ILC ARTICLE

People not systems deliver good claims handling

18th October 2023

When it comes to effective claims handling, insurers and MGAs have been encouraged to remember their most critical asset – their people.

Speaking at ILC’s MGA Claims Conference, which was held in association with the MGAA, Catherine Healy, Claims Manager Delegated Authority at HDI Global Specialty SE, said that the Covid-19 pandemic had put claims handlers under intense pressure.

She said the impacts of that are still apparent, either in workforces depleted by ‘the great resignation’, or in low morale among claims handlers who feel they were unsupported.

“People were over-worked, stressed and exhausted,” she said. “Many claims handlers left the industry or took early retirement, and many who remain are resentful because they don’t feel like they were properly supported during the crisis. In many cases, we’ve just gone back to business as normal, but we need to remember that this is a people business and it was the claims handlers on the frontline. They had a lot to deal with and as insurers we have to rebuild those relationships.”

Relationship-building

However, Catherine said that relationship-building following Covid-19 was not just critical between insurers and MGAs, but between the industry as a whole and the wider public.

“The pandemic impacted the public perception of insurers,” she explained. “Some claims departments even called in Samaritans because of the nature of some of the calls they were getting. People were going through unprecedented challenges, insurers were dealing with unprecedented claims volumes, and MGAs were caught in the middle trying to manage it. So I think we need to remember what the pandemic was like, because that’s what a lot of policyholders remember.”

For that reason, she said the service delivered by MGAs had never been more important. However, not all MGAs are suited to all product lines and she encouraged insurers and MGAs to talk more openly about what a good claims journey looked like for each product line.

One size doesn’t fit all

“One size doesn’t fit all,” she said. “Taking that approach is often setting up an MGA for failure. MGAs and insurers need to talk about what the claims solution needs to look like, because it won’t always be the same and you have to find the best handler for the product.”

This is even more important under new Consumer Duty regulations, when insurers are required to comply with much stricter standards around service and value.

Again, this places a huge emphasis on communication through the claims supply chain.

Catherine explained, “Insurers are delegating the control, but not the responsibility. A decision made by a claims handler directly effects the insurer and how the FCA views that insurer, so we need to be clear to the MGA about what we require right at the beginning.”

Sharing

She also called for greater cooperation – and greater clarity – when it comes to data sharing. She said that with some much data generated, insurers needed to be clear about what they wanted from MGAs and instead of taking a primarily regulatory approach, consider how the right data can help mitigate the risks fraud.

“We need to work together to find meaningful ways of reporting data and information, and be mindful of the MGAs who are having to keep all of us insurers happy. To that end, we need to get better about what we’re asking for and understand what is effective reporting.”

Ultimately though, the end goal is providing an effective service to policyholders, and that will always come down to one thing.

Catherine concluded, “There are a million system solutions for great claims handling, but ultimately it has to be the human relationships with your business partners that get you through. You need to work with people who understand what your claims profile is and what your claims expectations are, and if standards are not being met you need to be able to have difficult conversations with them.”

The MGA Claims Conference 2023 took place in September at 155 Bishopsgate, London and was supported by Headline Sponsor Claims Consortium Group (CCG); Gold Sponsors: Activate Group, Carpenters Group, EDAM Group, Enterprise, LexisNexis Risk Solutions, Pulse, Value Checkers, and Wiser Academy.