The insurance industry has been awash with insurtech players promising massive savings in recent years all as a way of luring new business. But what if those claims weren’t being made simply by an insurtech, but by one of the industry’s most highly regarded MGAs?
Step forward, Pen Underwriting which believes it is offering a solution that could save the industry around £100 million a year.
Nine months on from the launch of what it described as a “comprehensive overhaul” of its claims process for escape of water, Pen has enjoyed significant reductions in the average claim lifecycle and average claim spend – significantly exceeding its own targets.
“The impact of this new claims process has been transformational,” said Gareth Crosbie, claims director for Pen Underwriting.
Crosbie explained that the MGA, along with third party administrator Davies Group, recognised there was a “different approach” needed to the handling of water claims and so the companies combined their expertise with “readily available and new technology” in both the training of its claims handlers and in its interaction with customers meaning it can quickly identify a water claim’s severity and direct it appropriately.
“This minimises the inconvenience of a claim for the customer, increases customer satisfaction and reduces both the claims lifecycle and indemnity spend,” he said.
The result is that Pen has been able to achieve a 15% cut in average spend on water claims and a 46% reduction in the average claim lifecycle. This has been achieved while escape of water remains overall one of the largest perils in domestic property claims – the Association of British Insurers estimates that they cost insurers around £1.8 million every day. Slashing 15% from that collective total would lead to the headline cost saving of £98.5 million.
However, Russell Crewe, managing director at Davies Group, believes the biggest impact the initiative has had is on reducing inconvenience to customers – allowing remote evaluation and quicker decisions.
“Using video technology from the very first notification of loss allows early identification of any customer vulnerability together with the appropriate level of response,” he said. “It therefore also enables us to quickly discuss and agree the right solution with policyholders on every loss.”
By using video to identify and implement the right solutions, claim validation appointments are often completely eliminated. Virtual reality technology can also be used to intensively train the handlers within the claims hub and explore creative solutions. The results, both firms suggest is “the best possible” customer outcome.