ILC ARTICLE

Insurers urged to simplify claims or risk capacity

14th December 2021

Home insurers have been encouraged to simplify the claims process or risk an exodus of small businesses that could create a growing capacity gap in the supply chain.

Steve Gelder, CEO of Lincolnshire-based construction company The Gelder Group described today’s trading conditions as the toughest he’s experienced in 34 years and urged insurers to recognise the challenges their supply partners are facing.

He said, “Large projects are still playing catch-up after Covid and they are sucking up all the best tradespeople. There simply aren’t enough skills around now, and suppliers are having to pay excessive wages to get them. There are also material supply issues and depressingly high inflation.”

Long wait

And if suppliers are gritting their teeth and waiting for better days to come, Steve warned that they may have a long wait.

Speaking at the I Love Claims Home & Property Claims Conference held in Coventry in November, he said, “Going forward it is looking even more difficult. Rates aren’t realistic, insurance teams are under too much pressure and many people are leaving the industry or demanding unrealistic pay increases. Compliance has become incredibly onerous now too and there is just too much paperwork.

“Debt is also still an issue. On 30 September it was taking an average of 58.3 days for an invoice to be settled. That’s up from 48 days a year earlier. Suppliers can’t operate like that, and many are now reducing insurance work and looking for other revenue streams.”

Solution

However, Steve said that insurers hold the solution in their hands, and by streamlining the claims process they could go a long way to easing the pressures on supply chains while adding efficiencies to their own business.

He argued that there are too many intermediaries in a claim, with contract managers often required to deal with the policyholder, loss adjuster, surveyor, technical manager, performance manager, internal customer and structural engineer.

“It’s too time consuming having to deal with all these people,” he said. “Contract managers have enough on their plates.”

Resilience

He said this is just one example of a claims process that has become incredibly inefficient. But it doesn’t have to be, and he has compiled a five-point plan that he believes could add resilience to the sector:

Reduce the number of people managing each claim
Move to a quarterly schedule of rates review
Work harder with payments
Deal in fact by accepting that materials have gone up in price and people want higher wages
Look after and value your building repair

Steve concluded, “To survive you have to be likable and trustworthy and there must be mutual respect, because, ultimately, we work best with people we like and people who know and respect our brand.”

ILC Home and Property Claims will return to live events when it hosts the Environmental and Sustainability Specialist Conference on 31 March 2022.