November 27, 2009

Funny you should ask!

Bankstone’s Dickon Tysoe has penned a most instructive article for the current edition of acclaimed insurance industry organ  Broker’s Monthly addressing precisely that inquiry.

Want to know what it says? Read on!

Reducing overheads, enhancing customer service, strengthening your brand. If any of those appeal, you might want to consider outsourcing your First Notification of Loss (FNOL) service to a specialist claims handling company.

Outsourcing FNOL can deliver all of those benefits – but first you need to find the right claims-handling partner. Brokers have traditionally – and rightly – been wary of entrusting their customers to a third party. But keeping claims in house can be expensive and isn’t necessarily the best route for you or your customers.

If you are thinking about outsourcing – and it is certainly worth considering – choose your partner with care. The company you choose should have skilled customer-focussed claims handlers, They should also have a technology platform that give you ready access to the information you need to understand the impact of claims impact on your business and to manage your claims handling partner effectively.

The right provider will be able to take on all aspects of your claims whilst ensuring that you retain managerial control and fulfil your TCF obligations. They should handle all your claims calls and all postal communication – allowing you to reassign staff to income-generating activities.

One potential advantage of outsourcing is being able to extend the hours during which you offer your customers a claims service. So make sure the firm you choose offers extended working hours. The right partner may also be able to provide you with the option of taking your calls temporarily should your phone lines or systems ever go down.

Look for a firm that will work with you to minimise notification times, maximise your return from income-generating claims, and allow your panel insurers to maximise their intervention opportunities, thus improving the profitability of your insurer accounts.

The right partner should also be able to demonstrate that they have an effective strategy in place for minimising claims leakage to other organisations, such as recovery operators bodyshops and claims management companies, over whom you have no control and from whom you obtain no income.

They should be ready and able to work with you to ensure that your panel insurers receive prompt and accurate data in a format that minimises their administration costs. Equally, you need to be confident that you will always have the information you need to manage your relationship with your insurers – including a full suite of management information (MI) reports. These should offer reports tailored to your specific MI needs – whether in terms of controlling claims costs or understanding their impact on the different policy types in your portfolio.

Outsourcing can also be a way for brokers to enhance customer service without sacrificing control over the claims process. For most types of personal lines policies – including home, car, motorcycle, taxi, caravan, commercial vehicle, pet and travel insurance – you should be able to find a service provider who will handle all FNOL aspects of a claim including external post and contact with the third party.

Consistent service is key. Your service provider should be able to handle all your claims in a consistent manner. If you have a panel of 10 insurers, each will handle claims in a slightly different way. Your outsourced claims partner should be able to “homogenise” the service your customers receive to a uniformly high standard – regardless of which insurer you have placed them with.

A typical broker’s book might have an incident rate of something like 10%. Simplistically, that means the average customer can be expected to claim once every ten years. Clearly, the way claims were handled 10 years ago is very different to how they are handled today. So your selected partner should employ claims handlers who understand this, who treat each customer with respect and empathy, and can manage their expectations appropriately. They will also be fully up to date with the latest changes insurers have made to their processes.

Technology is another key consideration. From the minute a claim is reported, you should expect to have real-time online access, and thus the ability to take a view on whether it is something you would want to get involved with directly. Outsourcing should absolutely not mean distancing yourself from an awareness of what claims your customers are making. Indeed, for many brokers it can significantly enhance this understanding.

Every broker is different. Each has their own specific requirements, particularly in niche sectors of the market. This is precisely where a good claims handling firm excels, offering you the ability to work closely with your underwriters when developing new schemes while retaining close control over service standards and costs.

At the beginning of this article we flagged up the issue of brand. Many claims handling companies now offer an own-branded service. This can and should include everything from answering the telephone in your company name to branded stationery for all correspondence.

An own-branded service can give your customers the comfort of dealing with a trusted name at the time of an incident and deliver a service consistent with your brand values and service offering.

If the customer perception is that they are dealing directly with you, they will quite naturally expect the person to whom they are talking to know all their details. The only way to achieve this is to select a claims-handling partner who can access your customers’ policy records seamlessly, via a link into your software house.

This allows call-handlers to verify customer details directly from your records, transfer this data into their claims-handling system, and be discussing the details of the claim within seconds of answering the phone. Another advantage of this approach is its potential for providing insurers with details of incidents along with full policy records – especially important with delegated scheme business.

Above all, choose a partner who offers all of its clients a high standard of account management, personal attention and innovation. Look for a firm that makes the effort to understand your brand, your business model, and your marketing strategy – one with the eagerness and the understanding to contribute to your business success on a broad front. And don’t forget to ask for evidence of customer-satisfaction feedback. After all, you need to be sure your customers will be getting a service at least as good as you would give them yourself!



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