August 20, 2009

A war of words – or of subtle nuances at least – seems in danger of breaking out between brokers and insurers over claims.

In the wake of new research suggesting that his members are spending a lot more time these days negotiating fairer pay-outs for their clients, BIBA guy Eric Gallbreath has come perilously close to suggesting the unsuggestible.

Research among 350 BIBA members showed that two thirds of brokers think insurers are increasingly trying to wriggle out of paying claims. Brokers reckon they are having to fight harder than ever for their clients. Twenty per cent improvements on original claims offers are said to be commonplace, while 94% of brokers say they have overturned outright claims rejections.

BIBA’s Gallbreath has words to spare: “These statistics seem to suggest a too frequent reduction in the amount offered in claims settlements – a position that could ultimately lead to more customers believing they need to inflate claims in order to respond to what they expect will be the insurer’s initial offer.”

An ABI spokesperson responds: “Insurers believe that fraud rises in a recession and will certainly, in the interests of honest customers, be extra vigilant for suspected fraudulent claims. Being tempted to inflate a genuine claim is fraud, and runs the risk of harder to obtain and more expensive future insurances and credit.”

On a technical note, Bankstone News suspects that being tempted per se (whatever the source of temptation) is highly unlikely to be construed as constituting an act of fraud by any reputable legal authority. The ABI’s legal fact-checkers were probably busy that day.

Allianz claims bloke Roy Hebburn meanwhile is diplomatically firm but fair: “The fraud threat is a very real one that increases during recession, but it is vitally important that our counter fraud activity does not impact upon the service delivery to our honest customers, who are far and away in the majority. We will happily engage in any subsequent debates.”

Let the debating commence!

Could global warming get worse?!


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