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A look at trends in the claims industry in the wake of COVID-19

A look at trends in the claims industry in the wake of COVID-19 | Insurance Business

A look at trends in the claims industry in the wake of COVID-19

Even among the chaos of the COVID-19 pandemic, Gallagher Bassett, a top provider of claims management services across multiple lines of business, says it is very much open for business and continuing to deliver services to customers in their time of need.

In the webinar Adapting with confidence to COVID-19: Insights and implications for the insurance industry, leaders at Gallagher Bassett discussed current and near-term effects of the coronavirus on business operations for the claims management industry. 

In order to adapt, the firm moved its entire customer-facing and operations functions to a remote work environment and, through technology, has enabled the new “business as usual” to deliver claims solutions to clients.

“For an industry that’s been criticised in the past as moving with the speed and agility of a supertanker, I think what has been achieved has been a great result in the last few weeks,” said Gordon Vater, director, carrier practice at Gallagher Bassett.

While they continue to deliver core expert services, new techniques are being employed to maintain service standards. For example, site visits are being done using remote technology risk consulting training that is being delivered virtually. In the same way, insurers are being challenged to respond with new methods and strategies to resolve some of their customer issues.

While industry response has been laudable, Vater says carriers are coming under scrutiny and criticism with regards to their handling of business interruption and financial losses.

“This doesn’t seem to be going away, and is in fact building, not just in the UK, but across the globe,” he said. “The sector’s brand and reputation are being hit, despite all the good work that has been done and criticism is not just from the public, but governments and elected representatives.”

Because business interruption losses are complex, Vater says the key is to digest customer information, determine the coverage and then communicate quickly to the customer whether they are covered or not, in order to help clients make informed decisions about their businesses.

“Empathy is critical with these claims taking into account the current environment,” he added.

An important thing to note is the sector is paying out huge sums on valid claims. The Association of British Insurers (ABI) estimated insurers in the UK will pay an excess of £900 million to £1.2 billion on these losses. However, there are many cases in the market where customers feel in limbo.

Vater says there are three scenarios: The first is customers with no cover; claim handlers should quickly communicate the reasoning why policies are not going to respond to customers quickly and with empathy. When done properly, customers are more willing to accept the decision. In the case of covered clients, liability in quantum needs to be established quickly, with payments going out to customers as soon as possible. One challenge to note, according to Vater, is obtaining accurate information from policyholders to substantiate claims.

The final pot contains the question marks, which attract Press and other interest. Questions arise around what constitutes damage and how denial of access is interpreted. These are the questions that need to be resolved quickly otherwise noise will continue and the sector will be tarnished, said Vater.

“If clarity in this third pot is not resolved, the good work that has been done will be hidden behind the juggernaut of negative attention and will continue to potentially erode our wider reputation,” he added. “This will have the potential to have a lasting effect with some customers.”

In the interim, insurers and Gallagher Bassett are set on rapidly triaging and settling valid cases, while prioritising the protection of clients’ brands, particularly when it comes to customers with no cover.

“It is an ever-changing landscape, and one Gallagher Bassett, and the sector as a whole, will maintain a close eye on. Watch this space.”

In the webinar, leaders at Gallagher Bassett also discussed the execution of their business continuity plan, supply chain management in the COVID 19 environment, and what we can expect in the future. Click here to download.