Frustration at low take-up of claims preparation

by Maryvonne Gray 24 Oct 2014

Frustration at low take-up of claims preparation

The New Zealand manager of LMI Group, Tony Howie, says he is frustrated that more brokers are not aware of what companies such as his can do for their clients.

Howie has told Insurance Business that while claims preparers are relatively new to the country, brokers need to push their services more for their clients, especially since most are already paying for this service as part of their insurance premiums.

“In the commercial arena particularly people pay a premium to buy claims preparation cover therefore the brokers are selling them something they’re not actually pushing,” he said.

“Because we work for the client they can ask us questions without fear of giving away information they shouldn’t to the loss adjuster or assessor working for the insurance company.”

He said while the cover was usually included for Commercial Property Damage and Business Interruption insurance, they could work on any kind of claim, commercial or domestic.

“The insurance companies will engage loss adjusters and investigators to protect their interests.

“In-house loss adjusters and loss adjusting firms who get all their work from insurance companies are not really going to champion the clients’ cause against insurance companies because that’s where their money is coming from. Most insurance assessors we deal with do try to be fair, but their primary role is to represent the insurer. Often the appointment of a claims preparer to represent the client works in the best interest of all parties.”

Howie says some claims preparers operating in New Zealand use the US style of working on a percentage basis, however LMI Group works on an hourly rate.

“With domestic, because the client isn’t going to get the money back, we agree on a capped fee up front,” he said.

He said over 50% of businesses fail after a significant loss often because the business is already working at full capacity and can’t devote the time and expertise required to submit a claim correctly.

“Having an expert explain all the nuances of the cover to the insured, assist in loss minimisation strategies, and prepare the claim in accordance with the cover and terms of the policy allows the insured to do what they do best – look after their customers and concentrate on getting the business back to where it ought to be, as quickly as possible.”

Before the Canterbury earthquakes Howie says there was a lot more suspicion about the work that they do. Now they are having insurers welcome their appointment in some cases.

And while this improvement is good, they have still faced resistance against offers to do presentations to broker groups to educate them on the appointment of claims preparers, he said.