The Broker Focus
The Broker Focus
Getting the relationship right
01 Modern Claims
Motor claims providers have a responsibility to engage with their broker partners; to understand what the broker values and the experience they wish their customers to enjoy
July 2017
The Broker Focus
Jason Tripp Jason Tripp examines the present and future state of the market and what brokers are doing in response to the challenges they are facing in the current climate.
Q
What have been some of the biggest challenges in the broker market over the last few years, and how have brokers responded to these?
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The challenge for brokers is how they distinguish themselves from their competitors, particularly when a large proportion of their business comes from price driven aggregator sites. The most competitive brokers build a customer proposition around their strengths in niche markets, and forward thinking brokers will focus on the entire customer journey, building their specialism into the experience customers receive at the point of claim. If the customer has a specialist vehicle, for example, then they want that to be recognised, perhaps with specialist repair facilities or suitable replacement transport, but also in respect of the expertise of the claims handler. Connecting up the claims experience with the design and sale of the insurance policy is really important. Brokers also stand out by embracing new ideas and using technology to add to their proposition; motor policies including a dash cam is a good example. Rather than simply being a ‘give away’, the dash cam provides valuable information during a claim, providing a practical benefit to the customer.
Q
Do you believe there is a “whiplash epidemic” in the UK claims sector, and how will this be tackled by the postelection government?
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We should make a distinction between two broad categories of personal injury claims; those that occur in ‘real-time’ and those which are pursued some considerable time after the incident. ‘Real-time’ claims occur when the motorist is seeking assistance right after an accident. In this situation, the customer is primarily interested in getting back on the road, and vehicle damage and replacement transport are usually the top priorities. Claims made some time after the accident are often produced from historic data, usually by a claims organisation canvassing people who may have had an accident in recent years. I don’t believe that there is a whiplash epidemic in real time claims; the broker, the insurer and the claims handler are focused on resolving the customer’s immediate problem. If that problem includes personal injury, then the priority will be the customer’s safety, care and ultimate recovery. Coplus helps some 100,000 people a year, needing fast, practical assistance following an accident. If a customer complains of feeling unwell or being in pain, then they have a legal right to seek compensation. But not all injured people claim; a quarter of our entitled customers choose not to because they feel it is too much hassle. Historic claims are different. The immediacy of the situation is removed and the customer has more time to consider their position. I am not saying that the practice of canvassing claims from historic data has resulted in a whiplash epidemic, but it certainly produces a very different profile of personal injury claim, introducing the very real problem of non-compliant and sometimes aggressive cold calling.
02 Modern Claims
Any analysis of the whiplash reforms must start with the customer We now know from the Queen’s speech that the government intends to see through its manifesto pledge to “crack down on exaggerated and fraudulent whiplash claims” via the new Civil Liabilities Bill. Whilst there is little further detail, we believe the bill will be a ‘cut and paste’ from section 5 of the Prison & Courts Bill, featuring a personal injury compensation tariff and increased small claims limit. However, it’s unclear if the bill will include the Conservative’s promise to consider a ban on cold calling claims companies. We believe this is an essential feature of any effective plan to reduce fraudulent and exaggerated whiplash claims.
July 2017
The Broker Focus
Motor claims providers have a responsibility to engage with their broker partners; to understand what the broker values and the experience they wish their customers to enjoy We still don’t know whether the previously proposed tariff and small claims limit rise will remain unchanged, but we do know that these reforms will go ahead by 2019, with Parliament deciding to sit for two years rather than one to allow extra time for Brexit legislation.
Q A
How will brokers be impacted by the proposed whiplash reforms?
Any analysis of the whiplash reforms must start with the customer. The 2013 Thematic Review on Motor Legal Expenses showed that consumers have a very poor understanding of legal expenses insurance. This may have improved since the FCA’s review, but a gap remains between the customer’s perception of legal services and the reality. This knowledge gap is set to widen with the reforms, leaving some customers without access to the legal services they believe they are entitled to. Never has good quality ‘whiplash reforms ready’ legal expenses cover been more important for the motorist. This is going to be a challenging arena for brokers and one which will require serious and immediate attention. Brokers need to consider their approach to the ‘fair treatment of customers’, in particular the impact the reforms will have in respect of outcome 5 ‘providing customers with products that perform as they have been led to expect…’ With customers already unclear about Legal Expenses, brokers will need to work even harder to select a product and explain it at the point of sale in a way that the customer will really understand. That’s on top of providing a claims service that delivers on those promises. There is a risk that customers will hold the broker responsible if the legal assistance they thought they would get isn’t there. Of course, it isn’t the broker’s fault that the government plans to effectively remove access to legal services for most motorists, but will the customer see it that way? Whilst we don’t have a clear time frame yet, it’s now more likely a case of ‘when rather than if’. Brokers must choose very soon how they proceed with motor legal expenses in order to be certain that their recommended cover works pre, post and during the transition to the new world.
Q
Do you feel that claims professionals are doing enough to detect and filter out exaggerated claims, and how can this be further improved?
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Fraudulent and exaggerated claims are a real problem for the insurance industry, and claims handlers must keep working to stay on top of this ever changing issue. That said, we see some excellent anti-fraud initiatives, such as third party cross referencing, low cost ‘gig economy’ inspection services, and even voice analytics. Thinking back to the distinction between ‘real time’ and historical claims, then I would say for claims which are reported immediately, the answer is generally yes. If you contrast that scenario with a speculative, ‘we think you had a motor accident two years ago’, what goes through the customer’s mind? It becomes a purely economic decision about whether to claim or not, and their mind-set is completely different. In this scenario, how can the claims manager weed out the fraud and exaggeration?
July 2017
Q A
Where do you identify areas for improvement in the relationships between brokers and their partners?
Brokers are necessarily and rightly very sales and distribution focused. But this can sometimes lead to a loss of focus on the entire customer journey; fulfilment through claims to renewal. Given that these important activities are often outsourced, in many cases to different providers, there is a risk that the customer journey can become fragmented. Motor claims providers have a responsibility to engage with their broker partners; to understand what the broker values and the experience they wish their customers to enjoy. Equally, brokers have a responsibility to engineer the business cycle from sale to renewal to fit their brand values. It’s this engagement in partnership where we feel we make the greatest contribution to a broker’s competitive advantage.
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As new technology develops and becomes more readily available, what new innovations will Coplus and the wider broker market be seeking to embrace?
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For the purposes of claims validation, dash cam information is incredibly valuable. It’s an area that’s really growing, both from insurer backed ‘dash cam policies’ and individuals installing for their own peace of mind. Dash cams are one of the fastest growing areas for electrical goods sales with over 3 million now in use. Telematics remains a significant area of technology in claims, although there is still potential to gather more verification data via this route. These technologies are only going to increase as vehicles become more autonomous.
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What steps led to the creation of Coplus’s Brokerplus platform, and how has it been received by the market to date?
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It was created in order to bring our extensive range of policies to the smaller independent broker who can’t access large schemes. The platform launched with a small range and has developed over the last couple of years with additional products and new features in response to our brokers’ needs. We now have about 500 products and nearly 400 different broker businesses using it. The design is simple, easy to use and helps brokers work compliantly. We respond quickly to regulatory changes, such as in the case of the Insurance Act, where eligibility statements were included well ahead of the deadline. This means brokers can be really confident that what they are using is completely up to date.
Q
How will the re-branding of Coplus, formerly Motorplus, support future growth and diversification into new markets in the future?
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Motorplus has been around for 30 years and is known for its motor claims handling. Whilst It remains the larger part of our business, our non-motor products and claims handling business is almost as big. The market understandably doesn’t know that. The idea was to re-brand in a way that was less motor specific yet still sounded like us and retained our brand “DNA”. It is instantly recognisable as being a part of us, and we believe that our non-motor customers will be more comfortable with that. Jason Tripp is Operations Director at Coplus.
Modern Claims 03
The Broker Focus
Case Study
Major technology project drives new efficiency in operations oplus is a provider of legal expenses and ancillary products, claims management and assistance services. Our product portfolio covers personal, commercial and landlord markets and we handle a variety of types of claims with differing requirements. Our customer base is also diverse; we work with over 400 brokers and insurers in the UK, ranging from large UK brand names who are competing on aggregator sites, through to small independent brokers who may have long standing personal relationships with clients.
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Our challenge
Our strategy in 2016 was to create operational excellence throughout our claims function. A critical factor to achieve this plan was replacing our existing claims management system, which had been in place for many years and was built to support the business as it was then. Like many legacy systems, it had been adapted over time, becoming complex as a result. Because of this complexity, information wasn’t always quick to access and our most experienced staff were often taking time to help colleagues make decisions. It was frustrating for staff as well as reducing productivity. The requirement was to replace the current system, but to ensure we didn’t lose the ability to customise the claims journey to fit different types of scheme or partner. It was important to retain control of the process rather than adapting to an ‘off the shelf’ solution. We needed to be able to manage many different types of claim, all in one place, with the flexibility to accommodate any future changes as the business diversified and grew. Our project team included some of our most experienced claims staff, their expertise being vital to the design and functionality. A shortlist of possible software providers was reviewed, with our final selection offering a great degree of flexibility and customisation as well as the ability to integrate with our other systems.
information, aiding decision making and transparent operations with our partners. Just a few examples of these achievements are: • Average calls times have reduced as operators have information readily to hand resulting in less hold time. • Standardised data now makes audits quicker, as well as making it easier for handlers to be consistent. Even small schemes where call volumes are low operate in the same way through the system. • Our Quality Assurance Team are able to feedback on more areas and make comparisons easily across different types of scheme. • The audit benefits extend to our broker and insurer partners when they audit, helping us to work even more transparently, which is a really important promise we make. • There has been a significant reduction in training times as the system is easier to use. This also means we can roll out new schemes more quickly. • Access to real time data allows our team leaders to better support their staff, giving better resourcing and prioritisation of activities. • Better data capture around contact preferences has improved efficiency.
Our learnings
As well as the results above, we’ve gained important learnings for the future. Key to our successful implementation has been our committed team and gaining complete buy in from the end users who have been part of the journey from the outset. A vision of the future is important, but being able to deliver incremental stages has enabled the benefits to quickly start to be realised, as well as gaining feedback. Finally, we’ve been willing to take a step back and challenge our assumptions to ultimately get the best result. Jason Tripp is Operations Director at Coplus.
A principle we call the “Customer Triangle” was key in creating flexibility and scalability in the system. This principle underpins the operation, using information about the incident and the type of policy and the scheme, in order to create an individual claim workflow. Rather than being rigid, the system allows our claims handlers to use their own experience in gathering information, which feels natural to the customer, rather than scripted. However, data validation rules ensure good quality data capture in order to have visibility and measurement through the claims process. With an agile approach we were able to go live for pilot schemes early and refine them over five months of live testing, giving staff the opportunity to feed back on their experience and ease of use, as well as refining the customer journey to streamline as much as possible.
The results
The new system has helped us to increase efficiency whilst delivering a high quality and consistent service. We have a platform that supports our business without the need for work arounds, and provides access to extensive management
04 Modern Claims
July 2017
The Broker Focus
Chris Dobson Chris Dobson, Ageas, lends insights onto how the insurer works with its broker partners, and what he predicts the next few years will have in store for the broker market.
Q A
What are the benefits of effective supply chain collaboration for the parties in that supply chain?
The relationships between insurer and supply chain partners have historically been based on the terms set out by the insurer. Our approach has improved customer experience; we have adapted, redefined our processes and refocused our efforts in customer satisfaction by partnering with like-minded suppliers, setting standards and resetting responsibilities. A decade ago, we underwent a transformation with our motor repair network, working with partners in a different way to recognise that no two claims or customers are the same. A key outcome of our market leading operating method, the Ageas Way, has been to drive down our ‘Key to Key’ (K2K) period, the time taken from when the customer hands over their keys to the repair centre until the time they are able to drive their car fully-repaired back home. At that time, only 20% of repairers in the Ageas network were able to meet a six-day K2K period or less, the acceptable time we felt met customers’ needs. This was compared with an industry average of between an eight to twelve-day K2K period. We worked in partnership with repairers to understand the flow of work and to develop a process that enabled the repairer to progress with minimum customer impact. Through this we were able to bring average K2K time below six days, a win-win situation for all involved.
In a time-poor, information-rich world, the expertise and support of a broker has never been more important
Q A
In ‘interesting times’ as we find ourselves in at the moment, brokers do so much to help the insurance industry project confidence in our products and services. Over the last few months we’ve been doing a great deal behind the scenes to help our broker partners support their customers. It’s how we prove we’re the ‘crew behind you’, which isn’t just a catchy title. For example, we’ve provided information sheets, templates and guides on a whole host of industry and customer issues to help both brokers and their customers navigate through them. We believe the success of relationships comes down to mutually beneficial, transparent relationships, and we show week in, week out how we listen to brokers so we can ensure we’re supporting them.
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How have developments in the insurance industry over the last few years affected the relationship between brokers and insurers, and the importance of this relationship? The chance of misunderstandings, misconceptions and unrealistic expectations is vastly reduced when customers use a specialist broker, along with the risk of underinsurance. Brokers’ relationships with customers do not end at point of sale. They go above and beyond to support customers, both in terms of practical help and guidance through the claims process, as well as moral support at the scene. We know many brokers were personally affected by the 2015/16 winter floods, but put their own situations aside to support local clients’ claims. One such broker we worked closely with is a prime example. Despite being hit by a severely flooded home with a young family, he worked tirelessly to settle a number of local clients’ claims. He even offered free advice to hundreds of local people through social media, receiving thousands of shares and likes, and attended talks to local businesses, earning a seat on a local ‘Flooded Businesses Group’ supporting the local community. In a time-poor, information-rich world, the expertise and support of a broker has never been more important.
05 Modern Claims
Where do you identify areas where the sector can improve on this relationship?
What technologies are Ageas implementing to improve its claims handling and the cohesion and workflow of its supply chain?
We are always prepared to take a different route if that means a better claims process for our customers. Following a successful first pilot of Tractable’s Artificial Intelligence solution at the end of 2016, we’re now set to be the first UK insurer to use AI technology across our motor claims management. This is the first time that an AI performing an expert visual appraisal has been used in motor claims handling in the UK and represents a significant opportunity for the claims sector. Tractable has developed technology – ‘AI Approval’ – which uses AI to process claims, which saves time, contains costs and has the potential to improve customer outcomes. It’s a strong example of experts and machines working alongside each other to ensure a consistently better customer service.
Q A
As more businesses and consumers embrace technology, how are cyber threats being tackled?
In an industry that’s all about protecting customers from risk, you won’t be surprised to know that we take this very seriously. The first requirement for any business
July 2017
The Broker Focus
Solutions, services and how we supply them need to keep up with and adapt to all the changes quicker than we can imagine is to recognise the true nature and extent of any risk, ensuring it is factored into how we operate daily and the decisions we take when adopting new ideas and ventures. Increasingly, smart technology underpins a lot of what we do, and the same is true in addressing cyber risk. We follow best practice for security, continually developing our capability, both in-house and through engaging expert partners in cyber security defence.
Q
How is Ageas preparing for a reduction in the Discount Rate, and what impact do you believe the outcome of the General Election will have on it?
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Ageas welcomes both the Civil Liability Bill and the Financial Advice and Claims Bill announced in the Queen’s Speech. They show the continued commitment to reducing the cost and frequency of whiplash claims, and to tackling the nuisance of Claims Management Companies. Crucially, the Civil Liability Bill also provides a legislative vehicle to deal with the disastrous decision to reduce the Discount Rate to minus 0.75%. The consultation process started before the election must now proceed quickly so that the right, robust solution is put in place, and we urge the Government to introduce the legislation as soon as possible. Until then, customers will be paying more than necessary to cover the costs of flawed compensation payouts.
industry bodies as necessary, communicating any resultant positions to its broker partners.
Q
What other challenges and opportunities do you predict for Ageas and its broker partners in the years ahead?
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When the ABI published insurance claims statistics with the aim of improving transparency and building customer trust, the findings achieved widespread media coverage. While some focused on the fact that 99% of motor insurance claims are paid, most outlets ran with headlines stating that 1 in 5 home insurance claims are rejected. Some journalists did then go on to explain why this was the case, but what’s interesting to consider is whether these policies were purchased without the expert advice of a broker. From my perspective, it’s clear that with over half of all insurance policies arranged through a broker (52%), the customer demand remains significant.
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In terms of capitalising on this continued opportunity, brokers can future proof their business by Horizon scanning. This involves looking at the world today, understanding which trends and patterns are emerging in our lives and industries, and then using that information to plan ahead for the future. Customers need efficient brokers and insurers that can respond and react to future uncertainties. Solutions, services and how we supply them need to keep up with and adapt to all the changes quicker than we can imagine.
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If we look at some trends and how they could translate into questions that brokers might hear from their customers in the very near future, it makes sense.
Is enough being done to promote a career in the broker or insurer market in order to attract young and prospective employees?
We are hugely supportive of all the work BIBA does with younger brokers, and we work closely with BIBA’s 2016 Young Broker of the Year winner, Oliver Rose from One Call Insurance. In addition, we have previously sponsored the Young Broker of the Year Award at the UK Broker Awards, which underpins our commitment to nurturing talent. Closer to home we have a very successful Graduate Scheme, which is hugely oversubscribed year-on-year, and has a dedicated HR lead who specifically supports the development and progression of younger Ageas employees through their career with us.
• Everything’s connected – “My heating, my car, my home and office CCTV are all connected and I can control them from my phone. If someone stole my phone, which insurer could help me regain control?” • Transport and logistics – “If a driverless car hits my garden wall, who will I make a claim against – the person in control, the manufacturer or my home insurer?”
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• The sharing economy – “I’m thinking about renting out a room in my house during the summer months. Where can I find a pay-as-you-go policy, and is it a landlord policy or can I just change my home insurance?”
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We want to support brokers through their Horizon scanning processes so they can be best prepared to meet the needs of your customers.
Do you predict Brexit will have an impact on Ageas and its broking partners, and how is Ageas preparing for any impact?
We do not believe that Brexit will have a significant impact on our activities, although we are part of an international group that has made the strategic choice to be active in both Europe and Asia and is keen for the European economy to be as strong as possible. The decision of the British people to leave the European Union must be respected, but we agree with the Chancellor of the Exchequer that they did not vote to be poorer, or less secure. We want to see agreements reached on the UK’s exit from the EU and our future trading relationship amicably and swiftly so that people and businesses, including brokers, can have certainty. It is likely some transitional arrangements will need to be put in place too so that needless disruption is avoided. Ageas will be contributing to any discussions on the future arrangements resulting from Brexit as an individual company and through
06 Modern Claims
Chris Dobson is Distribution and Development Director at Ageas. To find out more, check out Crew Behind You https://www.linkedin. com/company/ageas-broker.:
July 2017
The Broker Focus
Gary Barker Gary Barker, ERS, shares his thoughts on the future of motor insurance and the broker market, explaining what impact the reduction in the discount rate has had and why vehicle autonomy might not signal the end of car ownership.
Q A
What makes ERS different from a standard motor insurer, and how do client expectations of it differ?
ERS is a specialist motor insurer and are best at complex and non-standard insurance risks. We insure everything from classic cars and prestige vehicles, to agricultural vehicles and drivers with a chequered history. We work exclusively with brokers to provide a bespoke underwriting service for customers with needs that can’t be met by direct players or comparison sites. For these customers their vehicle is usually their livelihood or passion, and they value the services of a broker who understands their requirements. Furthermore, our capital strength as an A+ rated insurer offers our brokers and their customers extra security. Few other motor carriers can offer the security that comes with an A+ rating.
Q
How has ERS reacted to the reduction in the Discount Rate? What impact do you believe the outcome of the General Election will have on it?
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Like most insurers, we were surprised by the change in the discount rate. We were one of the first insurers to implement additional rate following the change and much of the market swiftly followed. We were able to apply different rate increases per line of business, ensuring the rate increase was applied to those classes that held the most risk, whereas other insurers applied a flat rate increase. Whilst the Queen’s Speech has confirmed that the Prison and Courts Bill is on the Government’s agenda for this parliament, it is still far too early to say how much benefit this will bring to insurers and customers. In 2013 a similar range of measures was introduced in the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which led many insurers to price for savings that were never realised, so we have to be cautious about how to price for this change.
Q A
What technological developments will affect ERS and the wider motor claims industry? Clearly driverless vehicles and insurtech are two big challenges that are going to affect the industry.
It’s hard to look at the media without seeing some reference to autonomous vehicles. Some analysts have predicted ‘Carmageddon’, meaning that in the very near future no-one will buy a car. At ERS we understand that a vehicle is very often a means of earning a living or it’s a source of passion for our customers. We are very confident that vehicle autonomy will not be the default option that the industry predicts. From a systems perspective, we have in the last three years invested in a complete IT transformation, ensuring that we have no legacy IT infrastructure to hold us back, this enables ERS to deliver a great service for our policy and claims propositions.
July 2017
In order for both broker and insurer to truly flourish, the relationship needs to be honest and move beyond a focus on the transactional
Q A
How does the relationship between brokers and insurers need to adapt to the current changes of the market?
Claims are the ultimate moment of truth in insurance, yet many brokers aren’t making the association between this and the use of rated vs unrated capacity when selecting a motor insurer. A reduction in motor capacity has meant some difficult discussions for us with brokers who are having to re-place business from unrated carriers, yet expect us to adhere to the same terms of their predecessor. In order for both broker and insurer to truly flourish, the relationship needs to be honest and move beyond a focus on the transactional. Brokers are at the forefront of the customer relationship. We are providing brokers with the tools and support to help them in their new business and renewal discussions. We hope that in doing so, we can encourage a more open relationship that goes beyond a transactional discussion and towards a partnership approach.
Q A
As ERS continues to develop, what challenges and opportunities do you expect from the future?
Claims inflation remains at an unsatisfactory level, and while we welcome initiatives to address this within the Civil Liabilities Bill as outlined in The Queen’s Speech, there are practices across the claims spectrum, which continue to expose our industry, and motorists, to fraudulent and exaggerated claims costs. We have put in place measures to mitigate this within our business. Within Accidental Damage we have created an inhouse engineering team of experts that assess damages and incoming repair estimates to mitigate the risk of increased costs coming from first party claims. However, the increased use of in-vehicle technology means that repair costs are increasing very quickly. In terms of opportunities we believe that brokers are now more relevant to consumers than ever. With the discount rate cut, IPT, claims inflation and reinsurance rises set to drive further incremental premium increases, brokers have a real opportunity to demonstrate their value through their knowledge of the insurance market in order to assist customers who may not previously have sought the services of a broker. Gary Barker is Head of Damage Claims at ERS.
Modern Claims 07
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