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Whiplash reforms – key takeaways for brokers

Whiplash reforms – key takeaways for brokers | Insurance Business UK

Whiplash reforms – key takeaways for brokers

When Steve Molloy (pictured), director of commercial sales at the aftercare and replacement vehicle services firm AX (Accident Exchange) joined the business five years ago, he did so with a clear mission in mind – to craft transparent and trusting relationships across the insurance market. While, traditionally, AX’s relationships with insurers have been quite fraught, the last five years have been a bridge-building endeavour, creating relationships founded on mediation not litigation, friendship not conflict.

This changing focus does not extend just to the firm’s insurer partners but also its broker partnerships. Molloy noted that brokers can sometimes be treated as the “poor cousins” of the insurance industry, often the last to know about critical legislative and landscape changes. However, AX aims to move further into the retail and commercial broker space, an ambition reinforced by a significant investment in a new FNOL platform.

“But beyond this, we’ve recognised the real opportunity to be a thought leader in the broker space when it comes to legislative changes,” he said. “One of our big USPs now is focused on how we can offer great transparency to brokers… Because the more knowledge they have, the better they can develop their customer offerings to moving forward, particularly when it comes to [client] retention.”

AX has had multiple opportunities to produce thought leadership for the broking sector in recent years, and one of the key areas where brokers have required insight and information has been the area of whiplash reforms. Molloy has been able to offer an independent viewpoint, he noted, as lawyers and insurers are the two biggest stakeholders when it comes to the reform – and he is neither. Therefore, he has availed of every opportunity to engage brokers on this subject before, during, and now post the rollout of the government’s claims portal.

Read more: Putting the Official Injury Claims Service on trial

“The dust is now settling,” he said, “but we’re not quite there yet as it’s still very early days. There hasn’t been a huge amount of PI claims that have actually come out the other end and settled, as this only came in on May 31. Some have started processing but there’s still a lot of bottlenecked claims both within the process and still waiting to go in the process.”

With this in mind, Molloy has evaluated the main insights relevant to brokers that have emerged out of the whiplash claims reforms to date. First and foremost, he said, is the new understanding of the real value that legal expenses insurance (LEI) provides to consumers. Therefore, brokers should be focusing on this area and seeking out means of increasing its penetration rate among their clients.

“There are some brokers who don’t sell LEI, because it is quite complicated,” he said. “But now there is real value, and so I think there is an ease of upselling LEI and therefore getting a greater penetration of the market and greater revenue. So, it’s just about making sure that they check the cover that they have in place and that it provides the personal injury cover, and that it has the services that come off the back of that.”

His second recommendation is that brokers make sure they’re choosing the right solicitor, as the nature of PI injury claims means that there are ‘cherry picker’ lawyers out there, and brokers must protect their clients from these. The broker has to provide a consistent service, he said, and make sure that a chosen solicitor will still provide the same service levels. If they don’t, this will inevitably fall back on the broker and the customer will not seek renewal at the end of the year.   

“I remember hearing [that] claims is the moment of truth for the customer, with regards to the relationship they have with their broker,” he said. “And so, the claims function, or whoever they outsource their claims to, represents a chance to provide the service that the customer expects. And if that service is there, there is a much higher chance of the customer renewing at the end of the 12 months.”

Read more: Major insurers vow to keep personal injury claims moving amid pandemic

Along that line, Molloy said, a further recommendation is for brokers to remain wary of ambulance-chasing techniques. There are still unscrupulous claims management companies (CMCs) out there that are using digital tools such as Google AdWords to attract people who have been injured or have had accidents. These CMCs are pretending to be legitimate claims departments by advertising themselves as such and answering the phone simply as “the claims department”. The consumer, who is already in a vulnerable position having had an accident, will therefore not understand who it is that they’re phoning.

“That fraud element is still there. Don’t be naïve,” he advised, “keep a lookout and make sure you’re constantly mystery shopping your own website and Googling your website to make sure you’re not coming up against this target. If you’re leaking customers to competitors, that’s revenue that you’re missing out on.”