Insurers must trust brokers to handle small claims settlement

Insurers must trust brokers to handle small claims settlement

Insurers must trust brokers to handle small claims settlement Insurers do not trust brokers with settlement authority to handle low claim, high frequency claims and make the process faster and more efficient.

This is according to Claims Central executive general manager Darren Trott. He told Insurance Business TV that anecdotally insurers seem opposed to delegated settlement authority.

“I see people sticking to the same way of doing things without giving consideration to making things easy for the end customer or broker. I have often heard the saying ‘we couldn't trust brokers with a settlement authority’ and I challenge that."

Trott says insurers should follow in the footsteps of QBE Australia in delegating settlement authority to brokers for small straightforward claims.

“Brokers are trusted financial insurance advisers. If we can trust brokers to generate premium income for insurers surely we can use their ability to understand the products and to determine low value, high frequency claims that simply make the claims process faster and more efficient for everybody concerned.

“For the life of me, I don’t understand why other insurers haven’t adopted this kind of initiative.”

He says settlement authority is also good news for brokers as they can demonstrate their true value when a claim arises.

This is not the only area where insurers are lagging behind. Turning to technology, Trott explains that insurers should introduce technology into the claims process. Underwriters use technology, allowing providing quotes for clients and close sales online but insurers are yet to embrace it.

“Major insurers in Australia still require policyholder to download PDF files and complete claim formals manually, scan and send them back,” Trott says. “That might have been cutting edge technology a decade ago but today it just doesn’t cut it.”

Click here to watch the full video.
 
10 Comments
  • Terry 12/06/2014 9:38:21 AM
    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!
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  • Vic Broker 12/06/2014 10:29:13 AM
    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....?"
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  • TeeJay 12/06/2014 10:32:37 AM
    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.
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