Supply pain

The bell has tolled for ETWB on its lucrative deals with two major insurers. But what will Allianz and RSA’s decision to review their providers mean for other similar outsourcing firms? Will more insurers follow suit by bringing these and other services in house?

Both insurers are making changes to the way they handle their motor claims and to save costs they will handle certain parts of this process from within their own businesses, meaning firms like ETWB will see less work coming their way.

Allianz pointed out that in its latest half year results gross written premiums in its retail business fell 20%, meaning the number of claims are likely to reflect the drop and result in less claims, which ultimately prompted the discussions with ETWB over its services to that area of the business.

“In the retail business, the broker motor account continues to see GWP fall as we take the corrective action needed to restore this account to profit, and I anticipate that there will be further reductions in top line as we progress through the year,” said Allianz UK’s chief executive Andrew Torrance last month.

Combined with RSA’s decision to bring the total loss settlement sector of its motor claims process back in house, more firms in the supply chain could lose key business if insurers decide that they need to review their outsourcing agreements in an effort to turn their losses in to profits.

A senior source in the claims outsourcing sector fears that the decisions made by large insurers could result in supply chain firms like ETWB facing difficulties.

“[Insurers] will now be handling more claims internally. The balance of their businesses has changed,” the source said.

If the trend continues, will the supply chain market turn to smaller, up-and-coming insurers to prove their worth?

See story: Insurers pull ETWB work to bring valuations in-house