Modern Claims Magazine - Issue 26 by Charlton Grant

Featuring The Broker Focus

Linking the industry together

Issue 26 July 2017 ISSN 2051-6495

Anne Bozier

“In this arena we do need to look at Person first and Process second, otherwise we lose ourselves in ‘the machine’”

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MODERN CLAIMS

Editorial Contributors Andrew Gibbons ACII, Managing Director Mason Owen Financial Services Ltd Chair BIBA Claims Working Group Andrew Myhill UK Corporate and Public Affairs Manager Zurich

Marc Lafferty Chief Revenue Officer EDAM Group Natalie Larnder Policy Adviser, Civil Justice Association of British Insurers (ABI)

David Williams Technical Director AXA Insurance

Nigel Teasdale President Forum of Insurance Lawyers (FOIL) Partner DWF LLP

Donna Scully Managing Director Carpenters

Richard Beaven Distribution Director Swinton Insurance

Fiona Scurlock Management Committee member MASS (representing the South East) PI Solicitor Gray Hooper Holt LLP

Sarah Roberts Marketing Executive Eclipse Legal Systems

James Roberts Business Development Director Europcar UK Group Jason Tripp Operations Director Coplus Jody Tinson Head of Business Transformation Ageas

Scott Whyte Managing Director Watermans Stephen Ward Managing Director Clerksroom

elcome to the summer edition of Modern Claims! We’re barely halfway through the season and its already been a turbulent month for the sector. Years of uncertainty were set to come to a close following the General Election, only for the consequential Hung Parliament to delay the outcome by several weeks. Then finally, after another slight delay, the Queen’s Speech confirmed expectations that reforms to personal injury will take place.

At the time of writing, any revisions that will be made to the originally-proposed reforms have not been made clear, but if they do achieve their goal of removing exaggerated whiplash claims, the possibility of which being disputed by many in the industry, is it only a matter of time before something new rises up to take the place of whiplash? Recent research would suggest that this is indeed the case, and, appropriately for our summer issue, fraudulent holiday sickness claims are sharply on the rise. Sarah Hill, BLM, discusses what this means for the industry and for consumers in the News, and time will tell how the industry responds to this proliferating source of fraud. It is also a waiting game to see what the effects of Brexit will be for insurance, a topic discussed in this issue’s supplement, the Aftermarket Supplement, produced in conjunction with Euro Car Parts. This project looks at how high quality parts can be delivered to repairers to speed up the repair process for claimants and get them back on the road with a vehicle that’s no less safe than it was before the collision.

Zoe Holland Managing Director ZebraLC

Lesley Graves Managing Director Citadel Law Linsey Carroll In-House Lawyer Box Legal Limited

In this issue of Modern Claims, we got an in-depth look into the world of high net worth claims when we interviewed Anne Bozier, RSA. Anne discusses the importance of broker relationships in HNW, something echoed by Jason Tripp, Coplus, in this latest foldout, The Broker Focus. The focus covers the changing role of the broker and the claims handler in motor claims, and Jason also tells Modern Claims about his company’s rebrand and what this means for their own current and future relationships.

Issue 26 July 2017 ISSN 2051-6495 Editor Brendan Gurrie

Editorial Assistant Poppy Green

Project Manager Rachael Pearson

Events Sales Kate McKittrick

All material is copyrighted both written and illustrated. Reproduction in part or whole is strictly forbidden without the written permission of the publisher. All images and information is collated from extensive research and along with advertisements is published in good faith. Although the author and publisher have made every effort to ensure that the information in this publication was correct at press time, the author and publisher do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.

July 2017

WELCOME

I’m delighted to reveal that Modern Claims will also be undergoing a big change. From our next issue, our publication will be renamed to Modern Insurance Magazine. It’s an exciting move for the team and our writers, and one that will bring in brand new writers, fresh perspectives and topical content, all while still covering the latest developments in the insurance and claims sector. We look forward to welcoming you to the first edition of Modern Insurance Magazine in September, but until then have a great hot and sunny summer.

Brendan Gurrie, Editor, Modern Claims Magazine. @ModernBrendan brendan@charltongrant.co.uk 01765 600909

Modern Claims 03

MODERN CLAIMS

CONTENTS NEWS

INTERVIEWS

07 Sarah Hill

Injection of fraudulent claims leaves travel sector under the weather. Sarah Hill, BLM, reports on this new trend.

EdiTorial Board

12 Anne Bozier

While High Net Worth clients have different expectations of the service they receive, many of the same needs and challenges in the HNW insurance arena run parallel to those present in other kinds of insurance, and broker relationships are equally, if not more, important, as Anne Bozier, Oak Underwriting, explained when she spoke to Modern Claims.

17 The-Women’sInsurance-Net-work

Modern Claims partnered with The-Women’s-Insurance-Net-work (TWIN) to examine the current state of gender diversity and inclusion in the insurance sector. Attendees at a TWIN event responded to a questionnaire, and their answers revealed a number of key themes and similarities, providing insights into the position of women in insurance.

23 Zurich’s position ahead of the Election

Andrew Myhill, Zurich

23 The principles and practicals of reform Donna Scully, Carpenters

25 Seizing the opportunity

David Williams, AXA Insurance

25 Claims clarity and communication

Jason Tripp, Coplus

27 Forming a creative culture

Richard Beaven, Swinton Insurance

27 The impact of a hung parliament on the claims industry - where do we go from here? Scott Whyte, Watermans

29 The key to key-to-key

Jody Tinson, Ageas

29 Artificial Intelligence: A red herring?

Stephen Ward, Clerksroom

contributors

EUROPCAR NEW BRAND BLOCK Color gradient background File: 20151645E Date: 7/10/2015 AC/DC validation : Client validation :

04 Modern Claims

July 2017

MODERN CLAIMS Issue 26 July 2017 ISSN 2051-6495

EdiTorial Board

FEATURES

31 Clinical Negligence - To Fix or not to Fix?

Linsey Carroll, Box Legal Limited

31 Claims customer satisfaction

James Roberts, Europcar UK Group

33 Clinical negligence under FRC: Is it the yellow brick road to ruby slippers?

Zoe Holland, ZebraLC

33 The need for human interaction Sarah Roberts, Eclipse Legal Systems

35 Customer experience

Marc Lafferty, EDAM Group

35 Clarity over WIP value and financial forecasting

FEATURES

Lesley Graves, Citadel Law

37 To get customer feedback, you need ‘attitude’!

39 Fixed Costs, Budgets and the Bill of Costs

Gary Knight, Harmans, discusses the implications of Lord Justice Jackson’s Review of Civil Litigation Costs on how solicitors recover costs on behalf of their clients.

40 The Merry-Go-Round of Multiple Suppliers

John Dobson, SmartSearch, explains the differences between the data tiers available for conducting AML procedures, and the challenges multiple AML platforms can create.

42 Doctors Chambers Modern Claims Awards 2017

The third annual Doctors Chambers Modern Claims Awards took place on 27th April at the New Dock Hall, Leeds. Poppy Green reports on the highlights of the night and the prestigious winners.

46 Interview with Sam White

Sam White, Pukka Insure, spoke to Modern Claims about the growing profile of commercial vehicle insurance and what it takes to stand out in the insurance market.

48 The changing face of damage management

Claire Johnson, BDMA, discusses how the property claims sector has evolved over the last few years, and how it will continue to do so in the future to adapt to new challenges.

49 Why we need to be crystal clear on ADAS

Rupert Armitage delves into the problems circulating ADAS calibration systems and the issues this presents for insurers and repairers.

50 Sector Soapbox

Dr Hugh Koch, Hugh Koch Associates

Modern Claims’s panel of resident associations outlines the burning issues facing the claims sector.

53 Case Study: Eclipse

The Broker Focus 02 Interview with 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.

Eclipse implements its Proclaim Case Management Software solution at new start-up firm, McDermott Smith Law.

53 Case Study: Eldon Insurance Services ltd

Eldon Insurance Services ltd enjoying rapid growth.

04 Case Study - Coplus

05 Interview with Chris Dobson

10 MINUTES WITH

Major technology project drives new efficiency in operations.

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.

54 10 minutes with…

Michael Warren, Minster Law

07 Interview with Gary Barker

Gary Barker, Head of Damage Claims at ERS, discusses the relationship between brokers and insurers and how ERS are evolving to meet the current changes in the market.

July 2017

Modern Claims 05

carpenters

NEWS

Sarah Hill TALKS NEWS Injection of fraudulent claims leaves travel sector under the weather. Sarah Hill, BLM, reports on this new trend. he travel industry is facing a number of challenges, with the prospect of Brexit and a constant threat of terrorism giving senior executives plenty to worry about. Regardless of the uncertain macroclimate, however, consumer appetite for travel remains strong. Recent research from travel management company Travel Counsellors found that 94 per cent of consumers are as likely or more likely to book a holiday this year than last. However, if the industry focuses purely on macro trends, then lowlevel problems can begin to flourish. There is no better example of this than what we are seeing with fraudulent sickness claims. Travel insurers pay out significant sums on a daily basis. According to figures from the Association of British Insurers (ABI) released this year, insurers paid out £365m in 2015, equating to £1m a day, to 494,000 individuals and families who needed help abroad. But as with all other areas of society, fraudsters are never far away. Rogue claims management companies (CMCs) have identified this as fertile ground from which to anchor their next scheme. The premise is simple: put in a claim against your tour operator or hotel for sickness contracted while on an all-inclusive holiday. This type of activity used to make up a small proportion of claims, but the Association of British Travel Agents (ABTA) last month spoke of the ‘alarming’ rise in gastric illness compensation claims made through UK CMCs. While we’re yet to see industry-wide data released publicly, our work alone has seen claims triple in less than 12 months. The reason behind this rise is simple: CMCs are feeling the squeeze more than ever before. Following recent government crackdowns, whiplash claims are no longer as lucrative as they used to be, meaning that fraudsters and unscrupulous firms are increasingly taking the sideways step into travel sickness claims. As it turns out, these types of claims are perhaps even easier to defraud than those for whiplash, as there is not even the potential stumbling block of doctors’ evidence required.

Clearly, there is still a misconception that fraud is a victimless crime, even though the ABI estimates that fraud adds, on average, an extra £50 to the annual insurance bill for every UK policyholder

A victimless crime? To get a better understanding of this phenomenon, we commissioned YouGov to survey 2,000 consumers about their attitudes and experiences of this issue. One of our key findings was that 46 per cent of consumers believe it’s acceptable to make a claim for food poisoning, even if they weren’t certain the illness was the fault of the hotel. Clearly, there is still a misconception that fraud is a victimless crime, even though the ABI estimates that fraud adds, on average, an extra £50 to the annual insurance bill for every UK policyholder. This, in essence, shows that almost half of the British population is comfortable with making potentially fraudulent claims, highlighting

July 2017

Modern Claims 07

NEWS

If the industry focuses purely on macro trends, then low-level problems can begin to flourish. There is no better example of this than what we are seeing with fraudulent sickness claims the stark lack of education and consumer understanding when it comes to this issue. With 58 per cent of people surveyed saying that they have been on an all-inclusive holiday, this means that rogue claims companies have a huge pool of people to target that will be broadly happy to exaggerate or completely fabricate stories of sickness.

The worst is yet to come Perhaps the most worrying part is that we have not seen the worst of this yet. According to our survey, only 40 per cent of consumers know that they can make sickness claims against tour operators or hotels of all-inclusive package holidays. Surprisingly, these figures fall to 24 per cent for students and 26 per cent for the unemployed, two of the social groups that are more likely to be vulnerable to promises of a quick and easy payout. Given that this is already a major problem for the travel industry, with claims increasing rapidly and consistently, the idea that there is more growth on the horizon makes the need for a solution all the more urgent. The methods by which these companies attract business are similarly concerning. CMCs are increasingly looking to replicate the approach used for the mis-selling of payment protection insurance (PPI), suggesting that the government has a specific pot of money set aside for funding these claims and that claimants are entitled to this; a statement that simply is not true. While claimants are promised up to £5,000, we usually see payouts of between £500 and £2,000. Although this might seem small, the numbers are growing and the uncapped legal fees make it a lucrative market for claimant lawyers, adding significant costs on top. If we look deeper at the data it becomes clear that CMCs are targeting consumers that may be more vulnerable to fraudulent activity. While only five per cent have received an unsolicited phone call regarding a claim, this rises to eleven per cent of those currently unemployed, and seventeen per cent of those with three or more children. The targeting even spreads across borders, with five per cent of all-inclusive holiday goers actually having experience of being accosted while abroad regarding a claim. This again rises to fifteen per cent for those with two or more children. These rises indicate that there is some selection taking place. It’s likely the cold callers are both buying data in bulk and trawling social media for victims, but it seems many are targeting those with specific characters. The more targeted these rogue companies are, the more success they will have.

We can learn from reforms to whiplash claims in the UK. A cut in referral fees or allowing certain claims to be processed through the Claims Portal would be a positive first step. In addition, how many adverts play on the daily commute urging people to contact so-called ‘specialists’ about their holiday illness? This is undoubtedly a breeding ground for claims, and while the conversion will be small, the subconscious acceptance of this activity remains. A ban on marketing fees would go some way to stopping the spread of incorrect information, and reduce the risk of exposure to the general public. However, this isn’t enough. In order to effect meaningful change, it is essential that the industry comes together and pools its knowledge and resources to form a national educational campaign on the issue. Data sharing is difficult to encourage in any sector, and the travel industry is no different, but unless we can get a macro view of the issue, it’s impossible to present a coherent and complete analysis to the policy makers. Similarly, a firm custodial punishment and heavy fines would act as a strong deterrent to all but the most hardened of fraudsters. We are already working closely with the Ministry of Justice, the Solicitors Regulatory Authority and ABTA to develop a solution that works for all concerned, but more needs to be done. We need to make these claims harder to process within the legal system, and become increasingly vigilant when it comes to investigations. Evidence on social media has already become crucial to many of these cases, but fraudsters are becoming savvy to many of these methods, encouraging their clients to increase their privacy settings and even delete potentially incriminating photos and posts. Only a focus similar to that of the Insurance Fraud Taskforce will provide a proper deterrent to opportunists and rogue CMCs, and reduce the number of people presenting fraudulent claims. Sarah Hill is a partner and head of fraud at BLM.

Curbing the problem

There’s no doubting that this issue is real. What’s needed now are practical solutions that can help curb the growth and bring fraudulent and exaggerated claims back to a manageable level.

In order to effect meaningful change, it is essential that the industry comes together and pools its knowledge and resources to form a national educational campaign on the issue 08 Modern Claims

July 2017

For more details, contact Kirsten Roberts Call 0870 766 9997, Email kirsten@boxlegal.co.uk or visit www.boxlegal.co.uk

Supplied by Solicitors...for Solicitors

INTERVIEW

Anne Bozier While High Net Worth clients have different expectations of the service they receive, many of the same needs and challenges in the HNW insurance arena run parallel to those present in other kinds of insurance, and broker relationships are equally, if not more, important, as Anne Bozier, Oak Underwriting, explained when she spoke to Modern Claims.

What have been some of the key developments in high net worth (HNW) insurance since you’ve been working in the sector?

Very simply, the key developments in HNW insurance since I have been working for the Industry has been few, mainly consolidation. If we look at a selection of policies from different Insurers we see a variance on a theme as most have updated their covers to follow each other. Sums insured may differ, but essentially we are very much working on a level playing field so need to be able to demonstrate other benefits. The differences are mainly in Premium and capacity, so we need to look at different ways of capitalising in this market.

What are the current challenges in HNW insurance, and how do these differ from the challenges that exist in other types of insurance?

Current challenges within HNW insurance are always going to be around: ‘What do we offer and what do our competitors offer? Can we do anything different?‘ The policy covers from insurer to insurer may be very close to each other, so we have to look at what we can do to stand out from the crowd. In the HNW sector, choice of who to insure with does not always depend on cost, and therefore we have to find ways that we cannot only retain our clients but also gain recommendations from them. As we acknowledge, the claims function is the moment of truth, therefore it is imperative that we all get it right.

Q A

How do the expectations of HNW insurance clients differ to those of other policyholders?

Let’s look at hotels. When you check into the Ritz you are warmly welcomed, your bags are whisked away, and by the time you are shown to your room they are there ready for you to unpack, or indeed your clothing has been taken away, pressed and is ready to wear.

The claims function is the moment of truth, therefore it is imperative that we all get it right

In a lower rated hotel chain you queue to check in, are given your key and then are expected to carry your bag and find your own room. HNW expectations are those of the ‘Ritz’ expectations. Clients expect a much higher standard and a far more personal service of us. They do not expect to have to deal with the claim themselves in many cases, preferring their broker to deal with this on their behalf. They don’t want to see a process, just an end result.

12 Modern Claims

July 2017

INTERVIEW

In this arena we do need to look at Person first and Process second, otherwise we lose ourselves in ‘the machine’

Q A

How does the relationship between the broker and the insurer change when working with HNW insurance?

This is one area that cannot fall down. Brokers have put their own reputation on the line at the point of sale and this is where insurers need to ensure that they have understood this before handling any claims. Can we provide what is required? What do we need to action in order to ensure that the broker reputation and their own mission statement is followed through? It is vital that insurer claims teams look at their brokers in more depth and research their websites. What do they state that they will do? What are their strap lines? How do we provide exactly what their clients have bought into? At Oak Underwriting we held two forums before setting up the claims function in-house, where we looked at the individual straplines and asked brokers what they wanted from the service; the results were very varied. Some wanted to handle the claim on behalf of their client with no direct contact, some wanted to be kept updated and some just wanted to hand everything over and be advised when the claim was completed. The key theme throughout was to ensure that brokers were aware of what was happening with their client, albeit throughout the life of the claim or just at the closure. After all, it will always be them that their client comes back to and policy retention is key, along with a recommendation for a job well done, so it is in everyone’s interest to work collaboratively. It requires that extra effort; the concierge touch.

Q A

Where do you identify areas where the sector can improve on this relationship?

The claims function carries a huge percentage of how insurance is viewed. End clients trust that their broker has their best interests at heart, and in turn brokers trust that insurers and the claims function in particular will follow this through. We must make the time to listen to our brokers and tune into what they want. We need constant communication in order to improve. Keeping brokers aware at stages in a claim is a given; there may be a renewal date coming up and the broker will be wanting to ensure the correct information is to hand in order to provide a quotation, plus in the case of any issues we should always make the broker aware so they are ready for any queries from their clients. Insurers also face their challenges. They have processes to follow of course, but they also need to work outside of the box to ensure that they can exceed. Just the process, for example, a call at the end of a claim to enquire if everything is satisfactory that takes less than five minutes, shows care. A get well card when it has been mentioned that the policyholder is unwell; intrusive? No, just care for the client and proof that we have been listening. Likewise, we do need to know if there are any special considerations

July 2017

to be taken when dealing with end clients. We have to be very aware of the possibility of vulnerable people and if it is known at the time of the claim. It is helpful to be made aware, likewise we should inform brokers should we become aware.

Q A

Is the role of customer feedback more important in HNW, and are HNW providers doing enough to encourage it?

All feedback is important and even more so in this sector. We should look to have feedback not only from end clients, but also brokers. We carry out two forms of feedback: customer and broker. Our current NPS from end client feedback is currently +88 – we re-visit our claims promises every six months to see what we do well and what we can improve on. It is vital to the industry to keep the claims function ‘fresh’. With our brokers we look to have constant feedback through our Business Manager visits, where they are tasked to enter anything stated regarding claims. These visit reports are looked at when they come through and any actions are dealt with from there. We also ensure that our brokers have their own personal claims handler; this way solid relationships are formed and expectations are understood and met. I would expect nothing less within this part of the industry and would expect that all providers give this courtesy. We currently experience around fifty compliments per month and work to ensure that this figure does not reduce.

Q A

What is the best course for HNW professionals in terms of client care should a client’s HNW claim not be covered?

As a claims function our role is very much about being fair to our clients and looking for ways to cover claims when they are presented, however there are always going to be instances when they unfortunately will not be coming back to relationships with brokers. It is imperative that they are made aware of this fact, preferably at the same time or just prior to the client. We received a very important piece of advice from one of our brokers and have always practised this: don’t run from a problem, attack it. Be fair, be swift, and offer a comprehensive understandable explanation of why a specific claim is not covered. You cannot sugar coat this type of news. However, if you converse in a way that is fully understood and with empathy, you have done everything that you possibly can.

Q A

Is fraud a problem in HNW insurance, and what is done to combat any instances of fraud that do occur?

Fraud in HNW Insurance is no different to fraud in other Insurance in that it happens, and when it does we are looking at larger values. All insurers employ accurate and innovative ways of combatting fraud and are increasingly successful at this, however you cannot totally replace people and their claims experience when this is discovered.

Modern Claims 13

INTERVIEW

We also need to recognise that all clients are different; some have time and wish to speak, others just want the bare minimum interaction, and this is where HNW claims must differ from the norm None of us want to think that our clients are anything other than honest, however we have to accept that sadly this is not the case. Claims reporting online has, with technology, become a ‘must have’, with FNOL being one of the most important ‘pointers’ for fraud. This may lay insurers open to more fraud, however it is what consumers require so it is being utilised.

Q A

How has your outlook on the insurance market changed since you’ve started working with HNW claims?

I had already worked as a claims handler for HNW claims some years ago, however for another insurer via an outsourcing company. In those days, the process was the process, and although customer service was a priority, there was no understanding of what HNW was; to us it was just another policy with extra cover. When I joined Oak Underwriting there was (and still is) an emphasis on our brokers and end client, and in this arena we do need to look at Person first and Process second, otherwise we lose ourselves in ‘the machine’. We also need to recognise that all clients are different; some have time and wish to speak, others just want the bare minimum interaction, and this is where HNW claims must differ from the norm. I have ensured that each of the handlers at Oak go out on a site visit with Loss Adjusters at least once; true experience of what clients suffer as a result of a loss needs to be experienced to make better handlers. Clients look for immediate payment when claims are agreed and this should now be ‘the norm’, with monies deposited into their accounts by at least the end of that working day.

How do you predict HNW insurance will change in the future, particularly in regards to relationships with clients and with brokers?

We are dealing in an ever-changing wealth world now. The ‘Urban Rich’ with younger wealth are savvy and know the value of most items, art, jewellery, collections and property, whereas inherited wealth and those clients with inherited wealth have had items for many years and not thought to check values. Underinsurance is still a hurdle for insurers. It can be very upsetting for clients to be told that something is insured for over 50% less than it is worth, so the industry needs to be very proactive in policy inception and renewals in respect of valuations to ensure that we can accommodate their end clients in the event of a claim.

Anne Bozier At Oak, we are a leading high net worth insurer providing direct access to innovative solutions from our specialist team of underwriters. We realised there was a need from our brokers for a best in class claims service and set about providing an elite solution for our elite clients. Anne joined Oak in March 2014 to manage the launch of the new in-house claims department. Holding forums as part of the research process and analysing data to ensure when we launched in October 2015 we would not fail to deliver on our seven key promises that we had identified and we needed to implement and maintain for our brokers and clients. Anne has a wealth of knowledge and experience gained in various management and insurance roles throughout her eighteen-year career in the industry, her background being primarily in claims handling with additional Underwriting experience, which allows her to understand the intentions behind policy wordings. She is passionate about people, which shows in her high expectations of excellent customer service standards. Anne in her previous position won the Mid Essex Business Award for Excellent Customer Service of 2013 and was joint winner of RSA Global Technical Awards 2016 for her work on the Oak HNW Claims project.

We need to constantly evolve the claims function to accommodate all clients and understand what they want from us and how we can provide this. This may be by designing more client friendly front end technology, but essentially it will be down to the claims handlers on the front line. Recognise your broker; recognise your client and tailor make your approach to them. If you don’t, then there will be someone else who does.

14 Modern Claims

July 2017

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INTERVIEW

The-Women’sInsurance-Net-work Modern Claims partnered with The-Women’s-Insurance-Net-work (TWIN) to examine the current state of gender diversity and inclusion in the insurance sector. A sample of attendees at a TWIN event responded to a questionnaire, and their answers revealed a number of key themes and similarities, providing insights into the position of women in insurance. TWIN operates under the Chatham House Rule. Opinions are not attributed to any individual or company.

What is the current state of gender diversity in the insurance industry, and what have been some of the biggest changes in relation to this? “It’s starting to change, but clearly there’s still not enough balance at senior levels.” “The biggest change has been the increased publicity around this area, but it seems, in practice, this has not happened yet.” “There is still not that much diversity, especially at more senior roles.” “I’m new to insurance but have a financial services background; the issues are similar, but insurance appears to be lagging behind.” “From personal experience I see a lot of diversity.” “I believe there is more talk around this now than there has ever been, but there is still a lot of work to do.” “Some of the market committees I sit on have more women, and women, Inga Beale and Shine Khaury-Hac being two obvious ones, take more of the senior roles.” “There are definitely more women in middle to senior manager positions in the operations and claims world, but I don’t see evidence of much progress in areas such as underwriting.” “I have only been in the Insurance Industry for three years. It is very male dominated, but I feel women are certainly making progress to the top jobs.” “Females are often the minority sex within the company/industry.” “From my level (analyst) I feel there is gender diversity, both within my company and in friends. However, looking up the number of women does decrease, and I am aware of it being a male dominated culture.” “Good balance in junior roles but there is extremely limited progression of women from junior into senior level roles.” “There have been small movements towards more females in senior management positions, but there is still a very long way to go.”

Currently, what are some of the biggest barriers for entry and progression for women in the insurance industry?

“Few, if any, CVs are submitted by female candidates, which narrows the pool of future female leaders.” “I think having the board positions still being dominated by men means that the decision makers still seem to be promoting in their own image. There is also the problem that somewhere in the

July 2017

We can’t afford to ignore talent whatever shape it comes in pipeline, women are falling away. Perhaps this is a reflection of the lack of support for women who are starting families and need childcare or flexibility in working arrangements, as well as a more broad-minded approach to what makes them the right candidate for promotion.” “For entry, it’s preconceptions of the industry and the recruiters being the males in senior roles. And for progression, it’s good ‘get back to work’ schemes and flexibility.“ “Traditional recruitment tends towards recruiting someone in your own image, and with senior white males being the main influence, women have less of a chance.” “The long standing male network is a challenge; old fashioned attitudes to women still exist.” “An unconscious bias where senior people employ someone of similar expertise. Also, time out to have children where you are likely to come back to work in a different position.” “I didn’t experience any barriers in entering and I don’t see any barriers stopping my progression.” “’The best person for the job’ mentality means unconscious bias persists and does not recognise that some women may need some short-term support to become the ‘best person’”. “I came into insurance as a late career change. I have not seen any entry/way into insurance except at graduate level or back office staff.” “A lack of knowledge or interest in the sector, and career breaks affecting progression.”

What have been some of the biggest influences on the improvement of diversity in the insurance industry?

“Has there been an improvement?” “Seeing successful leaders like Inga Beale.” “Publicity and experiences from other sectors.” “The adoption of flexible working and job sharing by some companies. Wider awareness and availability of volunteering/

Modern Claims 17

INTERVIEW

We need to think about our image; is this the most attractive place to work when you need to wear a suit and work in an office? mentoring opportunities to interact with young people.” “Changing mindsets of big players.” “A small percentage increase in female senior leaders.” “Publicity of diversity issues at Lloyd’s and diversity events across the market. Unfortunately, the senior males that should attend, to drive change, do not.” “Probably the raising of the profile generally for the need for diversity, and Inga’s influence on things such as the Dive In festival have probably helped. No doubt the female networks are helping women to understand the problem they face and to recognise that they are not alone in facing them.” “Appointing a lady at the head of Lloyd’s has had a great impact on diversity and women in Lloyd’s.” What are the benefits that improving diversity and inclusion can bring to a company?

“Flexibility, knowledge, expertise.” “It will ensure the company reflects its customer base so that it can more effectively meet its clients’ needs. Companies will have a more comprehensive skill set and employees will be more fulfilled.” “New ideas, improved social cohesion, better use of resources.” “Broader perspective for brainstorming ideas and driving company performance.” “There are numerous reports which evidence the benefits of having a diverse workforce and board. These include profitability, being closer to the customer, better communication etc.” “A more rounded experience and different views and opinions.” “There is a multitude of benefits – different skills and approaches are key.” “Wider skill sets for dealing with modernisation and growth.” “Different styles of problem solving, different opinions and challenging views.” “New ideas, fresh perspectives, increased effectiveness.” “Diversity and inclusion should be able to pull the insurance market out of the dark ages and bring a new and vibrant outlook and a fresh view of insurance.” “Different backgrounds allow new thinking and new solutions that appeal to a full range of customers.” Do you believe the insurance industry is currently behind other financial services sectors in terms of gender diversity?

“The numbers speak for themselves when you compare the proportion of executive directors in the insurance industry against somewhere like banking. So yes we are behind.” “Yes.” “Not in my experience. I have friends in other financial sectors that have experienced sexism.” “From further conversations, opinions are yes, but personally, I wasn’t aware.” “It’s not behind, as other sectors aren’t balanced either.” “Definitely. Often male colleagues have gained assistance on the career ladder via someone they know/have known or worked with previously, instead of on merit.” “Yes; the statistics show that there is still male dominance in senior positions.” “Yes; compared to banking and consulting it is very behind.”

18 Modern Claims

How does gender diversity in international markets differ from the UK?

“The US is worse than the UK with no protected maternal leave, but the EU is ahead of UK (& Scandinavia) as they realise shortterm cost is a long-term gain.” “Family friendly hours allows inclusion; UK long office hours are not conducive.” “I believe they are more diverse in Europe.” “In the western world the UK is much further behind. For example, the US and South Africa have a far more balanced picture. Obviously if you travel east then the picture is not so good, with the Middle East probably being the most backward.” “Diversity is better than in other countries.”

Is the insurance industry doing enough to attract new and young talent, and where are there areas for improvement in this?

“Definitely not; we need to focus more on attracting new, diverse talent.” “We need to do more in this area. The London Insurance market is peculiar in that you tend to get into the industry because you know someone who can introduce you. We should be reaching out more to schools and universities to be telling the future generations what an exciting career they can have here, but we need to think about our image; is this the most attractive place to work when you need to wear a suit and work in an office?” “I am not aware of any recruitment initiatives aimed at improving progression of women into senior roles.” “Introducing the industry earlier and being flexible in work life/style.” “Exposure of what working in insurance is like.” “School awareness.” “A greater commitment to creating entry points at varying levels within the industry to attract non-insurance professionals.” “No, we should be tapping into schools and universities more to promote the industry, not just in areas close to London, but also regionally and internationally.” “Talent is being targeted where the industry has always got it from. It still needs to be from a wider pool of different sources.” “No I don’t. I feel this should be faced at school age.” “Local schools’ work experience; there’s something in insurance industry for everyone!”

Diversity and inclusion should be able to pull the insurance market out of the dark ages and bring a new and vibrant outlook and a fresh view of insurance

July 2017

INTERVIEW

I am not aware of any recruitment initiatives aimed at improving progression of women into senior roles

What are the attitudes towards diversity in your company, and how will this be developed?

“Very good.” “Mixed and disappointingly old fashioned.” “Very proactive and embraces diversity fully.” “There is a mixed attitude. There is no hostility towards women, but then there are still very few women in senior positions and very few younger managers coming through. I am supported in my diversity initiatives but we could do more to help change things.” “Very good. Previous, more traditional insurance companies have not been so good.” “Lloyd’s has recently had more female senior managers and this is increasing. However, diversity in other areas still needs to be progressed.” “We can’t afford to ignore talent whatever shape it comes in.” “I feel we are a very diverse company. A more challenging outlook will be more acceptable these days. An innovative future is ahead.” “I’d say that it has a diversity policy but does little to implement it. Change needs to be driven from lower levels.” “Gender representation awareness is reasonable but is not taken seriously. There are zero women in Executive or Board roles and less than 5 women in senior management.” “We are looking at entry level pipeline. We’ve partnered with Career Ready to offer internships and mentoring to 16-18 year olds from disadvantaged backgrounds.”

How do you predict diversity and inclusion in the insurance industry will continue to change in the future?

“More conversations leading to more progress!” “It can only improve. Change in culture in younger generations will hopefully filter up.” “I would hope diversity improves given the increased exposure, but I can see this will take time.” “Very slowly, but hopefully the industry will start to take proactive steps to make a difference to another younger woman’s potential career.” “Slowly, but hopefully progress will be made.” “I think it will be slow due to the top to bottom way of leading. However, due to the world of modernisation we will have to change fast.” “Slow movement until all the senior employees retire.” “The industry will start changing if the Chief Executives get it and innovate, otherwise it will be disrupted by a company/companies from the fintech industry.” “It must change, but change will be slow unless the ‘threat’ of women is seen as an opportunity. Those in control of most senior decisions are almost all white men who are fifty plus years old and the demographic group ‘at risk’. “Erratically; where there is scarcity of a particular skill set, diversity will happen.” “It will have to change to remain competitive.” “It has to change or we will not survive. London is losing its market share and in some places losing business in absolute terms. To be closer to our customers and understand what they need, we need a diverse population of employees who can influence our business and which reflects our customers. In order to be as successful as possible we need to be getting the candidates from a much wider pool, so that it is not just the best white male that we recruit but the best person.”

July 2017

Women’s-Insurance-Net-Work (TWIN) The-Women’s-Insurance-Net-Work (TWIN) was set up in 2007 to meet the needs of both senior women and up-and-coming female talent from the life and non-life insurance industry. Regular meetings are held to enable women to meet and discuss industry issues and exchange new ideas with their peers in a noncompetitive, relaxed and informal environment in order to best understand how to cope with issues they face not only as women, but as senior figures and future leaders within the industry. TWIN is the only insurance-focused professional forum for women aimed at providing professional and personal development through intellectually stimulating debate in a conducive environment. Our aim is to create a group of high quality thinkers who can discuss both the issues facing our industry and the needs and development of women in the insurance sector in an open, collegiate and stimulating way. Our programmes allow ample time for debate – a key feature of the proceedings, something larger conferences, where very big audiences are essentially being lectured to, or at, cannot hope to achieve. Membership is aimed at women in: • Insurance companies • Reinsurance companies • Brokers • Professional services firms • Actuarial consultancies • Other insurance related businesses Members include actuaries, accountants, lawyers, underwriters, claims specialists, compliance and HR professionals. Corporate and individual memberships are available.

Modern Claims 19

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EDITORIAL BOARD

Zurich’s position ahead of the Election

The principles and practicals of reform

t the time of writing, the General Election is imminent, but we haven’t forgotten about the number of important insurance policy initiatives that were delayed in the run up. Whoever ends up occupying Number 10 should know that these issues have not disappeared and there must be renewed impetus to ensure these initiatives are implemented.

Where should the post-election parliament place emphasis on improving the claims sector?

Before calling the snap election, the Prime Minister spoke about her desire to do more to help those feeling the financial pinch, those ‘just about managing’ or ‘JAMS’. The rising cost of insurance is one such factor that is placing strain on household incomes in the UK. While some factors can’t be controlled, others certainly can; the changes in the Personal Injury Discount Rate and the reform of the civil justice regime are two areas where it is vital that there is swift government action following the election. In Zurich’s 7 point Manifesto plan we touched on the need for a fairer framework to be used for setting the Discount Rate, which is having a significant negative impact on insurance costs for customers at a time when they can least afford it. We are already seeing eye-watering increases in settlements across the sector, particularly in the public sector and in the NHS, and this is simply not sustainable. The Government has consulted several times on a new framework, most recently just before Easter. The industry has responded in kind and we continue to work collaboratively with HM Treasury and the Ministry of Justice. We hope and expect the Government to follow this through post-election as quickly as possible and uphold its end of the deal. Nothing less than a framework that is fair for both claimants and insurers will be acceptable. Zurich and others in the industry have also been leading the way in reducing fraudulent whiplash claims to protect honest customers who end up carrying the financial burden through increased motor insurance premiums. For years the Government have told insurers that if the industry did its bit and worked collaboratively, we could expect genuine reform that would significantly tackle this ever growing issue. Well, the industry has done its bit and now it is time for the Government to deliver. The proposed reforms in the nowdefunct Prisons and Courts Bill were a welcome step, and it is vital that the next Government reintroduce the measures in legislation early in the next Parliament. Andrew Myhill, UK Corporate and Public Affairs Manager, Zurich.

efore we get to Parliament, the first thing the Ministry of Justice should do is to take a deep breath and resist the temptation to launch full speed off the cliff. If the Conservatives are returned to power and an amended Prisons and Courts Bill is flagged for a return in the Queen’s Speech, it is only weeks before the summer recess. There appears little point in hastily re-introducing a flawed Bill whilst MPs are only thinking about the dynamics of the new Parliament and their post-election summer break. Legislative scrutiny of Bills won’t really begin now until October anyway.

The next three or so months can then be fruitfully spent with MoJ having a genuine and frank dialogue with stakeholders from across the sector on the desired shape of the reforms. Defendant solicitors have now publicly started questioning the logic and direction of the proposed reforms. Increasingly, some insurers are becoming genuinely concerned about where this is all leading, but are understandably reluctant to speak publicly, because it might risk derailing the genuine case for reform. Putting aside the principled arguments against the reforms for one moment, on a practical level there are simply too many unanswered questions right now about how it will all work in practice. There are too many loopholes, and insufficient time has been spent on thinking through the consequences. Neither insurers nor solicitors wish to see the market surrendered to claims farmers actively encouraging and guiding LiPs. Most insurers really don’t want solicitors squeezed out of the market, recognising that they, for the most part, provide a professional service in filtering out the worst claims and efficiently dealing with the mostly genuine. Will the process really have been worth it when we likely end up with increased costs for insurers, more fraudulent claims and a dramatically less efficient market? There is a growing appetite to collectively work through these issues. Legislation can then return to Parliament that is more comprehensive and fit-for-purpose. It can address some of the critical issues that are currently an afterthought: rehab, credit hire, repair, medical reporting, SRA powers and improved data sharing. The new Bill can then be better aligned with the transfer of regulatory powers over CMCs to the FCA and the proposed ban on cold calling. Parliament could then be responsible for a piece of legislation that might actually improve the claims market, rather than breaking it. Donna Scully, Managing Director, Carpenters.

July 2017

Modern Claims 23

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EDITORIAL BOARD

Seizing the opportunity

Claims clarity and communication

Which issues or areas of insurance are there now opportunities to address following the shelving of the whiplash reforms?

How can the claims process be optimised for customers to provide them with the best possible claims experience?

ortunately the claimant celebrations about whiplash reforms having been dropped have ended. Yes, the General Election will delay things a little, but with personal injury reform getting a clear mention in the Conservative Manifesto, it really only is a matter of time.

t’s important to acknowledge that any discussion around the best possible claims experience can’t take place without first considering the principles of Treating Customers Fairly and, in particular, Outcome 5, which states “Customers are provided with products that perform as firms have led them to expect…”. This is particularly relevant at the point of making a claim, as this is when the customer finds out if the product does indeed perform as they expect.

I am assured that those policies which feature in the manifesto do get through; the Lords may prevaricate a little, but the theory is that the manifesto is that which the Government is elected on, so they won’t die in a ditch over things the public seemingly want to take place. So, rather than insurers replicating that brief claimant party attitude, popping corks and saying ‘We’ve Won’, I suggest we seize the opportunity to do something much more positive, and take the time given to both help refine what does come into force, and collaborate to ensure that those things we are all joined in do get to the head of the queue. Everyone seems in agreement that cold calling is an abomination and needs tighter controls. The way of doing this has already been agreed upon, but let’s make sure that governance is transferred to the FCA at the same time as other reforms. We need directors to be personally punished, not just set up down the road in a slightly different name. Uncertain definitions are no good for anyone, and certainly not for the man in the street, who is faced with having to do more of the work themselves and have a tariff to understand. Let’s make things really clear, particularly the whole “what is whiplash, neck, upper back, lower back” elements; a simple tariff system loses its appeal if no one knows where the boundaries are, or worse still, less savoury elements start playing the system. Claimant lawyers seem to like the idea of the emergence of ‘proper’ legal expenses insurance; could this fill a gap to fund fees, whilst also giving insurers something extra to sell? Despite the sometimes pantomime rhetoric, I genuinely do think there is much more we can work together on, particularly if we remember that we are all really meant to be in business to serve our customers, not our own profits. David Williams, Technical Director, AXA Insurance.

Delivery must be supported by strong links between policy design, the sales process and ultimate claims fulfilment. These connections between underwriter, broker and claims handler are key if the customer is to be provided with a first class claims experience, and yet, in many cases, products are offered via a complex chain, sometimes with little connection between these separate elements and creating multiple opportunities for points of failure in the customer journey. A broker that does not fully understand the product they are selling is unlikely to have happy customers, as indeed is the underwriter that outsources claims handling with inappropriate controls. Customers increasingly look at service providers to exceed their expectations, rather than simply deliver as promised. In order to optimise the process, there are two factors that should be considered. Firstly, how communication and information exchange can be delivered at the customer’s convenience, whilst removing any possible ambiguities. Secondly, assessing automation of certain actions to streamline routine activities and reduce the time taken to settle a claim. Consumers have high expectations of technology. Whilst it’s understandable that many customers choose to make a call to report a claim, today’s expectations are that multi-channel, multi-device options should also be available. However, the claims industry hasn’t kept pace with this demand and claims apps or portals remain under-utilised. Customers are already familiar with these technologies, so why shouldn’t tasks like uploading pictures or adding comments to a claim become as simple as updating a Facebook status? Improved service design techniques can create simple online experiences that remove unnecessary steps and are easy to use. Artificial Intelligence is becoming mainstream and is enabling faster decisions. From pictures at the scene of a motor accident, AI can be used to assess vehicle damage, appraise the options for repair, and quickly provide an estimate. In summary, an optimised claims journey requires clarity and understanding between all parties, as well as adopting new methods of communication and information exchange. Jason Tripp, Operations Director, Coplus.

July 2017

Modern Claims 25

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EDITORIAL BOARD

Forming a creative culture What is the status of diversity and inclusion in the claims sector in 2017, and where are there areas for improvement in this?

t’s fair to say that there are significant issues around equality that still need to be addressed in many sectors, particularly insurance.

The statistics for the industry are sobering. One per cent of graduates want to work in insurance, but that drops by a factor of ten if you are LGBT. More worryingly, there’s evidence to suggest that some graduates feel they have to go back into the closet when they apply for jobs in our sector. That’s concerning to me, especially given the pressing need for different perspectives and new ways across insurance. Role models are a key to breaking down the last-remaining barriers. The impact and influence that those who’ve made it to the top can have in changing perceptions and raising awareness is immense. This has been proved to me time and again through my experience of helping to set up the Link network of LGBT insurance professionals and allies. The network’s 500 members are showing the value that a public profile can have in changing perceptions. Certainly, there’s more that can be done by those in the industry to speak out and highlight where stubbornness is slowing down progress. Embracing diversity is fundamental to development and the greater the variety included the fresher and more dynamic businesses can be, especially in insurance, where customers have dramatically shifted the way they interact with us in recent years; the industry is crying out for new talent. But it will be difficult to embrace the future if organisations appear to be exclusive and unwelcoming. In the past, the most creative environments I’ve been in are the ones that included the greatest variety of people. Diversity isn’t just making sure you fulfil a quota, it’s about giving your business exposure to as many different ways of thinking as possible to produce genuinely interesting new ideas. Ultimately, it won’t matter how many people are in the room if they all think the same way. The insurance sector is changing faster than at any other time in my career. A more varied and open-minded culture is something to strive for, not just for moral and ethical reasons, but because it will produce the creative solutions needed to meet the challenges we face.

The impact of a hung parliament on the claims industry Where do we go from here? he general election result saw the UK electorate return a hung Parliament for the second time in seven years. As a result, deal-making and compromise are now the words of today, replacing the “strong and stable” mantra that preceded the election. At the time of writing, no formal coalition has been formed, but one thing for sure in the coming parliamentary term is that there are sure to be many battles to be fought between the two largest parties following Labour’s resurgence.

What impact the election result will have for the claims sector is yet to be seen, but with the Tories now requiring the support of at least one other party, it does appear that their ability to implement their manifesto in full is likely to be curtailed in certain areas. One area could of course be the proposal to all but eliminate the rights of injured people to recover compensation following an accident by both removing the right to expenses and significantly reducing the level of damages through the tariff scheme. The whiplash reforms were of course dropped with the calling of the general election but made their way back into the Tory manifesto. Now, without a majority (and indeed without the large majority that was expected at the time of declaring the election) the ability to railroad through legislation, however badly reasoned or researched, is no longer a luxury that the government will be able to enjoy. As a result, any proposed legislation on whiplash reform or any other matter will require the support of at least two parties in order to succeed and that, hopefully, will allow a greater deal of both sense checking and fact-checking before new laws can successfully be passed by the government. The insurance industry will no doubt be ruing the fact that their friends in government have taken a bloody nose at the polls. Perhaps, unlike their political friends, they might actually start listening to the public. Instead of pushing an agenda of removing rights in order to maximise profits, they may take the example of a hung parliament to look at genuine collaboration within the industry to achieve a claims process that works; where fraud is rightly targeted and tackled, but without disseminating the rights of the population as a whole. We can, at least, live in hope. Scott Whyte, Managing Director, Watermans.

Richard Beaven, Distribution Director, Swinton Insurance.

July 2017

Modern Claims 27

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EDITORIAL BOARD

The key to key-to-key How can the claims process be optimised for customers to provide them with the best possible claims experience? e’re in the business of making life easier for our customers when things go wrong. For car insurance customers, that’s getting their wheels back on the road so they can continue with their daily lives. If you think about it, insurance is a life enabler – it enables millions of people to live their lives and do the things they want to do.

It’s important to be prepared to take a different route if that means a better claims process for customers. A decade ago, we underwent a transformation with our motor repair network, working with them 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 with the repairers to understand the flow of work within the repairer, and to come up with a process that enabled the repairer to get on with the repairs and ensure minimum impact on the customer. Through this work we were able to bring average K2K time below six days. Fast-forward ten years and our desire to continually seek new and different ways to achieve a great claims service for our customers has not faltered. Following a successful first pilot of Tractable’s AI solution at the end of 2016, we’re now set to be the first UK insurer to use Artificial Intelligence (AI) technology across our motor claims management. This is the first time that an Artificial Intelligence 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. We’re now moving forward with Tractable and putting the technology live to help our engineers verify the performance of our UK-wide repair networks in managing customers’ motor claims to make their lives easier – exactly what we’re in the business of.

Artificial Intelligence: A red herring? aving recently launched the first robot barristers’ clerk, Billy Bot, we were pleasantly surprised (and amused) at the response from consumers, peers and the media. Billy is a junior clerk programmed to support clients through their legal services journey. He’s a robot with a defined personality and skill set. Some assumed Billy is an Artificial Intelligence (AI) gimmick, offering advice when he shouldn’t (how dare he take a human job!). He’s not, and I thought it might be useful to explain how you could miss out if you believe all you read.

Google describes AI as the ‘theory and development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decisionmaking and translation between languages’. Systems that learn can utilise ‘executive’ processes. Billy doesn’t, he has a limit (thankfully). If we wanted to do AI, we’d have created a barrister (only joking). We’re not creating a ‘cheap’ army of lawyers. Billy was created as a clerk because we identified an opportunity to streamline client care processes, offer clients an instant, more relevant communication tool and ensure staff use skills in the right places. With our increasing client base, it felt right to have an online tool to support ‘basic’ functions. We won’t bore you with details of a clerking role (ask Billy!) but essentially he’s a guide, doing what all junior clerks do, which is to book cases. He has a personality, and an ability to identify key words and phrases, even swear words (he doesn’t like them). Like any clerk, he takes annual leave and defers complex matters to senior colleagues. Billy is linked to our diaries and barrister preferences amongst other data. He isn’t our only customer care interface but he is a significant tool, ensuring hundreds of weekly bookings are successfully managed. Once we have his chat mastered, we plan to create audio files that will help us to market Clerksroom by responding to search questions made via voice searches on Amazon Echo, Google Home etc. Why isn’t Billy Bot ‘AI’? He’s a robot and does what we program him to do. He doesn’t (sadly) have code to think for himself to an AI degree, but he is streamlining our processes and offering our consumers more choice. What is termed as ‘AI’ probably isn’t. Question what you read as you could be missing out on a business opportunity. Stephen Ward, Managing Director, Clerksroom. If you’d like to put Billy to task, please visit billybot.co.uk

Jody Tinson, Head of Business Transformation, Ageas.

July 2017

Modern Claims 29

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EDITORIAL BOARD

Clinical Negligence To Fix or not to Fix? ollowing a consultation in 2015, Health Secretary Jeremy Hunt has now revealed plans for a fixed costs regime for Clinical Negligence cases. The Department of Health has confirmed that the mandatory scheme would apply to all claims worth £25,000, in an effort to save the NHS millions a year.

A consultation is now open, which will last for 12 weeks and will look to address not just the issue of fixed costs in Clinical Negligence claims, but also the Civil Procedure Rules and the use of experts. The paper states that the ‘proposed reforms to reduce the cost of claims are part of a broad package to improve patient care by encouraging learning across all healthcare organisations. Where litigation is needed, the process will be streamlined so that the injured person and their family reach a resolution more quickly, confident that change will occur, and that harm will not happen to others. Finally, it is right that the Government should endeavour to reduce the cost of litigation so that more resources are available for NHS patient care’. The consultation advances a number of options for the level of fees, including proposals that set costs for claims at pre-issue at £3,000, rising to £7,150 for claims that are post-listing. Trial fees are in addition to the figures, with a discount for early admission on liability. As with any argument there are two schools of thought on the current proposals. The government of course says costs for clinical negligence cases are excessive and can far exceed the value of the claims themselves. Claimant lawyers say claims with real merit will be difficult to run under a fixed costs scheme, and that uncooperative and difficult defendants mean that costs increase beyond what is necessary. It’s also suggested that large Claimant costs are usually as a result of the Defendant not investigating the claim thoroughly at first instance, and forcing the Claimant to fight their legitimate claim. Another group with concerns about these proposals is the Action against Medical Accidents (AvMA), with their chief executive Peter Walsh saying proposals to restrict costs would ‘seriously harm access to justice and patient safety’. ‘We are deeply disappointed that, against our advice, the department has pressed ahead with these proposals without even waiting to learn about the impact of earlier reforms which are reducing costs; what the NAO has to say about the role of the NHSLA; or what Lord Justice Jackson’s review has to say about fixed costs,’ he said. What is clear is that if the proposals are not carefully considered and debated, there is a risk that wronged Claimants could again bear the brunt of the government’s attempted costs saving measures. The Consultation closed on 1st May 2017, and parties affected by the proposals are urged to have their say.

Claims customer satisfaction How have attitudes to customer feedback developed in the 21st century, and is enough emphasis currently placed on its importance in the claims sector? he customer is king – or queen. No question. And the power of social media has made the influence of the customer on a brand’s long-term success so much stronger. How a company responds to customer feedback, however it is provided, is therefore fundamental. I believe the insurance sector has been particularly good at understanding that dynamic in recent years.

The Customer Satisfaction Index (UKCSI) published by the Institute of Customer Service earlier this year revealed that the insurance sector in the UK achieved a 0.7 points rise in overall customer satisfaction, increasing to 79.4 out of 100, which is above the UK average. Customer experiences associated with home insurance and motor insurance scored higher than the sector average. However, whilst this is good news for the sector, the ICS report also revealed that there was a sizeable drop in the Net Promoter Score for insurance companies. This suggests that it is becoming harder for insurance brands to earn customer advocacy. Which brings us back to how customers are responded to when things don’t go to plan. According to the ICS report, 62% of insurance customers said that they had to put more effort into dealing with organisations than they did in the previous year. The ICS therefore suggested that insurers need to think about how they respond to customers across all channels – from the call centre to email, text and apps – with a need to work harder on consistency as well as demonstrating greater empathy to the customer issue. Of course, in the world of claims, customer empathy is paramount – balanced against a sensible approach to risk management. And the replacement vehicle experience is absolutely integral to the process, needing to be efficient and hassle-free for the policyholder. At Europcar we are working with a number of insurers to provide a replacement vehicle service that not only streamlines the process and provides transparency on costs but gives policyholders and not at fault motorists alike choice and control. As well as tapping into our network of more than 200 locations across the UK, and the choice that comes from a peak fleet of 60,000 cars and vans, our Deliver & Collect service means that the driver doesn’t even have to worry about getting to the nearest rental branch to collect and return their vehicle. This is enabling insurers to eliminate some of the friction that often adds cost to the claims process, instead achieving a positive claims experience for everyone involved. And that has to be good news for overall customer satisfaction. James Roberts, Business Development Director, Europcar UK Group.

Linsey Carroll, In-House Lawyer, Box Legal Limited.

July 2017

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EDITORIAL BOARD

Clinical negligence under FRC: Is it the yellow brick road to ruby slippers? ithin the context of the tornado of legal reform, the impact of the proposed Fixed Recoverable Costs (FRC) within clinical negligence (CN) has the potential to be both dramatic and sobering. We have firmly landed in Oz. Further, recurring proportionality issues are already causing CN firms to wince. The journey on the yellow brick road is a fraught one. Do firms have the courage, knowledge and skill to take CN forward?

The wider personal injury (PI) sector changes have seen a swathe of firms looking to CN as a replacement. Some of these perhaps do not fully understand the commercial realities of managing a CN department. There are firms that lack the required knowledge to risk assess cases properly, and moreover, less experienced firms treat CN as an extended version of PI. A pre-medical letter of claim in complex cases is often the first giveaway of an inexperienced firm. Zebra’s instructions have seen a tangible increase in established firms looking for additional funding and/or looking at remodelling, and also those newer entrant firms requiring guidance on why the cash flow isn’t coming after a three year period post LASPO. In a Zebra market survey this month, out of twenty established personal injury firms with turnover in excess of £5m, nine of these have either considered setting up CN departments or have already done so.

Bank funding and investing in CN

Banks are looking more closely at firms’ WIP profiles, and the management team’s to approach financial management of CN. Firms must have a grasp on their WIP risk profile to achieve appropriate funding. Banks are also aware of proportionality issues. This is something that we are now asked to look at as part of our bank funding projects. Banks want a granular view of what is within the firm’s filing cabinets, and this is set to stay.

Will you find your ruby slippers?

Whichever way a firm comes at it, either an established CN firm or a new entrant, the road ahead is potentially a difficult one. It won’t simply be a skip, hop and dance along a dazzling yellow brick road, and not all of those that engage in the sector will find their ruby slippers at the end. It’s not just a case of ‘follow the yellow brick road’. Firms will need to be prepared to adapt and evolve to the rocky terrain ahead. Naivety will be costly. Zoe Holland, Managing Director, ZebraLC.

The need for human interaction How can the claims process be optimised for customers to provide them with the best possible claims experience? n recent times, it has become increasingly difficult for insurers and claims companies to streamline operational efficiencies while simultaneously improving customer experience, and the stakes today are noticeably higher than they were a decade ago.

As the market is becoming ever more saturated, it’s no longer enough for companies to just say they’re different. Instead, they need to develop personal and meaningful customer relationships, not only to resolve some of the most frustrating aspects of making claims, but to increase customer engagement, and therefore to gain trust and loyalty. Digitisation is often the first port of call when it comes to improving processes, however the insurance sector has been somewhat slower to embrace new technologies, and that’s in part down to the restrictions of legacy systems. Although replacing and upgrading said systems are often seen as an unnecessary expense, a strong case management solution will certainly earn a significant ROI through automation alone! And by automating low-value work and generally managing the claims process end-to-end, it allows insurers to focus on solving problems and building relationships, whilst customers benefit from contained costs and increased productivity. Technological advancements also mean it’s possible to gain ‘insider’ knowledge on customers and their lifestyles, allowing for a deeper analysis of data and insights, which can ultimately be turned into action. The key to optimising the claims process is to use the data captured, and turn this into improved products and services that are tailored to customers. Nevertheless, implementing effective support technology is an important step in the right direction of optimising claims, but it’s only one component. Perhaps most importantly is the ‘people’ element, which can be easily forgotten in this era of innovation where companies are striving to implement top-of-the-range technology to provide customers with top-of-the-range services. Although stating the obvious, submitting a claim is generally a stressful time for customers, and providing a consistent service delivery across multiple channels, including the more traditional methods, goes a long way to relieve this stress and ultimately create a loyal customer. Essentially, whilst technology and new digital capabilities will continue to play a pivotal role within the claims industry, enabling smarter decision making, reduced premiums and increased loyalty, it can’t, and shouldn’t, diminish the need for human interaction. Sarah Roberts, Marketing Executive, Eclipse Legal Systems.

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Modern Claims 33

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SuStainability : Forging the in clAims Future oF claim : A crossroAd S 2018 & Beyond The LegaL Co ns um er : Br nd ea king Down Th 2018 & Beyo e Barriers SuStainability 17 Supplement 20 Supplement 20 16

The Legal Cons umer Supplement 20 17

Modern Claims Magazine

SUPPLEMENTS

Modern Claims Magazine covers the breadth of the industry, but as you will have seen we also take an in-depth look at particular areas of the sector through our special 32 page supplements. These supplement magazines focus on hot topics, future innovations and key developments that are affecting your business and your clients. We strive to incorporate a balanced view in our publications, and we welcome perspectives from the claimant and the defendant side of the industry.

If you want to get involved in a supplement, please contact Rachael Pearson at rachael.pearson@charltongrant.co.uk or call 01765 600909

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EDITORIAL BOARD

Customer experience How can the claims process be optimised for customers to provide them with the best possible claims experience? or us, it is all about what we can do at every level to make the customer experience as positive as possible. The success of our business is dependent on us delivering exceptional customer service; providing an exemplary experience is a key way in which we can stand out in a competitive sector.

Adopting the approaches suggested below has enabled us to achieve a sector-leading Net Promoter Score (NPS), which we are always seeking to improve. Creating a detailed understanding of the metric across the business is proving to be a catalyst for change, and prompts us to develop every stage of the customer experience.

Seek improvements at every level

By taking a step back and re-engineering our processes from the viewpoint of the customer, we have made numerous changes across the business to deliver incremental gains. Together, these changes contribute to significant improvements, and we have instilled an ethos of shared responsibility across the team, so opportunities can be identified and implemented regularly.

Use customer feedback effectively

Another key part of optimising the claims experience is through actively seeking feedback at multiple stages of the process. Instead of simply requesting feedback upon the closure of a claim, we gather information at key touchpoints throughout the entire process. Using root cause analysis leads to action plans being formed that optimise the process throughout and improve the customer experience.

Train your people

In this industry we can’t avoid having to deliver a difficult message on occasion, so we have introduced new training programmes for our team to manage customer expectations effectively. As a result, if we have to give difficult news regarding an individual’s claim, we can communicate with them more effectively and manage that situation. Our staff always adopt an empathetic approach when dealing with our customers, and our core values – notably ‘respect’ and ‘integrity’ – are reflected in everything we do.

Use the expertise of all team members

Even though it is easy for management to dictate strategic changes from the top down, for all team members to accept and implement, we see value in accepting input from all team members with a holistic approach. That allows the team on the front line to make suggestions based on dealing with customers directly. Our refreshed approach, which included creating the role of customer experience manager, is working. Evidence of that is our Net Promoter Score, which has increased to 76, having previously been around the 50s last year. That improvement is testament to the efforts of the team. Our people are what makes us, and all play a key part in not only delivering an excellent customer experience, but helping to refine the process too. Marc Lafferty, Chief Revenue Officer, EDAM Group.

Clarity over WIP value and financial forecasting A

key challenge facing claimant personal injury (PI) law firms is the ability to achieve clarity over WIP value and financial forecasting in PI caseloads.

Whether it’s for your own business needs, those of your funders or those who might be interested in buying your WIP, this information is vital. Having reviewed PI WIP in excess of £450M, the insight gained has enabled me to develop a WIP valuation, risk management and financial forecasting tool that can be easily integrated into a case management system (CMS). Ultimately, it involves development of a CMS, integration of fee earner strategy and modern litigation “know how” to deliver meaningful management information (MI) on how a caseload will perform in the future. Working on the basis of where each PI claim is on its “litigation journey” in terms of ‘Liability, Quantum and Costs’ and ‘LQC Analytics’ captures the three key performance metrics PI lawyers must be acutely focused on to manage their caseloads. I have developed this by the sophisticated adaptation of a CMS to extract real time data and fee earner strategy to provide robust MI that leads to informed decisions on the operational management and funding of PI claims. Today, it’s simply insufficient to let a case run without focused strategy on the “litigation journey” without the ability to monitor where a claim is up to in its lifecycle. In standard costs work significant problems can also arise impacting on profitability, including: • Lack of past and future WIP and disbursement monitoring • Proportionality arguments • Costs budgets overrun • Fee earner conduct called into question • Hourly rates challenged Additional “know-how” that can dramatically impact positively or negatively on outcomes for clients and in profit includes: • The Rehabilitation Code • The Serious Injury Guide • Interim payments on account of costs • Tactical use of costs ADR and mediation • Part 36 tactics Having developed sophisticated workflows to cover these areas, I see a dramatic difference in performance between PI law firms who utilise them and those that don’t. ‘LQC Analytics’ provides predictive insights into the value and risk in PI caseloads combined with real-time fee earner driven data. Its reports provide objective oversight to the challenges PI law firms face in terms of predicting value, risk, cash management and profit. Addressing these areas now means law firms are guaranteed a significant advantage in PI claims management and enables management, funders, bankers, legal expense and professional indemnity insurers to invest in PI with confidence. Lesley Graves, Managing Director, Citadel Law.

July 2017

Modern Claims 35

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EDITORIAL BOARD

To get customer feedback, you need ‘attitude’! unning, or being part of, a successful legal firm requires everyone to ‘do a good job’. However, effective service in the claims sector is dependent on having a business strategy that encapsulates continuous improvement in established standards, good internal employment practices, but, above all, a positive attitude to eliciting and listening to customer feedback from our many and varied clients, whether they are individual claimants or business-tobusiness (B2B) professional clients (brokers, insurers, experts, loss adjustors, claims management companies). The company culture needs to espouse this principle and encourage everyone to buy into it. Creating a positive customer culture is vital for any business.

Communicating this vision to all staff requires face-to-face discussion and meetings to clearly explain what behaviours help to provide the desired customer experience; this means emphasising what is good about the existing culture, and helping them answer the question “so what do I have to actually do to make it better?” Support, monitoring and perseverance are equally important in encouraging enthusiasm to understand customers’ needs, reactions and provide positive responses. Many legal firms can’t or don’t articulate exactly what this attitude is. A lack of clarity about customer service can dilute positive company culture and may threaten the satisfying customer experience they are trying to create.

Issue 30 June 2017 IssN 2050-5744

of Law The Business

Assuming the firm has a great product or service, customers must trust the information, advice and action they get. Individualised customer care will help to grow business, encouraging customers to come back. Do you ever say “we get very few complaints”? Although complaining is on the increase due to our positive efforts to elicit feedback, it is worrying to note that, in a recent survey, 24% of customers (across sectors) who experienced problems chose not to complain, with 51% of these silent disgruntled customers stating that the main reason for avoiding making a complaint was that they thought it would make no difference! Make sure you and your staff promote a positive ‘sunny’ disposition and a willingness to go that extra mile, closing the loop on problem solving. Aim to excel at customer care by being responsive to clients and show a genuine empathy when communicating with anxious, unsure or upset customers. Providing outstanding customer service ‘with attitude’ will always add value to your business. Dr Hugh Koch, Chartered Psychologist, Hugh Koch Associates and Visiting Collaborator to Birmingham City University, Law School.

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FEATURES

Fixed Costs, Budgets and the Bill of Costs Gary Knight, Harmans, discusses the implications of Lord Justice Jackson’s Review of Civil Litigation Costs on how solicitors recover costs on behalf of their clients. “To improve is to change; to be perfect is to change often.” Winston Churchill The legal profession has faced a period of almost continuous change since the introduction of the Civil Procedure Rules in 1999, and never more so than following the publication of Lord Justice Jackson’s Review of Civil Litigation Costs (The Jackson Report) presented in 2010. There are many challenges to be faced, but the following may have the greatest impact on how solicitors recover costs on behalf of the client. • Budgets • Fixed costs • New format bill of costs

Budgets

Case management powers under CPR Part 3 enabled the court to consider any available budgets of the parties, and to take into account the costs involved in each procedural step (CPR 3.17). In assessing costs on the standard basis where a costs management order has been made, the court was not to depart from the receiving party’s last approved or agreed budget unless satisfied that there is good reason to do so (CPR 3.18). The case of Valerie Elsie May Merrix v Heart of England NHS Foundation Trust (2016) considered the relationship between costs budgeting and costs assessment and determined the extent to which the costs budgeting regime under Part 3 of the Civil Procedure Rules (“CPR”) fettered the costs judge’s powers and discretion at a detailed assessment. The Court at first instance considered that ‘cost budgeting was not intended to replace detailed assessment’ as found against the receiving party. The Claimant’s appeal heard by Mrs Justice Carr DBE [2017] EWHC 346 9QB found that the provisions of CPR 3. 18(a) and (b) had “shifted the burden to the paying party to show good reason at detailed assessment or summary assessment why the budget should not be departed from” given that the consideration of a costs budget at a costs management hearing was not only to establish an individual fund, but to give the parties an indication as to what was reasonable and proportionate to spend prosecuting or defending their claim. Therefore, what was reasonable and proportionate at a detailed assessment, unless the paying party could show good reason as to why it was not the case, should be in accordance with any costs budget set? Costs Judge, Master Whalan had considered a similar issue when assessing costs in Harrison v University Hospitals Coventry & Warwickshire NHS Trust and held that there could be no departure from the incurred costs figures in the budget without good reason.

Fixed costs

In January 2016 Lord Justice Jackson caused a stir by suggesting fixed costs should be applied to all costs in claims valued up to £250,000.

July 2017

Figures between £25,000 and £125,000 have been mooted but at the moment there are no clear recommendations, however the general view is that some form of fixed costs will be introduced His comments were perhaps borne out of frustration given the criticism aimed at the costs budgeting process, and fortunately he has distanced himself from the figure. Figures between £25,000 and £125,000 have been mooted, but at the moment there are no clear recommendations. However, the general view is that some form of fixed costs will be introduced.

New format bill

It may surprise some to discover Practice Direction 51L made under rules 47.6 and 51.2. provides for a pilot scheme (“New Bill of Costs Pilot Scheme”) to operate from 1 October 2015 to 30 September 2017. Initial uptake has been underwhelming, however the new format will become compulsory from October 2017. In his review of Civil Costs, Jackson LJ suggested any new bill should include: (i) a transparent explanation about what work was done in the various time periods and why. (ii) a user-friendly synopsis of the work done, how long it took and why. The new bill should also be: (iii) inexpensive to prepare. To achieve the above, it will be necessary to have a compatibility between time recording systems and a revised bill format. The idea that a bill of costs can be generated automatically and transmitted electronically is an attractive proposition. However, a reliable electronic bill produced using J-codes directly from a case management system would be dependent on faultless data and high levels of quality control. In a speech given in April 2016, LJ Jackson suggested “decoupling” J-Codes from the new format bill of costs. This has led to the introduction of the new practice direction. Under the new pilot scheme the parties are permitted to use the new format bill of costs but will not be forced to use J-Codes. Three major changes to be faced by the legal profession, though one might say that fixed costs will make the need for budgeting redundant. Though if budgets remain and are to be treated as “carved in stone” what need is there for a new format bill of costs? Gary Knight is Partner at Harmans.

Modern Claims 39

FEATURES

The Merry-Go-Round of Multiple Suppliers John Dobson, SmartSearch, explains the differences between the data tiers available for conducting AML procedures, and the challenges multiple AML platforms can create. ost clients will trade with UK individuals, UK businesses or both and some will also trade internationally. With this complex matrix of verification, it is not surprising that a raft of service providers have sprung up to satisfy this demand. Knowledge of data issues does make the choice easier.

Differences in datasets

Tier 1 data provides deep coverage and is the most accurate and reliable data for individual checks. This will typically consist of Credit Reference Agency (CRA) data, which is contributed to by the Banking & Financial Sector. Additional tier 1 data is the full Electoral Roll, created by local authorities. The Royal Mail Postal Address File Database provides household address verification. These datasets form the backbone for verifying clients in the UK. Tier 2 & 3 datasets are likely to incorporate energy, utility, directory databases and other public datasets including CCJs and bankruptcies. These datasets are updated infrequently, have lower coverage, are less reliable and typically support low cost solutions. The datasets required for UK business checks are similar to those used for individual checks. Tier 1 data would include the Companies House Database, providing data on incorporated businesses and name only information on Beneficial Owners and Directors. With unique technology, CRA data can be used to identify Beneficial Owners’ and Directors’ home addresses, and this enables an automated process. Tier 2 data primarily relates to unincorporated businesses, the major source being directory information such as Thomson Local and Yell. The final building block is the delivery of a global Sanction, SIP, PEP & RCA checking service. Be aware, some providers simply check the HM Treasury and CIA Sanction Lists; these are a fraction of the 1 million watch list records out there. Checking the watch lists is the easy part, and disappointingly most suppliers’ service stops here! Once you have a match, Enhanced Due Diligence (EDD) is then required to ensure the matched person is not your new customer. This aspect of Sanction & PEP checking can consume a great deal of resource, so automating the EDD saves time, aggravation and cost. The final twist in all of this is, with over 1,100 watch lists and 1 million entries worldwide, you can be pretty sure that there are some watch list changes every day. The only efficient way to deal with this is to have a daily monitoring service that checks all of your existing customers and then it will alert you to any new matches found. The system then automatically performs the EDD and records and communicates the outcomes to the end user and

The big missing word in a multiple supplier environment is control compliance management. You may now appreciate some of the complexities when you come to procure a global AML solution.

Muddled with multiple suppliers

There are many challenges with multiple suppliers, none more so than working out which system delivers the most reliable result. Some suppliers will use a waterfall approach, giving tier 2 & 3 data first priority; if no result is found they then access tier 1 data. This practice delivers an outcome that is typically low cost but is less robust than a solution driven solely by tier 1 data. Multiple supplier solutions inevitably create conflict where contradictory outcomes occur, and this can be exacerbated where different solutions are used across different divisions. Training on multiple systems brings a new degree of complexity, and upgrades or enhancements to one or more systems increases that complexity. Automating the processes is another challenge; multiple APIs, assuming these are available, will require more work by your IT Teams, assuming this resource is available. There are inherent commercial flaws in a multiple supplier strategy; different agreements all terminating at different times makes it difficult to jump off the merry-go-round. Each supplier is likely to require an annual licence fee and minimum service revenues that have to be paid each year irrespective of usage. With your budget spread over multiple suppliers, this will dilute your buying power. The big missing word in a multiple supplier environment is control. Just imagine a world where you input a new client’s name and address; in three seconds you have an AML outcome screened against worldwide Sanction & PEP watch lists and Daily Monitoring of that customer record against Sanction & PEP changes for the rest of your contract life. When a Sanction & PEP match is found, automated EDD leaves you free to concentrate on your business. Imagine that the same platform will deliver business checks in three minutes, with full Sanction & PEP checking, Daily Monitoring and automated EDD services. And that same platform will deliver your international checks. Game on! John Dobson is the Chief Executive at Smartsearch.

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June 2017

Modern Claims 41

FEATURES

Doctors Chambers Modern Claims Awards 2017 The third annual Doctors Chambers Modern Claims Awards took place on 27th April at the New Dock Hall, Leeds. Poppy Green reports on the highlights of the night and the prestigious winners.

n April 27th, professionals from across the sector gathered for the third annual Doctors Chambers Modern Claims Awards to recognise the talent and success in entrepreneurship, market development, business management and commitment to training in the claims industry. Over 400 guests attended for an evening full of food, music and entertainment. Upon entry, guests were met with a champagne reception, kindly sponsored by Forths Forensic Accountants. The room was full of anticipation ahead of the awards presentation.

Awarding Excellence

This year’s winners were decided by an expert Judging Panel, Chaired by Donna Scully, Managing Director, Carpenters, and made up of cross-industry professionals, including: Laurence Besemer, CEO, FOIL; Jonathan Clark, President, CILA; Deborah Evans, Chief Executive, Association of Personal Injury Lawyers (APIL); Ben Fletcher, Director, Insurance Fraud Bureau (IFB); Andrew Gibbons, Managing Director, Mason Owen Financial Services and BIBA; Stewart Harrison, Insurance Manager, Arcadia Group; Mark Hewitt, Managing Director, PIcalculator; Kieran Magee, Partner, True Solicitors LLP; Barbara Merry, Chair, Independent Women in Insurance Network or IWIN; Jason Moseley, Executive Director, Retail Motor Industry Federation; Simon Stanfield, Chair, MASS; Andrew Twambley, Founder, Injury Lawyers4U and Tim Wallis, Trust Mediation. Once seated, guests were treated to an excellent three course meal, as well as being tempted by the Silent Auction, sponsored by Trust Mediation and Expedite Resolution. The auction raised over £1,800 for the charities ageUK, who provide services and support to elderly people, and the Rainbow Trust, who provide practical and emotional support to families with a terminally ill child. Following dinner, the host of the evening, comedian Fred MacAulay, took to the stage to deliver a stand-up set before announcing the nominees, highly commended recipients, and overall winners. Bott & Co Solicitors were the first winners of the night, picking up ‘Law Firm of the Year’ for their extensive development and progress as a business. It proved to be an excellent night for Bott & Co as they then went on to win ‘Technology Initiative of the Year’ and ‘Specialist Legal Team of the Year’. David Bott, Bott & Co. said: “We’re very proud winners of Law Firm of the Year, Specialist Legal Team of the Year and Technology Initiative of the Year awards at the Modern Claims Awards 2017.” Meanwhile, Parklane Plowden were awarded ‘Chambers of the Year’, while Covéa Insurance claimed ‘Insurer of the Year’ and ‘Employer of the Year’. As the evening continued, Covered Insurance Solutions scooped ‘Broker of the Year’, while Motorplus Ltd won ‘Claims Management Company of the Year’. ISO took ‘Supporting the Industry’, and MRN Solicitors were awarded ‘Costs Company of the Year’. It was the first year of nominations for the award ‘Bodyshop of the Year’, therefore there was a lot of excitement ahead of this particular award. It was deservedly awarded to M&M Fix Auto Stoke-on-Trent for their commitment to training, outstanding customer service and overall excellence.

42 Modern Claims

We are really grateful to receive the award but accept it in the name of the families we represent as they have been such an inspiration, fighting for justice over 28 long years Ruth Bundey, Hillsborough Inquest Team The Future of Claims

The claims industry has already seen great changes, and is soon to see more as Brexit looms over us. However, as always, the industry has responded with a variety of innovative solutions, ensuring that they can continue to deliver a high quality service to their clients in this ever changing landscape. In recognising these solutions, ‘Innovation of the Year’ was awarded to Lavatech Ltd for their app inCase. This application is dedicated to helping law firms plug leaking time and reduce costs while improving the communication with clients. The next award was ‘Counter Fraud Initiative of the Year’ which was presented to 4th Dimension Innovation Ltd for their significant contribution to the detection and prevention of fraud. The ‘Client Care Award’ was secured by Auto Windscreens, and the ‘Outstanding Commitment to Training’ was won by Minster Law. The last few categories highlighted the developing talent within the claims sector. The ‘Rising Star Award’ went to Andrew Petherbridge, Hudgell Solicitors, while ‘Employee of the Year’ was awarded to Kate Hopkinson, CLS Risk Solutions Ltd.

Celebrating the Exceptional

The highly anticipated ‘Outstanding Achievement of the Year’ award was presented to representatives from the twelve firms and chambers who acted on behalf of the families of the 96 victims who died during the 1989 Hillsborough Disaster. Announcing the award, Donna Scully, Chair of the Judging Panel, spoke of the teamwork, collaboration and co-operation of those involved: “This award recognises not just the magnitude of the case in question, which will serve as a landmark ruling for years to come, but also the perseverance, hard work and collaborative spirit of those involved.” Ruth Bundey, of Harrison Bundey, said of the win: “We are really grateful to receive the award but accept it in the name of the families we represent as they have been such an inspiration, fighting for justice over 28 long years. It has been a real privilege to work alongside them, and they, not us, are the real achievers.” The final award of the evening was the ‘Lifetime Achievement’ award, which was presented to Michael Napier QC, who was described as one of the most creative and innovative lawyers of his generation. His long and successful career as a highly effective

July 2017

FEATURES

All of the night’s winners

champion of the reform and modernisation of the civil justice system, and his ability to deliver fair and pragmatic solutions, proves Michael Napier QC as one of the most dedicated and progressive members of today’s legal and claims landscape. Napier said of winning the award: “It is a very great honour to receive the Lifetime Achievement Award, particularly from Modern Claims as I have always tried to be modern in my practice of the law and in moving it forward. It is really important that everyone at this event remembers that the bottom line is serving the client and giving the highest standard of service. I often say to people who ask about my lifetime in the law that all I have ever done is to give the client the best form of justice that can be delivered for their problem. I dedicate the award to my late wife, Denise, who supported me all the time I was building my practice. On her behalf I really accepted that award, and I am very grateful for it.” Once the awards had concluded, the evening’s entertainment began with a stellar performance from Just the Way to Mars, a Bruno Mars tribute band. Guests also had the opportunity to test out the green-screen and have their face on the cover of Modern Claims Magazine, as well as enjoy a tasty treat from the retro waffle tuk tuk. As the evening came to a close, everyone gathered on the dance floor to enjoy an assortment of classic pop songs.

Fred MacAulay welcomed guests to the event

The evening proved to be a massive success and celebration of the talent and achievement within the sector. Donna Scully, Managing Director at Carpenters, said: “Modern Claims hit it out of the park tonight, it was just amazing. It was again difficult to choose between categories as it was so tight this year. I think obviously the finale of the Outstanding Achievement and the Lifetime Achievement awards were just fantastic. People really agreed with that and it was supported wholeheartedly. A brilliant night, and it really does get better every year.” Poppy Green is the Editorial Assistant at Charlton Grant. Modern Claims would like to thank all who attended, nominated and sponsored, for making the evening possible. For more information, and to register your interest for next year’s awards, please visit www. modernclaimsawards.co.uk, or get in touch with Ellie Campbell via ellie. campbell@charltongrant.co.uk or 01765 600909.

July 2017

Guests on the dance floor enjoying some popular classics

Modern Claims 43

FEATURES

Winners Law Firm of the Year

WINNER - Bott & Co Solicitors HIGHLY COMMENDED - Hudgell Solicitors Sponsored by SmartSearch

Chambers of the Year

WINNER - Parklane Plowden Chambers HIGHLY COMMENDED - 9 Gough Square Sponsored by Bar Squared

Insurer of the Year

WINNER - Covéa Insurance HIGHLY COMMENDED - AXA Insurance Sponsored by Ryan Direct Group

Broker of the Year

WINNER - Covered Insurance Solutions HIGHLY COMMENDED - Centor Insurance & Risk Management Ltd & Club Insure Ltd Sponsored by MSL

Claims Management Company of the Year WINNER - Motorplus Ltd HIGHLY COMMENDED - MSL Sponsored by UKS Medical

Costs Company of the Year

WINNER - MRN Solicitors HIGHLY COMMENDED - Costs ADR & Tri Star Costs Presented by Rainbow Trust Children’s Charity

Client Care Award

WINNER - Auto Windscreens HIGHLY COMMENDED - Covéa Insurance Sponsored by Checkaprofessional

Innovation of the Year

WINNER - inCase - Lavatech HIGHLY COMMENDED - LawBid & Nephos Solutions Limited Sponsored by Clerksroom

Rising Star Award

Specialist Legal Team of the Year

WINNER - Bott & Co Solicitors HIGHLY COMMENDED - Hill Dickinson LLP - Health Team Sponsored by Abbey Legal

WINNER - Hudgell Solicitors - Andrew Petherbridge HIGHLY COMMENDED - ALPS Legal Practice - Emma Brydges Sponsored by CLS Risk Solutions

Employer of the Year

Technology Initiative of the Year

Employee of the Year

WINNER - Bott & Co Solicitors HIGHLY COMMENDED - Covéa Insurance Sponsored by Eclipse

Counter Fraud Initiative of the Year

WINNER - 4th Dimension Innovation Ltd HIGHLY COMMENDED - Hill Dickinson LLP Sponsored by EuropCar

Supporting the Industry

WINNER - ISO HIGHLY COMMENDED - Auto Windscreens Sponsored by Checkaprofessional

Outstanding Commitment to Training

WINNER - Minster Law HIGHLY COMMENDED - Atlantic & Pacific Insurance Group & Covéa Insurance Sponsored by Charlton Grant Ltd

WINNER - Covéa Insurance HIGHLY COMMENDED - Bott & Co Solicitors Sponsored by Motorplus Limited WINNER - CLS Risk Solutions Ltd - Kate Hopkinson HIGHLY COMMENDED - Motorplus Ltd - Nicola Needham & Bott and Company Solicitors Ltd - Chris Neale Sponsored by Lyons Davidson Limited

Bodyshop of the Year

WINNER - M&M Fix Auto Stoke-on-Trent HIGHLY COMMENDED - Devonshire Motors Accident Repair Centre Sponsored by Laird

Outstanding Achievement of the Year

WINNER - The Hillsborough Lawyers Sponsored by Carpenters

Lifetime Achievement

WINNER - Michael Napier CBE QC Sponsored by Doctors Chambers

It is a very great honour to receive the Lifetime Achievement Award, particularly from Modern Claims as I have always tried to be modern in my practice of the law and in moving it forward Michael Napier QC Sponsors

EUROPCAR NEW BRAND BLOCK Color gradient background File: 20151645E Date: 7/10/2015 AC/DC validation : Client validation :

Kindly supported by

44 Modern Claims

July 2017

FEATURES

Just the Way to Mars provided the evening’s entertainment

Bott & Co picked up ‘Technology Initiative of the Year’

Covéa Insurance were awarded ‘Insurer of the Year’

The Silent Auction, sponsored by Trust Mediation and Expedite Resolution, raised over £1,800 for charity

Guests could enjoy a tasty treat from our retro waffle tuk tuk

Michael Napier QC, Winner of the Lifetime Achievement Award

Representatives from the Hillsborough inquests teams received the Outstanding Achievement Award

Law Firm of the Year - Bott & Co Solicitors

July 2017

Modern Claims 45

The business environment is changing, and hopefully for the better now that people are more socially aware and conscious of the businesses they are giving money to, as well as the values they have and what they stand for

FEATURES

Interview with Sam White Sam White, Pukka Insure, spoke to Modern Claims about the growing profile of commercial vehicle insurance and what it takes to stand out in the insurance market.

Q A

What are some of the current challenges and opportunities in the commercial vehicle insurance market?

The same challenges exist in commercial motoring as in the rest of the market. You’ve got some pretty sophisticated fraud that goes on in motor insurance generally, and that applies to commercial and personal, so you need to make sure that you can protect yourself and you have the right measures in place to be able to do that. The main challenges are pricing, which is very competitive as more and more players are moving into the market. I saw an article last week that said van drivers are now the single biggest vehicle segment on the road in the UK. If you look at the increase in parcel delivery, people using Amazon etc., it shows we don’t really want to leave our houses anymore; we want everything brought to us. But commercial motor in particular is a massive growth market, and it is expanding everyday. Bringing more technological advancements into the commercial vehicle market is also a really big opportunity to improve pricing and the customer journey.

What are some of the most important factors that allow insurance start-ups to establish themselves in a competitive industry?

You have to be well funded, and it is not cheap to get off the ground in the first instance. There are obviously a lot of regulations, and a lot of things that you need to have in place to make sure that you are well protected against a market that is quite sophisticated. For me, the importance is in being different and accepting the fact that you need to bring additional value. Being another insurance player producing exactly the same product and in exactly the same way just isn’t going to cut it. It sounds cheesy, but also having an ethos and culture that both your staff and hopefully your customers can get behind is key. The business environment is changing, and hopefully for the better now that people are more socially aware and conscious of the businesses they are giving money to, as well as the values they have and what they stand for.

Q A

What advantages do new insurers have over larger and more established insurance companies?

If you look at the increase in parcel delivery [...] it shows we don’t really want to leave our houses anymore; we want everything brought to us From my experience, being newer enables us to do things with much more speed and stability, whereas the larger players are less able to be innovative and less able to take a test and learn approach.

Q A

How do contemporary consumer expectations shape, influence and change insurance providers?

Not as much as they should. The new generation are a completely different breed to the one before, so we look at the sharing economy. I have just recently spent some time in Australia and they have got some really interesting innovations there, because their insurance is different to what we have in the UK. They insure the vehicle as opposed to the person, so anyone can drive that car; it has enabled them to launch Airbnb for cars. They have also got hourly insurance as opposed to annual insurance, and those kind of new products are going to be increasingly needed because consumers want what they want, not what we deem as an industry to be able to give them.

Q A

How do you predict commercial vehicle insurance will evolve in the next few years?

It is going to become a much more significant part of the market with the increased number of vans on the road and the increased number of parcel deliveries. It’s going to look very different to how it does today because there is going to be more flexibility. There are going to be part-time commercial vehicle drivers that are working for additional income, much like the Uber insurance driver space, and as such the industry is going to have to step up to be able to take into account those demands.

Sam White is CEO at Pukka Insure.

It’s obviously the economies of scale; they have the finance to be able to throw lots of money at problems. What they don’t tend to have is the flexibility and nimbleness of a new business. I am a great believer in test and learn. If you really want to deliver the best possible outcome in any situation, you have to be prepared to try new things, test them in a managed environment and decide what works and doesn’t work; if it does work then run with it, and if it doesn’t then stop it dead.

July 2017

Modern Claims 47

FEATURES

The changing face of damage management Claire Johnson, BDMA, discusses how the property claims sector has evolved over the last few years, and how it will continue to do so in the future to adapt to new challenges. he property claims landscape has changed significantly over the past few years, and with the likelihood of increased flooding and extreme weather incidents, the race is on to develop new ways to respond to these challenges.

Brexit too will continue to be a source of uncertainty for some time. These two very different factors alone will have an impact on underwriting in particular, and ultimately on other aspects of property claims.

Key advances

Sufficient capital expenditure to maintain and upgrade current flood defences, as well as enable provision of new flood protection systems, is unlikely to be forthcoming in the near future, and some difficult decisions will have to be made.

There have been major advances in the way we deal with property damage as a result of an increasingly collaborative approach by stakeholders. Insurers and all elements of the supply chain have worked to develop more sophisticated and proactive surge plans, which are refined and updated after each major incident. The launch of Flood Re is making a massive difference to households at high risk of flooding, enabling them to obtain affordable insurance cover that would not otherwise be available. There is also a much greater focus on the consumer in both residential and commercial property sectors, in line with the FCA’s Treating Customers Fairly (TCF) initiative. Further development of data and communication portals are benefiting both customers and the supply chain, while the development of advanced innovative drying systems is leading to reductions in strip-out, thus reducing the need for alternative accommodation and keeping down the overall claims cost. Cash advances and interim payments to the consumer have become more flexible and are used more widely than used to be the case. Additionally, the emergence of new flood protection facilities, resilient repairs and ongoing collaborative research are all contributing to a new approach to dealing with potential damage to properties. Client relationships and customer facing skills are particularly important in the context of property claims. The impact of an event that disrupts someone’s home or business life hits very hard, and it is essential that anyone involved in restoring normality to those affected is sensitive to the many aspects that can cause distress to the customer. This has been a focus for some time, and most companies have invested in significant training and up-skilling in this area, making client and customer relationships a key element of their corporate ethos. Policyholders’ expectations increase year on year and TCF is very high on the agenda, with those in the supply chain expected to meet exacting criteria and insurers themselves often voluntarily applying more flexibility in relation to some policy issues, such as resilient repairs.

Challenges remain

While there have been many improvements, the property claims sector faces a number of challenges.

The current economic climate of course has an effect on the property claims sector, like many others. Among other things, financial pressures tend to lead to an increase in fraud, which in turn can result in increased costs for both insurers and customers. Reductions in skilled manpower across the whole sector, for a variety of reasons, and the emergence of new business models that are not necessarily as efficient or cost effective as some tried and tested ways of working, all add uncertainties to the mix.

Looking to the future

Technology will play a huge part in improving the home claims experience for the insurer, the supply chain and the claimant over the coming years. The development of smart technology for both homes and businesses, the incorporation of sensors and mitigation devices for fire and water damage in particular and the potential for development of live feeds into insurer portals will offer massive benefit to all parties. Initially, some of these advances will create more demands for information and real time data. These expectations are being addressed through more advanced consumer portals and improvements will continue to be made. Since many causes of property damage are unpredictable, it is impossible to know how things will look a few years hence, but the BDMA is satisfied the damage management industry is well prepared for any changes that may come. While the Association continues to provide training and qualification, its members are investing in sophisticated technology and innovative solutions for a variety of perils, adopting resilient restoration measures and expanding collaboration. The UK insurance market is a world leader in many respects; Flood Re and interaction with government and the political arena are just two examples. It is incredibly well established and sophisticated regarding legislation, consumer rights and supply chain development and engagement. Whatever the future holds, we are well placed to meet the challenge. Claire Johnson is Press & Marketing Officer for BDMA. This year’s BDMA Conference & Exhibition on 22-23 November on Property Claims will focus on innovation and the industry of the future. Find out more at www.bdma. org.uk/bdma-conference

While climate change is predicted to result in increasingly frequent extreme weather events, it is by no means an exact science.

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July 2017

FEATURES

Why we need to be crystal clear on ADAS Rupert Armitage delves into the problems circulating ADAS calibration systems and the issues this presents for insurers and repairers. hen Thatcham released an assessment of ADAS calibration systems and process management in March 2017, citing its concerns about third party aftermarket tools, I cannot claim to have been surprised. The issues surrounding ADAS have so far been kept under the radar, but I am pleased to see that they are finally receiving the attention they deserve. Thatcham declared that recalibration aftermarket tools “do not cover all vehicles in the UK car parc […] Also, the systems do not calibrate all of the ADAS components that might be found on a particular vehicle, for example they may calibrate the front camera but not the radar”. The report highlights the numerous implications that may compromise the claims experience and safety of the customer, from not being able to recalibrate certain makes and models to out of date and incompatible technology with the vehicle’s ADAS features. The solution to ADAS recalibration is extremely complicated and requires considerable knowledge of the necessities of each vehicle manufacturer to begin to understand the many implications for both cost and safety. It is an issue that has been debated at length. However, it is my personal belief that, before-long, the only compliant method of recalibration will be through direct partnerships with the vehicle manufacturers themselves, a method that Auto Windscreens has pioneered and has been officially endorsed by Volkswagen Group, Toyota and Mazda.

Different directions

In my view, one of the biggest problems is that the insurers and vehicle manufacturers are coming at this from different angles. Insurers quite understandably want to keep the costs down, but vehicle manufacturers are concerned about the safety and compromise of warranty when, following a glass replacement, the repairer uses a cheaper non-manufacturer approved glass, often imported from China, which does not have the same transparency or audit trail through manufacture or distribution. Using this type of glass, of course, reduces the cost to the insurer but will not be recalibrated by any vehicle manufacturer dealership due to its nonapproval. Therefore any business providing a glass replacement service using non-OEM glass will, by default, have to use the aftermarket tools for recalibration. There’s no denying that this is a cheaper method, as the average cost for a non-OEM piece of glass for a Ford Focus is £117 compared to £445 for a genuine dealer part. However, there is little research into the potential consequences of the compatibility of non-OEM glass with ADAS features, although we have visibility of case studies that confirm our concerns. Of course we want to keep costs down, but at what point do we compromise the functionality and safety of the ADAS features because we are cutting corners and bringing the integrity of our business into question? There are a number of reasons why partnering with the vehicle manufacturers is a preferable option for all parties involved. The first is that the costs are clear up front, especially for insurers. For those with a diverse or high end book not covered by the aftermarket tool, they should expect substantial post recalibration costs from the customer who will need to pay for a genuine OEM piece of glass and recalibration in the vehicle manufacturer

July 2017

One of the biggest problems is that the insurers and vehicle manufacturers are coming at this from different angles dealership up front and then claim it back. This is not the customer journey we would want to deliver for the insurer or the customer. Rather than compromise our service, we have focused on gaining a much closer margin on costs by building relationships with vehicle manufacturers with preferential discounts.

Meeting the criteria

The other big problem is meeting the criteria for the recalibration in the first place. A recent article on GlassBytes cites the tools needed and the proper environment before you even begin the recalibration, including a ‘clean, level floor at least 30 feet wide’. It also details the lighting issues as ‘sunlight can affect the camera and bend the signal’. I fail to see how any technician could possibly meet these requirements performing a recalibration on someone’s driveway. Lastly, when recalibrating using the experience of the vehicle manufacturers in the dealerships, you can be certain that the technology upgrades for that vehicle are always up to date. David Elphick from Mazda recently commented: “Our kits are available for sale but so far we have never sold one to a third party.” Volvo recently pledged that by 2020 no one will be injured or die in a Volvo that is a result of ADAS failure on its vehicles. For each vehicle, we can show that the correct manufacturer process for static and dynamic calibration has been carried out, along with a complete global system check, by a manufacturer trained technician. When we’re looking at ADAS in terms of claims we need to see the full picture. It’s not just a question of cost, it could be a matter of life or death. Rupert Armitage is Managing Director of Auto Windscreens.

Modern Claims 49

FEATURES

Sector Soapbox

Modern Claims’s panel of resident associations outline the burning issues

The Law Commission – why aren’t we using it? ersonal Injury lawyers have become used to having to cope with rushed and ill-thought out changes to the law. The proposed changes to damages for whiplash were tacked onto the Prison and Courts Bill after an indecently hasty consultation. Apart from the unfairness to claimants who have suffered a whiplash injury and the sheer illogicality of the changes, MASS and the Strategic Alliance rightly criticised the evidence base and the assumptions behind the proposals contained in the consultation document, and offered expert evidence on both the numbers of RTA PI claims in recent years and the economic impact of the changes. Lip service is paid to the input from experts and those who know most about the law, and the proposed changes were largely the same as those put forward in the consultation document. It is a depressing state of affairs for practitioners when their experience is routinely ignored and major changes to tort law are made at the behest of powerful insurance industry lobbying.

If only there was some independent statutory body which could properly consider all the issues and put forward their recommendations to the government. Oh, hang on, there is, and it’s called The Law Commission. Set up in 1966, the Commission’s remit, amongst other things, is to conduct research and make systematic recommendations as to law reform for consideration by Parliament.

The Law Commission has not reported on Personal Injury since 1998, nearly twenty years ago. Interestingly, the subject of that report was a wide-ranging review of non-pecuniary damages, including a consideration of the question of a legislative tariff for the level of general damages. After consulting for six months (imagine that!) and considering the views of a long list of concerned bodies, practitioners and Judges, they rejected a tariff system as it “would politicise the question of what damages for non-pecuniary loss should be”. They also made the point that a tariff system would be “too rigid” especially when several injuries are suffered together, and there would be a real danger that an overall reduction in the general level of awards would follow (£20 for a psychological injury anyone?). The politicisation of this particular area of law, the refusal to take on board the views of experts, and the knee jerk and chaotic implementation of changes, serves no-one and cheapens the principles of a fair and just legal system. We have a perfectly good body to undertake extensive reviews of law reform in The Law Commission. Why aren’t we using it? Fiona Scurlock is a Management Committee member of MASS (representing the South East) and is a PI Solicitor at Gray Hooper Holt LLP.

Discount rate change creates circular argument leading to potential under insurance hilst the relative merits of the change to the discount rate continue to be argued by many stakeholders in the insurance world, much of the continued debate over what should or should not happen in this area will ultimately be dealt with within the consultation that is continuing simultaneously with the General Election. This issue, however, will hopefully be relatively high on the agenda of the new government, whatever political persuasion that may become on the 8th June.

The one fact that remains is that changing the discount rate in the manner in which it was changed has left many policy holders vulnerable to the risk of under insurance. When the FCA conducted their thematic work into the handling of claims in the SME sector, one of the main findings was that a significant number of policy holders may have been under insured. Clearly this was looking at a sample of claims within the property sector and did not pass a view on the liability sector, but in one moment of decision making by Liz Truss, the Secretary of State for Justice, she committed a large number of businesses and individuals to the potential of under insurance at the mid point of their insurance year, and retrospectively where claims had already occurred, as their renewal decisions had been made pre the discount rate change.

50 Modern Claims

The British Insurance Brokers’ Association has issued guidance to its members as significant movements in claims estimates have been experienced by the whole market. I am aware that at least one insurer has moved an outstanding estimate from £8m to £15m due to the rate change, which will leave the SME, who purchased a generous limit of indemnity of £10m, in the position of being significantly under insured. This could leave the SME facing bankruptcy. However, if the government had sought to amend the discount rate at a point in the future, which would have given both the industry and policy holders alike the opportunity to factor such change into their decision making, this problem may have been averted. However, sadly, many businesses are now exposed to the problem of under insurance, which they were not even given the opportunity to factor into their insurance procurement decision making. The market needs to continue to seek, through consultation, a satisfactory outcome to a position that is clearly no longer fit for purpose and remains in need of reform, but also to ensure that the focus of “treating the customer fairly” is highlighted to make individuals and businesses aware of the need to review their limits of indemnity in the light of this significant change. Andrew Gibbons ACII, Managing Director, Mason Owen Financial Services Ltd and Chair of BIBA Claims Working Group.

July 2017

FEATURES

Bugged by travel sickness have previously talked about credit physiotherapy having the potential to become the new credit hire, and over the last few months there has been plenty of speculation that travel sickness claims could become the new whiplash.

face legal proceedings in the UK or Spain”. And the details of some claims have gone beyond the legal press and reached the weekend pages of the tabloids. One recent example included a counterclaim from the hotel for the damages caused by a fraudulent claim.

Like whiplash, travel sickness claims only appear to affect British people; like whiplash they are generally classed as a non demonstrable illness; and they also appear to be fuelled by Claims Management Companies operating in this area.

In terms of reputation, it does the British no favours to have the most virulent compensation culture in Europe and possibly these days the world. I know the counter argument is that it is a reflection of improved access to justice, but our access to justice only seems to increase in areas where CMCs can make profit.

The differentiator for firms bringing these claims is that they fall outside the current fixed costs regime and are therefore seen as having the potential to fill the revenue void caused by previous reforms. This situation is likely to worsen if the Prison and Courts Bill, the progress of which was halted by the snap Election, goes through as drafted. Certainly it has troubled the government enough to put out a warning through the Foreign Office that: “You should only consider pursuing a complaint or claim if you have genuinely suffered from injury or illness. If you make a false or fraudulent claim, you may

It is likely that the Government will see this as an increasingly important area for reform, however with the general election it is difficult to see it happening as quickly as some would like. When it does come it could end up being more severe than people bargain for, which would indeed have the potential to hamper access to justice, but we may end up in another situation where the behaviours of a few lead to a sledgehammer approach. Nigel Teasdale, President of the Forum of Insurance Lawyers (FOIL) and Partner at DWF LLP.

What’s next for the Discount Rate? he announcement of a change to the Discount Rate from 2.5% to minus 0.75% was met by surprise from all quarters. I have little doubt that even those claimant lawyers who campaigned so strongly for a change to the rate could have predicted such a drastic reduction. The decision was based on a misinterpretation of the powers the Lord Chancellor has in setting the rate and that was why the ABI felt compelled to attempt to stop the Lord Chancellor through the courts.

Ultimately, it was good to see the Lord Chancellor recognising the highly unsatisfactory approach to setting the rate and launch a consultation on setting the rate in the future. As we catch our breath following the closure of that consultation, we take a look at what lies ahead for the Government and the Discount Rate. What is clear moving forward is that the link between the setting of the Discount Rate and Index Linked Government Securities (ILGS) must be broken. Investment in ILGS in today’s economic climate would be ill advised, and who is to say what the safest investment options will be for claimants in ten, twenty or more years’ time. That is why the rate should not be tied to any one

July 2017

particular investment portfolio going forward, but reflect the reality that claimants invest their lump sums in low risk, mixed portfolios of assets, which yield higher average returns than investing all a claimant’s compensation in ILGS. Where claimants want to minimise investment risk, they can choose a Periodical Payment Order Many will be questioning how the Government intends to bring about changes to the Discount Rate – pace is key for a decision which, when changed on 27th February this year, ended up costing the NHS £6bn over the next four years. It has been estimated that about that same cost again has been passed to motor and liability insurers, and ultimately motorists and businesses, through higher premiums. As such, whichever party wins the General Election, getting the Discount Rate right must be one of their priorities, and it would be no surprise to see further changes again this year. Natalie Larnder, Policy Adviser, Civil Justice Association of British Insurers (ABI).

Modern Claims 51

Providing leading Experts in Psychiatry and Psychology We are a well established company, with a panel of reputable Experts selected for their experience in the field of mental health. Expert in Mind Ltd has a strong working relationship with all panel members, offering a one stop interface between instructing party and Expert. Our experience in this sector, and knowledge of our Experts enables us to advise you on the best Expert for you. We can promptly provide their timescales and fee estimates. Each Expert is assigned a personal assistant meaning that you have one case manager with whom you can discuss any aspect of your case from start to finish. We are not a call centre, nor an agency, we are here to ensure a seamless process in the provision of Expert mental health assessments and there are no hidden extras. Our psychiatrists and psychologists operate in London and the South East, having considerable experience in providing medico-legal reports in a range of areas, including: • • • • • • •

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CASE STUDIES

Eclipse implements its Proclaim Case Management Software solution at new start-up firm, McDermott Smith Law clipse Legal Systems is implementing its Law Society Endorsed Proclaim Case Management Software solution at new start-up, McDermott Smith Law.

The Liverpool-based firm has been founded by Andrew Smith and Joseph McDermott and will focus solely on Personal Injury Darren Gower work. Possessing a wealth of experience from larger firms, Andrew and Joseph took the decision to establish their own practice in order to offer friendly and expert advice, combined with truly individual client service. As a new start-up within the Personal Injury sector, McDermott Smith Law recognised the need for a comprehensive and centralised software solution. The practice has selected Eclipse’s Proclaim Personal Injury Case Management system to ensure maximum productivity from its inception. Furthermore, Proclaim will eliminate a number of administrative duties including document production, and will enable staff to focus on building strong client relationships.

In addition, McDermott Smith Law will benefit from Proclaim’s integration with the MoJ’s RTA and EL/PL Claims portals. Access from the desktop application will be 2-way, ensuring a quick and efficient method of processing cases and resulting in full compliance with the MoJ’s claims process. Andrew Smith, Director at McDermott Smith Law, comments: “Joseph and I have both worked with Proclaim at previous firms so we knew when starting our own practice that it would provide us with a solid platform on which to develop and expand. The Personal Injury sector is incredibly competitive, and involves considerable volumes of document production. Implementing Proclaim means we can overcome these hurdles and benefit from high levels of automation, ultimately resulting in our time being spent on client relationships and business development.” For further information, please contact Darren Gower, Marketing Director at Eclipse Legal Systems, part of Capita plc, via Darren.gower@eclipselegal. co.uk or call 01274 704100. Alternatively, visit www.eclipselegal.co.uk

Eldon Insurance Services ltd enjoying rapid growth ue to the massive success of GoSkippy.com insurance over the past 4 years, the claims arm of Eldon Insurance Services ltd is pleased to announce that it is moving offices to manage its continued growth trend.

A market leading claims operation, the claims division of Eldon Insurance Services has set the bar in insurance claims management working proactively and effectively for both its customers and partners. Through efficiently validating, extracting and exchanging all required information, Eldon Claims is able to provide innovative and fluid claims solutions, providing a full suite of claims handling functions, from First Notification of Loss through to Catastrophic Personal Injury Claims, with a particular focus on Insurance Fraud. Eldon Claims is now reaping the rewards with an established and growing part of the 1000 employee insurance service business. 250 claims handling and support staff are employed by Eldon Claims, serving over 300,000 policy holders for its partners. 2016 saw 65 staff joining the team with more expansion on the horizon leading to the relocation of the business and the takeover of 21,000 sq ft of office space at No 2 St James Gate, Newcastle. Melanie Bebbington, Claims Operations Director, Eldon Insurance says the new premises doubles current working space over 2 floors to help accommodate growth and enhance facilities for staff. “Our 7 week fit out will commence on the 1st July 2017 and demonstrates our belief that good quality working space is essential to retain and attract staff and encourage productive

July 2017

Eldon Team plus Melanie Bebbington far right and Patrick Mathieson – Knight Frank far left.

output. This is an incredibly exciting development for Eldon. We believe that Newcastle is an excellent place to thrive as a business and the increase in working space provides room for our planned growth during 2017 and beyond.” Patrick Matheson, partner, Office Agency at Knight Frank, confirms the letting was based on a 10 year lease and completes the occupation of the entire 83,000 sq ft building.

Modern Claims 53

10 MINUTES WITH

Michael Warren Q A

Has the industry changed drastically since you started working in it?

No it hasn’t - not in the two years I’ve been involved. The next two, however, could be a very different story with the personal injury reforms being proposed by the Government.

The Civil Liability Bill seeks to reduce the incidence of whiplash claims and the government says that motorists will benefit by £35 per policy from the savings that will be accrued. If the Bill becomes law, claimant firms that have relied on minor RTA claims for their raison d’être may well have to close their doors. The whiplash reforms are the latest in a huge raft of government measures to reform civil justice during the last five or six years, including LASPO, which came into play in 2013. But while the civil justice landscape has changed, the legal industry has not fundamentally changed in response. Neither is there any sense that we have learned from previous experience in terms of how we, as an industry, respond to these threats. Internal politics seems to have trumped the need to make our case to ministers and the public in a joined up manner, illustrating that our sector has applied to itself one definition of insanity: doing the same thing over and over again and expecting different results.

Q A

What has been the key positive or negative impact of change in your area of the market?

Speaking from a consumer’s perspective, the most negative impact has been the increased incidence of cold-calling, driven by unscrupulous claims management companies (CMCs) and the law firms that support them. These so-called businesses make the public’s life a misery. They operate right at the edge of acceptable practice and their greed tarnishes the whole claimant sector. Neither does the public distinguish between CMCs and claimant law firms; to the public, they are all the same. The irony is that, should the whiplash reforms become law, the vacuum left by claimant lawyers exiting the market will be quickly filled by CMCs, able to operate on very low margins. Their focus will also shift to new kinds of claims, such as holiday sickness. The unwillingness of law firms and insurers to compromise and work together in the past has forced politicians to step in, with unintended consequences, and the general public will be the loser.

Public discourse has been impacted by social media with disastrous results. Our country is less kind, less generous, and less forgiving as a result are trained to go to huge lengths to assist clients with their claim, even in the fixed costs world where we largely operate and where margins are small. I try and bring this sense of dedication and selflessness to my senior leadership team so that these behaviours permeate Minster Law from top to bottom

Q A

Have you had/got a mentor? If so, what was the most valuable piece of advice they gave you?

I don’t have a mentor, but I do often recall a piece of advice given to me by my last employer – that a contract is only ever a starting point for a re-negotiation. The point is that even from fixed positions, where red lines simply cannot be crossed, there is room for compromise if there is a genuine appetite from all parties to find a solution.

Q A

If you were not in your current position, what would you be doing?

Sitting on a motorcycle, either training people to ride, or running overseas tour groups. It is an old cliché but motorcycling gives me freedom; of thought, word and deed. Biking has become a passion of mine and at Minster we have the pleasure of working with Bennetts, a great brand associated with motorcycling. I’m delighted that we’ve been able to help existing bikers through our campaigns, such as #canyouseemenow, #backtobiking and those who have had the misfortune to be catastrophically injured, through our work with The Bike Experience.

Michael Warren is Managing Director of Minster Law.

Another impact of change that applies to all walks of life, including the law, is the echo chamber effect of social media. Public discourse has been impacted by social media with disastrous results. Our country is less kind, less generous, and less forgiving as a result.

Q A

Who inspires you and why?

I can’t think of any particular individual – I’m more inspired by behaviours that people exhibit, for example selflessness, and determination. You can find this in all walks of life. One thing I was surprised about when I became the MD of Minster Law was the dedication of our claims experts looking after customers who had been injured. I was impressed to discover that individual lawyers

54 Modern Claims

July 2017

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