The London insurance market and technology have proved to be uneasy bedfellows. Recent history has been littered with industry wide projects that have failed to reform quite antiquated processes. Yet even the most hardened cynic would concede that settling claims has been transformed very much for the better over the past five years. The Electronic Claims Files (ECF) system introduced by Lloyd’s and the IUA, its company equivalent, has now been adopted by virtually all insurers for every sort of claim. According to the ECF user group, end-to-end transaction processing time has reduced by an average of 15% as a consequence.
Despite this, overall satisfaction with London’s claims service standards has surprisingly declined a bit in 2012 according to a report published by Gracechurch last week. That the consultants only surveyed claims-brokers, whose opinion of ECF probably mirrors that of a CD retailer towards the digital downloading of music, could have something to do with the negative sentiment. The traditional role of the claims-broker to haul mountainous files through the streets of EC3 to advocate face-to-face with insurers is rapidly diminishing. In the parlance of the age, broking firms are significantly “de-skilling”, “off-shoring” and “down-sizing” their claims teams. Undoubtedly insurers are now talking to claims-brokers less as the report indicates but it might be wrong, however, to deduce that the quality of the claims service to the end customer is in decline.
Indeed the survey highlights a number of Lloyd’s carriers who have improved their satisfaction scores significantly. Those that were previously drowning under the weight of a paper-based system and endless queues of brokers are now concentrating on what really matters. Freed from the shackles of maintaining a monotonous process, high quality claims professionals are being attracted back into Lloyd’s businesses. Value-added intervention with underwriters, MGAs, TPAs and most importantly the customers and their insurance advisors seems to be on the increase. Individual insurers are receiving very strong feedback.
Yet there is no room for complacency; even though adjudicating claims has sped up since ECF was adopted, the accounting and settlement which follows remains clunky. It is still taking too long for the market to make clients good after they suffer a loss. An evolving and complex picture, therefore, that may encourage Gracechurch next time to dig even deeper and canvass a much broader range of opinion than the claims-brokers interviewed in 2012.