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Insurance Business | 12 Jun 2014, 07:59 AM Agree 0
In the latest Insurance Business TV interview, Claims Central boss Darren Trott challenges insurers to trust brokers to handle low value claims.
  • Terry | 12 Jun 2014, 09:38 AM Agree 0
    I'll tell you why. Because brokers still believe 'ex-gratia' and commercial decisions are still acceptable reasons to pay an otherwise declined claim. Recently had experience with a very suspicious motor vehicle theft claim which was correctly declined in line with the relevant policy conditions. The broker tried to pressure the insurer to pay the claim because he was a major client of the broker .....give them a cheque book..you have to be joking!
  • Vic Broker | 12 Jun 2014, 10:29 AM Agree 0
    So was the broker & client charged with insurance fraud then Terry? You can't let one bad experience tar the rest of the brokers who for the most part are honest and trustworthy. I could reel off many claims that were unfairly denied and subsequently overturned... but I won't.

    The worst thing about this industry is how brokers and insurers can't work well together in certain circumstances and this is a classic example. Think of the cost savings we could have, and the improved industry image with fast claim payments (for genuine claims). You would of course build controls in to the system to manage the risks mentioned above.

    We need to embrace this new technology and for heavens sake trust each other!

    "Can't we all just get along....?"
  • TeeJay | 12 Jun 2014, 10:32 AM Agree 0
    Terry is right, the settlement authorities given out under 'Binders' in the past have usually ended in tears with brokers faced with a conflict of interest : keeping a client happy and onside and being disciplined on claims.
    It would also require a constantly funded imprest account and meticulous auditing; just more work for insurers.
  • Alan | 12 Jun 2014, 10:44 AM Agree 0
    Fundamentally, I can understand your viewpoint, however, brokers legally represent the insured and in providing a claims settlement authority or ability could place the broker in an awkward position from many counts particularly when the claim is 'iffy' or interpretation is grey (notwithstanding the broker may be acting as agent of insurer when settling the claim). A potential moral dilema is formed as the broker in certain circumstaces may need to weigh up the expectations of the insured and what the policy is meant to pay in the event of a claim. Simply, the person selling the cover should not necessarily be settling the claim due to the natural conflicts involved.
  • John | 12 Jun 2014, 01:17 PM Agree 0
    I believe what Trott is saying is 'like QBE' who provide brokers with a list of preferred suppliers who would apply the policy wording understanding their master is QBE who pays the bills hence very low risk of 'commercial decisions' or fraud.
    Further, Trott refers to technology and there is technology in the market that makes claim determinations eliminating the risk and conflict referred to above.
    This is, after all, for low value claims, so assume sub $10K or $5K
  • Darren Trott - Claim Central | 13 Jun 2014, 09:41 AM Agree 0
    The entire insurance contract is underpinned by the duty of utmost good faith, which applies to insurer and policyholder, as well as the broker acting on behalf of the policyholder. So, fundamentally, all parties ought to be able to work together to quickly determine whether a lower value, straightforward claim is covered by the policy or not. It's not rocket science. When this willingness to work together is coupled with innovative and transparent claims technology, the usual concerns about conflicts of interest begin to evaporate, as everyone can see everything. The rigour around the claim process is actually stronger than existing manual process, making it easier to manage policyholder expectations.
  • TeeJay | 13 Jun 2014, 10:21 AM Agree 0
    Darren Trott

    Your comments fall into the category of ' in an ideal world'.
    Don't forget, the contract is between the Insured and the Insurer, the broker has no place in accepting or denying liability other than by way of a delegated duty granted by the Insurer. When I mention conflict of interest I am anticipating a situation where a broker denies a claim on behalf of the Insurer in accordance with this delegated authority: at that time the concept of 'agent of the Insured' switches to 'agent of the Insurer' : there is a potential for conflict when we try to wear too many hats.
    Also, disputes arise not so much on whether the loss is covered by the policy but on the quantum.
  • Darren Trott - Claim Central | 13 Jun 2014, 03:27 PM Agree 0
    TeeJay,

    You're absolutely correct about the potential for conflicts to arise. The claim process needs to be transparent and robust enough to mitigate against these conflicts. It can be done and it exists now.

    I've seen many claims where really positive outcomes have been achieved, for all parties, when they are working cooperatively together in a transparent and open manner.

    My ideal world is one where it happens right across our industry and not just in pockets. That's going to require change in the behaviour of some insurers and brokers. I have no doubt the change will ultimately be driven by technological innovation, just as it has in many areas of the traditional underwriting process.



  • David | 18 Jun 2014, 08:52 PM Agree 0
    Terry, the broker's role is to represent the interests of their client. If they weren't pressuring the insurer in favour of the client they wouldn't be doing their job.
  • TeeJay | 19 Jun 2014, 08:18 AM Agree 0
    And, of course, the gorilla in the back office is that brokers want to be paid for doing this work on behalf on insurers; deja vu all over again ?
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