Claims Excellence Awards: Service laid bare

Brokers hold the key to understanding which insurers settle claims fairly and speedily. As one broker put it: “If the insurer decides to take the risk in the first place, they should expect to pay out on the claim promptly and fairly.”

Differences in how brokers perceive insurer service for “claims fairness of settlement” and “claims speed of settlement” are two elements of service measured by the Insurance Times annual Broker Service Survey. The results give a clear indication of which insurers deliver and which don’t.

How important to brokers is good claims payment service?

The most recent survey shows that more than 90% of brokers consider claims speed and fairness of settlement of “vital” or “great” importance – a consistent finding for the past three surveys.

The 2010 survey results also show, for the first time, that personal lines brokers clearly prioritise claims-handling categories above all other service categories. But commercial lines brokers see claims handling as one of several almost equally important service elements provided by insurers.

Do insurers settle claims quickly and fairly?

Most insurers understand the importance to brokers of fair and efficient claims payments and provide at least a satisfactory level of service.

But the bar has been set high. Among commercial lines brokers, receiving any less than 90% satisfactory or better ratings for “claims fairness of settlement” puts an insurer in the minority. The bar for “claims speed of settlement” is lower, at 80%, while for personal lines receiving less than 70% “good” or “excellent” ratings puts an insurer in the minority.

How do personal and commercial lines differ?

Personal lines brokers’ needs appear to be well served. Advantage were rated “good” or “excellent” for both categories by at least 70% of brokers. It is necessary to look at the number of “excellent” ratings to differentiate between personal lines insurers. Only two names stand out – Chubb and Hiscox.

Chubb received more than 50% “excellent” ratings for both claims handling categories, while Hiscox received more than 40%. All other insurers received less than 30% “excellent” ratings, some none at all.

Insurers’ claims payment service received lower ratings from commercial lines brokers, with brokers differentiating between insurers’ ability to settle fairly and quickly. Only Chubb, Hiscox, CNA, Ecclesiastical and ACE received more than 50% “good” or “excellent” ratings for both claims categories, with Fusion joining this elite for “fairness of settlement” only.

On “claims fairness of settlement”, most of the 35 insurers surveyed received at least a satisfactory rating from more than 90% of brokers. The exceptions were AXA (87%) and Sabre (80%), while the percentage fell dramatically to 61% for Tradex and 57% for defunct insurer Quinn.

Commercial lines broker ratings for “claims speed of settlement” were lower overall. For this service category, only 18 of the 35 insurers received at least satisfactory ratings from more than 90% of brokers, with a further 13 at least satisfying more than 80% of brokers.

Three insurers – Provident, AXA and Sabre – were rated satisfactory or better by more than 70% of brokers. Again, Tradex and Quinn lagged behind, only 44% of brokers rating Tradex satisfactory or better.

Lower ratings for “claims speed of settlement” may reflect a deliberate policy – delaying payment, even slightly, can improve an insurer’s results – or indicate poor administration, or a combination of both.

What does broker feedback indicate?

The Broker Service Survey provides plenty of opportunity for brokers to give feedback on individual insurers, without fear of damaging their insurer relationships.

Feedback is both positive and negative, often about the same insurer. It reflects broker frustration at some of the complexity insurers introduce into claims processes.

For the best insurers, comments such as “they want to pay” or “they offer an efficient service that keeps clients happy” are not uncommon.

The message is clear; brokers know which insurers pay up fairly and quickly and can advise customers accordingly.