Global Leaders Forum: Director action

Claims inflation topped the agenda for the claims directors’ breakfast at this year’s Global Leaders Forum. Chaired by Insurance Times deputy editor David Blackman, discussion began with views on the government’s plans to reform the claims process.

AXA claims managing director David Williams said he hoped the Young report, published the day after the forum, would support the main proposals of the Jackson review into civil costs, and criticised those lobbying against the review in the name of consumer interest.

“I am hoping that when we see the details of Lord Young’s report it will become abundantly clear that the package of proposals [in the Jackson Review] is the best for the man in the street,” he said.

Cunningham Lindsey corporate and technical risk director Jonathan Clark pointed to lingering public misconceptions about the insurance sector. The industry had improved its image following a proactive response to recent floods, he said, but it remained a struggle for insurers to gain the trust of claimants in personal injury cases.

The directors felt this was particularly the case in the provision of rehabilitation services – efforts by insurers to aid claimants’ recovery from an incident continued to be viewed with suspicion.

Fees issues

Lorega operations director Angus Tucker said many claimants believed that providing a contingency or success fee to a solicitor would guarantee a better outcome rather than dealing directly with their insurer.

He added that, in some cases, claimants could end up paying four or five times more if they opted for a claimant solicitor instead of dealing directly with their insurer, and the onus was on the industry to educate the public about the nature of the claims process.

Brit’s UK head of claims, Stephen Roberts, said it was unacceptable that claimant solicitor fees in many cases exceeded damages awarded to the claimant.

Chubb UK & Ireland claims manager Lynn George believed such negative perceptions ultimately proved harmful to the claimant, particularly when they hired the services of small law firms with little expertise in dealing with complex claims. “What we are finding on larger, more complicated claims is that they really don’t know what they are all about,” she said.

As a result, insurers met resistance when trying to broach the subject of rehabilitation or fair settlement, she argued. Lack of trust by claimants remained a fundamental problem. “They can’t believe that you as an insurance company actually do want to try and do a reasonable settlement,” she says.

AXA’s Williams felt that insurers sometimes found it difficult to offer claimants services such as rehabilitation. “Because you are blocked off by the claimant lobby, and they are not particularly active about getting people into a programme of rehabilitation unless there is a commission involved, you miss the opportunity to get people fit again.”

Cooper Gay claims director Peter Dalton said insurers needed to be more proactive when making decisions on claims, instead of “hiding behind lawyers”.

George responded by pointing out that the onus was on insurers to train people to become decision-makers. “It comes down to the calibre of staff you have. If you employ decision-makers, they will make decisions. It is about getting those good people prepared to do that,” she said.

All the directors felt the sector needed to become more proactive on claims. Roberts believed the recent record personal injury payout in the Chrissie Johnson case was the most recent in a series of missed opportunities by claims departments to negotiate with the claimant and settle early.

Road traffic accidents

The conversation turned to Ministry of Justice reforms of the process for dealing with low-value road traffic accident claims. Despite concerns, AXA’s Williams and Brit’s Roberts felt the process had worked better than expected, but that an insurer should not have to use the process if they adopted efficient claims-handling practices.

Insurance Times’s David Blackman pointed to recent CII research showing the lack of claims directors on industry boards, and asked if these managers needed to develop a more powerful voice within the sector.

However, both Roberts and Clark believed claims was now much better represented on boards, while George felt that interaction between underwriting and claims departments had greatly improved.

The conversation concluded on the subject of the employers’ liability trigger litigation ruling. Roberts said he was troubled by the case’s implications. “It creates a dichotomy and that is not good for anybody,” he said. “Some people won’t get full recovery – and that can’t be right if they have been injured.” IT