The ABI should restart its database, says Andy Cook
At last year's Strategy conference, Andy Homer admitted that he had no idea that brokers held so much information. He was not alone in asking why the industry is not better at sharing information.
From his perspective as the former chief executive of a large insurance company, sharing information would improve efficiency, eliminating duplication of effort and record keeping at the very least.
So it was with some degree of cheer that Insurance Times reported the launch of CUE PI last week. Sharing information to catch those who are making fraudulent serial personal injury claims is a good idea. A better idea would be to share all of the data surrounding the claims, so that better benchmarks can be produced
About ten years ago, the ABI co-ordinated a programme of data sharing among liability insurers. It recorded, anonymously of course, the rate at which accidents turned into claims. Also the length of time to settle a claim, the proportions of costs due to legal and administration costs and the loss ratios for a variety of categories.
Why can't this be restarted? It seems that one of the largest insurers in the country is considering a radical change in the way it approaches liability claims. After finding out that it spent hundreds of millions of pounds each year on legal fees, it is looking at a way of paying up without the help of lawyers for all but a few key cases.
Where does this leave smaller companies which don't have huge databases of claims? Commercially disadvantaged is the short answer.
The cost of claims is a threat to the whole industry and its reputation. It is right that information should be shared so that the whole industry moves forward.