Brokers ‘appalled’ by how long it can take to get hold of insurers

JMG Group chief executive Nick Houghton has said it is “appalling” that it can take so long for brokers to get hold of insurers as the industry becomes more digitised.

Houghton told Insurance Times that his firm had experienced “too many examples” where it could be tricky to speak to an insurer about a client and that systems, at the moment, were “not quite working well enough”.

With technology such as artificial intelligence (AI) on the rise and the accelerating impact of the Covid-19 pandemic, insurers have naturally started to become more digitised.

For example, it was noted that the pandemic had fast-tracked the adoption and implementation of touchless claims – which refers to a claim filed with very little contact from a human, often via an app – during a roundtable hosted by Future Processing earlier this year (15 June 2023).

And insurtech Lemonade also revealed that it managed to pay out a claim in the UK without any paperwork in just two seconds with the help of its AI chatbot a day later (16 June 2023).

David Chapman, chief revenue officer at Applied Systems, said technology such as AI could “improve efficiency” and remove the need for firms to complete “mundane” tasks.

However, Houghton felt that digital processes still needed to be improved within the industry.

“It feels like a transitional phase towards more digitisation of the back office, but the processes are not quite there yet,” he added.

“We’ve got too many examples where it is just too hard to speak to somebody at an insurer about a client – we’re hanging on the phone for 40 minutes, which feels appalling.

“That is the reality of it and the systems are not quite working well enough.”

Customer complaints

Houghton made the comments as he urged insurers to also “not lose sight” of how consumers want to be serviced, as figures revealed that complaints made about insurance firms were on the rise.

He said it “was not surprising” that customer dissatisfaction was increasing if companies were not responding to their needs or taking too much time to resolve a claim.

Earlier this year (14 September 2023), the Financial Ombudsman Service (FOS) revealed that complaints over building, car and motorcycle insurance hit a five-year high in the first three months of the current financial year.

Some 3,869 complaints were made about car or motorcycle insurance, while there was a total of 1,776 building insurance cases recorded during the period.

By comparison, the FOS recorded 2,626 motor and 1,275 building complaints between April and June in 2019.

The regulator said that it expected insurers to treat their customers fairly and in a timely manner – and that it was “unacceptable” where complaints were driven due to a delay in claims being paid out.

Houghton said there were two things that he wanted insurers to do better in order to improve their service to customers.

“[One is] the insurer’s ability to turn things around – so that could be a renewal, as there are too many examples of renewal terms coming out too late, or an adjustment not getting processed in time.

“And of course the big thing is claims. Insurance is only ever about a promise to pay a claim if certain things happen.

“If that experience for a customer falls down at that very point, understandably the customer is very upset about that.

“It could be because of time taken to settle a claim, an insurer not responding – it could be any number of things.”

Consumer needs

The rise in complaints over insurance came at a time when new regulations mean a service driven market is more important than ever.

For example, the FCA’s personal lines pricing rules, which came into force last year (1 January 2022), mean insurers can no longer differentiate on the price charged to homeowners and motorists based on whether they are new customers or renewing their policies.

And the regulator’s Consumer Duty regulation, which came into force earlier this year (31 July 2023), requires insurance firms to review their products and services against a new standard of fairness.

Roi Amir, chief executive of Insurtech 50 firm Sprout.ai, said that “customers today are not willing to wait weeks and months for claims to be settled”.

“They expect high level of service from insurance and you cannot provide this high level of service if you don’t have the right tools and automation in place,” he added.

Chapman, however, added that robots were not able to deliver the advice and service that professionals can.

“It’s not for me to tell insurers how to run their businesses, but as we increasingly become more digitised in some of our processes, as a market, we must not lose sight of customer [needs],” Houghton said.

“A customer is a person, it might be a business, but it is still a person that is buying the product.

“That person, just as I would want to, wants to speak to somebody when they are not quite sure, things are not going in the way they would like or things are taking a little bit too long.”

Despite finding it hard to get in touch with insurers sometimes, Houghton said brokers had a responsibility to help.

“This is where you need a broker to come in,” he added.

“We’ve got a job, as insurance brokers, to help insurers. That’s part of what we do.”