Omicron impact: insurers failing to answer phones?

Omicron impact: insurers failing to answer phones? | Insurance Business Australia

Omicron impact: insurers failing to answer phones?

The Omicron COVID-19 variant continues to wreak havoc with NSW and Victoria reporting tens of thousands of new infections each day. Staff shortages, health orders mandating isolation and government restrictions are driving business leaders to distraction.

So for brokers, what is the main impact of the ongoing Omicron fuelled COVID pandemic?

Carl King (pictured), managing director of Perth-based Apollo Risk Services, said the main impact for brokers is worsening turnaround times.

“I would say at least five times what it was pre COVID,” said King.

He said insurers are not addressing this concern.

“No. They are not responding. You could probably ring up 100 brokers and I think 100 brokers would say they are very disappointed with the services from the insurers,” said King.

In fact, he’s concerned that many insurers are treating COVID-induced delays, caused by working from home disruptions and now staff shortages, as the new normal.

Read next: Brokers on Insurers 2021

“I think now they want this to be the new norm and we can’t afford it as an industry to have slow responses. We can’t because people are people, if something’s urgent they want an answer,” said King.

The Apollo managing director, who has 12 direct employees and 70 ARs in WA and around Australia, said, currently, insurers just aren’t answering their phones.

“My claims department has come to me with their hands in the air saying, ‘We’ve been on the phone for 45 minutes and as soon as we get through we get cut off!’” he said.

“There’s no particular insurer that is better than the other. So, I can’t say it’s QBE not doing the right thing, or Allianz - they’re all not doing the right thing!” added King.

He said the current situation is very frustrating for brokers but more so for their clients.

“The purpose of paying for insurance is to make sure that your claims get paid at the end of the day. But if it takes a lot longer than what it should because of long response times, it’s frustrating for everybody,” he said.

He gives the example of a property damage claim. The cost estimate has gone up 10 times since an original estimate 12 months ago.

“This is an absolute nightmare. It started up at a $20,000 estimate and now it’s at least up to $250,000 after 12 months,” he said.

The case involved a lightning strike at the office belonging to one of King’s clients.

“The claim hasn’t been managed correctly for six months and the client is temporarily accommodated with his business and that is obviously costing the insurer a lot more money than it would if the insurers appointed proper builders to do the job,” he said.

King described the communication between the builder and insurer as “negligible” and exacerbated by the complicated chain of communication – over which the broker has little control.

“There’s a chain of communication which we have to go through,” he said.

“We cannot go direct to the builder and say, ‘Hey, you’ve done this wrong, you need to fix!’ We have to go through the insurer, who then tells the loss adjuster, the loss adjuster will try and get hold of the builder, then the builder will go back for confirmation from the insurer,” explained King.

Could an insurtech sort this issue out with a clever, responsive software platform?

“No. We need people,” said King. However, he added, a software platform works well for more standard claims, like a smashed window.

“That’s what computers are there for, getting rid of the mundane, the turnover claims – that’s beautiful,” he said.

Read more: How was IAG able to settle a claim in just 24 minutes?

However, step outside the more standard claims and wait times can be very long, partly because, King said, insurance companies try and apply a standard claims process to more complicated claims, like the lightning strike.

“It’s frustrating because they put that in the same process as the window claim and it won’t work,” he said.

This is where insurance can really make a difference, said King.

“This is when it comes to people and their livelihoods and their emotions because their business is turned upside down and they can’t earn any money,” he said.

King said he felt like he was “bashing the industry” but said he’s just frustrated about turnaround times and the lack of communication from the insurers.

“But remember,” he noted, “the majority of brokers used to work in insurers. That’s where we got our grounding from, that’s where we got our education from, that’s where we got our experience from, so we know what happens.”

He said a lot has changed in the insurance industry over the last 15 years.

“But they need to bring people back. They need it. The process won’t work without people,” he said.