IT equipment, as values and specifications are often exaggerated when claimed for.

2. What proportion of UK household and business claims is computer-related?
It is likely that far more commercial claims are computer-related than domestic, due to the fact that almost all businesses are reliant on computer systems, and whole networks can be lost or damaged at any one time. We would estimate that about 10% of property claims involve some form of IT equipment.

3. What role can brokers play in the claim control process?
We often don't work as closely with brokers as we would like. Policyholders perceive them as an intermediary between them and the insurance company and their value is often realised only when it is necessary for them to make a claim. Following the claimant purchasing new equipment and on the request of a cash settlement by the broker, replacement companies, such as CCC, are involved at a later stage by the insurance company to validate the claim and suggest a value. If this claim value is significantly less than what the claimant has already paid out, they are left with a large bill, which does not look good on the broker. This is especially relevant in commercial claims where business interruption may be an issue. If we were able to communicate with the broker at an earlier stage, this poor customer perception could be eliminated and all parties would feel the benefits.

4. Why is it important to carry out inspections on behalf of insurance companies?
The only way to reduce premiums is to reduce claims costs. Repair rates would be very low if a third party were not involved, as claimants would far rather have new equipment than have their old equipment repaired. Therefore, the benefits of inspecting are quite clear, cost reduction through increased repair rates and claim verification, both reducing claims leakage.

About 20% of claimants withdraw their claim when we ask to collect and inspect the equipment. This may be because the alleged incident never happened or wasn't quite as bad as first thought; the equipment never actually existed; or the equipment may contain `sensitive' data. Obviously all these reasons benefit genuine policyholders through reduced premiums.

5. How do you make sure your service levels are met?
Our business processes are designed to proactively monitor service levels. We have a dedicated team which continually monitors and audits on a daily basis our compliance to both internal and external service levels. We pride ourselves in offering comprehensive management information reports tailored to each of our principals. We monitor our performance by sending out customer survey cards for all resolved claims. Insurance companies and loss adjusters are provided with feedback from these.