Royal & SunAlliance's (R&SA) UK personal lines managing director Steve Broughton has warned brokers that he will take R&SA's personal lines claims handling in-house within 12 months.
R&SA has piloted the scheme for the past six months with 200 brokers and will gradually roll it out to its 3,000 motor and household brokers.
The insurer already handles claims for 80% of its 3,000-plus commercial brokers, after introducing the idea 12 months ago.
Broughton said in-house claims handling was cheaper and quicker.
"The average broker-handled motor and household claim end cost has been higher and the speed has been slower because we've not had direct control," he said.
"What we've been able to prove is that direct contact allows us to give better customer service because we get notified faster and we deal with it faster.
"We can control the quality of work because we can get a higher number into the recommended builders or repairers, which also allows us to control the cost."
Broughton said he expected brokers to be apprehensive about instructing their clients to contact the insurer direct, but hoped they would be persuaded by the success of the pilot.
"The critical thing is that we're not looking to exclude the broker from the process, we want to keep them in the picture, so they know when the claim has occurred and when its been settled," he said.
Commercial claims and corporate director Rod Kitchen said commercial claims handling procedures were decided "in partnership" with brokers.
"Some brokers are happy for us to handle every claim, some want us to contact them before calling their client and a few prefer we don't do it at all."
He said R&SA was currently piloting a computer system that would allow brokers to view the progress of their commercial claims online.
Norwich Union introduced in-house claims handling on Club-branded products three years ago and now handles claims for 12,000 of its brokers.
Fortis Insurance also does so on a much smaller scale.
British Insurance Brokers' Association (Biba) chief executive Mike Williams said brokers must be kept "in the loop" on claims because they were a vital part of the service brokers provided their clients.
"When this idea was first mooted, brokers certainly didn't like it because a key broker service is the rapid and fair settlement of clients' claims," he said.
Williams said brokers must be able to intervene in the process if their client was unhappy.
We don't want insurers to turn claims down without the broker knowing," he said.
