The industry should be praised for the improvements it has made in client service, says Phil Bird. But shareholders deserve a return too

You need to develop a thick skin pretty quickly when you work in the claims business. Customers always think we should be quicker, cheaper, fairer and more generous. Our regulator believes we must do better and, as for our friends in the national media, the less said the better. Praise is always in short supply.

Yet I believe we deserve a hefty pat on the back for all the effort we’ve put into enhancing claims operations in recent years.

We must not get carried away, though. We are delivering only what 21st-century consumers expect – and what our regulator now demands.

So let’s get used to the fact that what we believe is exceptional performance probably always will be the minimum expectation of those we serve.

In claims this forces us to revisit the age-old question, what are we here for? Is it about saving or spending? It will always remain a delicate balance, but surely the essence is this: in claims the job is to settle valid claims swiftly, fairly and cost effectively. It’s as simple as that. We focus on the quality of service we provide, we keep our customers up with developments, and we pay what we should pay when required.

But meeting customer expectations is only one of the many pressures we face. We’re dealing also with a growing challenge from fraud, assimilating the regulatory changes brought in by the Ministry of Justice and trying to work out how to cope with extremes of weather and the eye-popping losses they produce. Then there is the impact of sustained price-driven competition.

The net result is that however hard we work on our service, we are probably going backwards in financial terms; the payback for years of investment is threatened by the fight for business.

So while we need to consolidate our achievements in claims and maintain progress, we must control costs and deliver value. Our customers might want a good product and service at the right price, but our shareholders deserve a decent return too.

But there can be some easy wins. At Groupama, we have improved customer service in home claims by putting highly skilled handlers on the front line. This has enhanced communication and decision-making, but it has also helped settlement times and reduced costs.

Specific areas bring their own challenges. In private motor, there’s the issue of the bloated costs of credit hire vehicles provided to no-fault third-party motorists. The ABI’s general terms of agreement seek to provide common ground between insurers and credit hire operators, but some insurers are stepping outside the parameters. Will the benefits they accrue outweigh the risks of increased legal action?

Managing fraud is another stern test – more so in a recession. We must continue to be energetic and relentless in our determination to identify and prevent it. Let’s be as clear and upfront about the need for such scrutiny as we are tough on the crime itself. After all, our credibility and reputation are at stake.

This means investment in our counter-fraud teams, equipping them with the best tools and techniques. But we need greater co-operation within the industry too. We must, for example, share data more. Fraud is, after all, a market-wide problem that needs a joined-up solution.

The same probably can be said for the Ministry of Justice reforms. They may be controversial and perhaps even underwhelming in parts, but at least they force us to ask how we can be better.

Surely it is only by being better in claims that we can justify our existence.