What issues are driving the future of claims in the UK?

Dominic ClaydenHead of technical claims, Norwich UnionOne of the things which is exercising my mind, and a lot of other people's minds, is the high transactional costs that we have in the UK in processing bodily injury claims. For example, legal fees are 40% of our claims cost in employers' liability, and when you get into the lower values below £5,000, it's statistically the case that claims costs are 160% of damages. That, in my view, isn't sustainable and it's not something which, at an economic level, the country can continue to afford to carry.The problem of rising transactional and claims costs has exercised the minds of the legislature in Australia. It has passed quite stringent legislation which restricts the right to claim. In Canada, they've introduced similar legislation, which reduces the opportunity to claim for bodily injury if it's below a certain threshold. Ireland introduced the Personal Injury Assessment Board. Now, it's no longer possible in Ireland to bring a claim for personal injury unless you've been through the state-run assessment board which deals with the claim.So the issues that we have in the UK aren't isolated, we are grappling with them.Another theme is that we need to get the process right every time, because it's not good enough to say we have a 5% error rate. It's not good enough if you're one of those 5%, because for you it's 100%. So we need to get slicker on how we process claims. But we need to reduce transactional costs to continue to make insurance affordable. We've looked at a Civil Justice Council-sponsored, fixed-cost scheme for lawyers around motor claims. That's been successful and has certainly helped ease the friction that exists between claimant lawyers and insurance companies. No longer is the focus: how much can the lawyer make out of this claim?We shouldn't think about transactions of injury claims as being just something which is dealt with between lawyers and insurance companies. We need to have a radical re-think with the claimant at the centre of the process. It doesn't need to be dealt with by lawyers. It needs to be dealt with by people with skills, who can ensure that people get the right compensation levels.Norwich Union is aiming for a process where we can ensure any claimant that comes to us, however represented, will be put through, as far as possible, a standardised claims process which gets to that compensation level earlier.

Andy FairchildOperations director, AXA FraudThere are lots of column inches written about fraud – it's a pretty well understood phenomenon. The stats on it are mind-boggling, so we have fraud put into two categories: one is an exaggeration of a claim and the second is fabrication, a made-up claim.About 23 million people would not rule out exaggerating a claim and 17 million would completely fabricate a claim. When you start to compare exaggerating an insurance claim to other socially acceptable and non-acceptable things, it's pretty much similar to taking a towel from a hotel room.What are we doing in AXA? Conversation management. That's where we just talk to the claimant a little bit more and ask more questions. That's a fundamentally different approach to the one that the industry has been taking, which is based more around process. In our pilot the number of claims that were withdrawn by the customer or repudiated by us, and that wasn't very many, increased from 3% to over 35%. So the numbers are pretty big.The second issue is around partnerships and the big question for me is to what extent can we make our partnerships within the industry more strategic and just blur the boundaries a little bit? That needs more trust and working more closely together, because the prize is bigger than any one component of the industry. The third one is around cycle times. We busily measure our average cycle times, how long from customer notifying loss to settling the thing. My concern is about the variation, it's not how good you are when you're good, it's how good you are when you're bad.The fourth issue is the number of times a customer has to contact us from notification through to final settlement of a claim. One contact for one claim is the big vision. And finally, we shouldn't underestimate the value of people in this process. The next move for us, for the CII and for the industry is to look at training and development and give an external accreditation.

David HarrisAmlin operations directorFor those of you who live and work in London, you'll have seen claims brokers wandering the streets. Claims brokers present claims face-to-face Lloyd's at a managing agent. The leading carrier will then make a decision on the claim in conjunction with the broker about where to take things. It's then peer reviewed by an independent party, so that essentially you should get the right decision on every single claim.But it's not particularly efficient having all these people walking around, so there are a number of technology-related initiatives going on in Lloyd's at the moment. One is the development of an electronic claims file, so that every syndicate can see the same details in the same file at the same time. The plan is to enhance the service for those carriers who are following rather than leading on individual claims.Second is a plan to introduce online settlement in Lloyd's. We're developing minimum standards, which will apply across the 50 businesses in Lloyd's.What we're not planning to do through the use of technology is to reduce our people headcount, or reduce the commitment to competence.We've actually made it remarkably easy for people to commit fraud against us, so all of the technology that you're talking about is really replacing some of the intellectual capacity and skill that we've had in the past, and somehow I'm not sure that's entirely the right answer.We seem to have dumbed down claims as a technical competence. Claims is probably the most technical area that anybody deals with in insurance, and I include underwriting.My other concern is procurement. If you look at what's happened to the loss adjusting industry, then all we've done is reduce the fees that we pay them. And what have they done? They've cut down their expertise. It's not really a good solution. These people would deal with a lot of fraud and explain to customers what the impact of fraud was and what was going to happen to them. They have disappeared.

Jason RichardsClaims director Capita Insurance ServicesI'm new to Capita, I have a fresh pair of eyes to look and what I see is a pretty awful customer experience as they go through the claims process. I see a lot of duplication, I see a lot of inefficiency and I see a lot of confusion. Is it really clear who manages the customer? Getting claims right is part of the process which will actually drive policyholders to renew that policy, or it'll drive them to tell their friends that they had an awful experience.I see also a very commoditised loss-adjusting market and what I would call stakeholder dissatisfaction. If you want long-term value, then you want a situation where you have a long term operating partnership with somebody who's providing whatever services you happen to be choosing to take from outside suppliers. Be cautious about procurement. Make sure you still have operations people involved.We've seen a lack of weather events, better risk management and, therefore, a lower volume of claims. This has driven the market down to the commoditised status that it's at now, which I think is very, very risky. What does that mean? It means we need a new solution at the volume claims end of the market – a solution that's a bit more intelligent than the one that we've had in the past. A one-size-fits-all mentality doesn't work anymore. We need to create value, not just via the price of a service. It's the days where we can have open book relationships and gain and share relationships and people can agree exactly what their roles are and what margins they're going to make effectively through the process.

Jonathan ClarkFaculty of Claims chairmanI have three questions. First, 24 /7. Do customers actually want it? And when do they want it? What I understand about the 24/7 that First Direct offers is that there's a relatively limited number of transactions that you want to do 24/7, and First Direct understands that. So, is it notification and response? Is it about updating and settling? The second question is when is a supply chain the answer? Is it about retention, providing customer service? Is it about reducing claims costs? Or is it about insurers moving from being payers to purchasers of claims? The third question is: do we actually learn from claims? What competencies will we need in the next five years? And do we need now to deliver the claims services that we've heard so much spoken about?Finally, we all talk about brand, we all talk about the moment of delivery, we all talk about building brand. I wonder if we invest in that in our own claims operations. Is your organisation designed around your customers and your markets or what you make and sell? My two words are 'choice' and 'personalisation'.