Modern Insurance Magazine Issue 35

35 ISSUE

ISSN 2515-3803

“We need to make sure that we are not just up to speed but ahead of the game” Steve Plunkett, Volvo

Making an impact: MGAs

Peter Staddon, MGAA

Lyons Davidson Solicitors Roadshow: The Personal Injury Reforms

The silent surge

Crawford and Company

Working with

A CENTURY OF PROFESSIONALISM

10 Minutes With...

Peter Goodright

Nationwide Vehicle Assistance

EFFICIENT POST-ACCIDENT CUSTOMER MOBILITY AND EXEMPLARY CUSTOMER SERVICE

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MODERN INSURANCE

EDITORIAL CONTRIBUTORS Andrew Chandler Head of Sales and Marketing FMG

Paul Taylor Managing Director, Operations Plantec Assist

Clint Milnes Group Director, IT and Change Winns Solicitors

Peter Goodright General Manager Nationwide Vehicle Assistance

David Williams Technical Director AXA Insurance (UK)

Richard Taylor Sales and UK Business Director GT Motive

Donna Scully Director Carpenters Group

Rob Cooper Co-Founder and Executive Director Me Group Holdings

Jason Tripp Managing Director Coplus

Rupert Armitage Managing Director Auto Windscreens

Keith Tracey Managing Director Aon Risk Solutions

Steve Kelly Engineering Underwriting Account Manager Allianz Insurance plc

Marc Lafferty Chief Revenue Officer EDAM Group Mark Budd UK Head of Innovation Zurich Insurance Group Michael Lewis CEO Claim Technology Ltd Nik Ellis Managing Director Laird Assessors

Stephen Marshall ACII Managing Director Insure Apps Steve Thompson Director Industry Insights Trevor Lloyd-Jones Senior Marketing Manager, Insurance LexisNexis Risk Solutions

Paul Tasker Managing Director REG UK

WELCOME he last issue of 2018 – what a year it’s been! As 2018 comes to a close, millions of people will be looking to the future to see what 2019 has in store. Insurance professionals are no different, although they have likely been looking further ahead and for much longer as they try to identify emerging risks and trends that could impact their policyholders. In this edition, as well as our wonderful panel of editorial board experts, we have a whole host of interviews and features focusing on the automotive industry and technology, and what is on the horizon for 2019. Starting with an interview with Peter Staddon, Managing Director at the MGAA, we discuss the role of the MGA within the industry and how an MGA benefits an insurer. We also hear from Steve Plunkett, Volvo’s Body and Paint Development Manager about vehicle safety and repair, and how technology is changing the automotive.

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We also have coverage of The Personal Injury Reforms Roadshow in partnership with Lyons Davidson Solicitors. This series of roundtables aimed to look at the impact that the proposed reforms would have on the personal injury claims process and how we as an industry will need to change in order to work in this new claims environment. The four roundtables covered the Claimant Journey, Routes for Advice and Assistance, Defending Claims and the Road to Recovery – you can find all the details starting from p.48.

The second annual UK Customer Service Excellence Awards will be taking place on Wednesday 10th April 2019 at Café de Paris in London. This unique event is the perfect opportunity to celebrate outstanding customer service within the industry.

We have a huge range of exciting categories to enter into, which have been designed to showcase all areas of customer service, whether that’s your call centre, your claims staff, your charitable work or how you go the extra mile in all aspects of customer service, as well as many more customer-centric categories, there is something for everyone! It is entirely free to nominate, and nominations are open until Friday 8th February. You can find all the details on how to enter at www. customerserviceexcellenceawards.co.uk. Modern Insurance would like to wish all nominees the best of luck for the UK Customer Service Excellence Awards, and for 2019!

ISSUE 35 ISSN 2515-3803 Co-Editor Poppy Green Project Manager & Events Sales Rachael Pearson

Modern Insurance Magazine is published by Charlton Grant Ltd ©2018

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.

Issue 35

Poppy Green, Co-Editor, Modern Insurance Magazine.

01765 600909 @Modern_Poppy poppy@charltongrant.co.uk

Modern Insurance 03

MODERN INSURANCE

ISSUE 35 | ISSN 2515-3803

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Issue 35

MODERN INSURANCE

NEWS 07 The pragmatic applications of AI in the insurance industry

Nick Henthorn, Chief Revenue Officer at Outra, discusses how we can utilise data and AI effectively in order to better target our customers.

27 New opportunities

29 How are you preparing for the eventualities that Brexit may bring?

10 Making an impact: MGAs

Speaking to Modern Insurance, Peter Staddon, Managing Director of the Managing General Agents’ Association (MGAA), helps us get to grips with MGAs and their role in the industry’s ecosystem.

14 Vehicle safety is a priority

Modern Insurance spoke to Steve Plunkett, Volvo’s Body & Paint Development Manager, about vehicle safety and repair and what they have planned for the future as well as 2019.

EDITORIAL BOARD 19 Times have changed

Richard Taylor, GT Motive

21 The rise of renewables

Jason Tripp, Coplus

23 We can do more

Rupert Armitage, Auto Windscreens

27 How can we better support claimants through their claims journey?

Donna Scully, Carpenters Group

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58 To settle or not to settle?

Andrew Chandler, FMG

David Ovenden, Willis Towers Watson.

35 “How can we better support claimants through their claim journey?”

Nik Ellis, Laird Assessors

37 Sector Soapbox

Modern Insurance’s panel of resident associations outline the burning issues facing the claims sector.

40 Industry Innovators Interview: Deemly

Modern Insurance spoke to Sara Green Brodersen from insurtech start-up Deemly, a reputation and social verification tool for P2P marketplaces and sharing economy businesses, looking to build trust and therefore help established platforms and businesses grow.

Alastair Burrows, MarkLogic, discusses what is driving digital transformation in the insurance industry.

Loss of earnings claims are generally considered something of a grey area and an aspect of claims handling that many personal injury professionals will readily admit they struggle with. A lack of proper training, resources and support may explain why so many toil with these cases as Vitek Frenkel, Frenkels Forensics Chartered Accountants, explains.

65 The silent surge

43 The requirement of cultural change for successful digital transformation

Stephen Marshall, Managing Director of Insure Apps, takes us through his journey as an insurtech start up and how insurtech has changed the industry.

63 Claiming for loss of earnings

FEATURES

Steve Thompson, Managing Director of Motor Claims consultants, InduSTry Insights, raises the interesting debate of whether an insurer should settle third party motor claims with cash or other incentives, rather than fulfilling the claim themselves via their supply chain?

61 A year in review, Insure Apps: An insurtech start up

Clint Milnes, Winns Solicitors

35 Join the revolution

Keith Tracey, Aon Risk Solutions

Rob Cooper, ME Group

50 The Claimant Journey 52 Routes for Advice and Assistance 54 Defending Claims 56 Road to Recovery

33 Changing the face of business

Paul Taylor, Plantec Assist

25 The regulation of ADAS recalibration

Michael Lewis, Claim Technology Ltd

Monica Savic-Jabrow, Barrister Direct, introduces Quick Costs and everything you need to know about the firm.

48 Lyons Davidson Solicitors Roadshow: The Personal Injury Reforms

33 The changing shape of the bodyshop repair industry

25 Improving outcomes

Marc Lafferty, EDAM Group

31 What’s holding Blockchain back?

23 Risk and trust

47 Quick Costs

31 Training excellence

Steve Kelly, Allianz Insurance plc

21 Improving the claims journey

Trevor Lloyd-Jones, LexisNexis Risk Solutions

David Williams, AXA Insurance (UK)

19 How is technology causing competition in the industry to change?

Paul Tasker, REG UK

29 The telematics opportunity

INTERVIEWS

Mark Budd, Zurich

Insurers face the biggest spike in subsidence claims in fifteen years after the summer heatwave. Technology, social media and austerity are just a few factors demanding a more sophisticated claims approach this time around. Sne Patel, Head of Subsidence at Crawford & Company, explains.

10 MINUTES WITH 66 10 minutes with…

Peter Goodright, Nationwide Vehicle Assistance

46 Looking ahead

Modern Insurance caught up with Andrew Marsh, Director at Auto Industry Consulting, about all things automotive.

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right people. right skills. right technology.

www.carpentersgroup.co.uk

END-TO- E N D CO M P L E T E C L AI M S & L E G AL SO L U T I O N

NEWS

The pragmatic applications of AI in the insurance industry

Nick Henthorn TALKS NEWS Nick Henthorn, Chief Revenue Officer at Outra, discusses how we can utilise data and AI effectively in order to better target our customers. ncreasingly, artificial intelligence and deep learning are hitting the headlines. Recently it was reported that IBM has created a secret algorithm that develops scents. The perfume industry famed for its highly paid human ‘noses’ is about to be disrupted as the technology giant developed a system that studies more than 1.7 million existing fragrance formulas (from perfumes to scents used for toothpaste, candles, shower gels, face creams etc.) and then compares the ingredients to other data sets, like geography and customer age. This algorithm will be used to develop new perfumes that will target very specific market segments. For instance, if asked for a fragrance that would appeal to millennials living in Brazil, the algorithm would compare formulas against scents that were popular in that area and age range. One of the perfumes it created had a fruity, floral smell with scents of Osmanthus tea, lychee and patchouli. When tested, the fragrance received positive feedback from focus groups, and came out on top even when tested against other perfumes popular with Brazilian millennials. Another exciting application of AI, from Georgia Institute of Technology, is the creation of a machine learning system that has taught itself video game design by ‘watching’ footage of people playing classic games such as Super Mario and Kirby. By working out the components of what makes a good game, the system can create complex programmes to significantly enhance games created by human programmers.

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The key lies in understanding more about the customer So what has all this got to do with the insurance industry?

Quite a lot actually! AI is becoming increasingly mainstream and is no longer the domain of boffins in computer labs. Data scientists are now common place in organisations or as a part of an outsourced marketing team. And unsurprisingly, given the depth of data generated by the insurance sector, data scientists have turned their attention to creating AI-enhanced models that are reshaping traditional claims, distribution, underwriting and pricing models.

It’s no surprise therefore that The Society of Insurance Research

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NEWS

What is important to remember is not what might be possible next year, in five years, or in ten years, but how AI can be applied to the business right now or risk being left behind! has identified data science and AI as the two most important disciplines in terms of securing competitive advantage. As a result, there are plenty of articles to be found pontificating on the future of the insurance industry and AI, outlining what is likely to be possible, but it is much harder to find more pragmatic literature explaining what is possible using machine learning right now. The key lies in understanding more about the customer. By doing this insurers can use AI to better target them at the moment they are ready to buy with the right premium, aid the application process and enhance the relationship over the course of the policy.

AI-enhanced premiums

To gain a comprehensive view of potential risk, insurers need to be able to rely on accurate data that can be applied to every decision.

Through AI, key variables can be generated to support insurers in identifying potential risks and therefore optimise pricing models.

For home insurance, for example, these might be: • Water escape: Developing models to accurately understand the number of bathrooms and any building works undertaken on the property that are all key factors of risk.

• Size: Gaining an accurate view of the number of bedrooms and square footage of the property.

AI-enhanced communication

Finally, using the latest data science technique it is possible to create more accurate and predictive customer segmentations, or layer multiple segmentations together at lower cost and greater speed to align business objectives. By building insights about customers it is possible to use AI to understand why customers behave as they do and determine what motivates them to act.

Data can be monitored and interpreted over time to use change as a predictive variable – for instance children coming of driving age – in order to interpret trends and predict future customer needs. This means that AI can predict when individual customers are in the market for a specific product, know what type of communication will result in a purchase and understand how to engage them for future policy purchases. Again all of this must be underpinned by confidence scores so that insurers can be confident in the models they are using to set prices, identify risk and communicate with their customers.

AI is, without a doubt, a future forward technology. Seemingly on a monthly basis new developments are reported. However, what is important to remember is not what might be possible next year, in five years, or in ten years, but how AI can be applied to the business right now or risk being left behind!

NICK HENTHORN is the Chief Revenue Officer at Outra.

• Home Rebuild Cost: creating a model that predicts the rebuild cost for houses across Great Britain, including confidence scores to enable autonomy in creating thresholds around the pricing policy.

• Roof Construction Type: Using deep learning with satellite imagery to categorise roof types (flat, pitched or thatched).

AI-enabled application

Research shows that 55 million insurance policy purchases are abandoned each year during the application process. This is because it takes time and effort for consumers to fill in lengthy insurance application forms. By pre-populating online applications, using an API makes it quicker and easier for prospects to complete forms and means the information is more accurate as the data is based on fully verified data rather than customer hearsay. It is proven that customers can sometimes ‘stretch’ the truth about their home or driving behaviour if they believe it will lower their premium. Common white lies might include claiming a tall tree is further away from the home than it actually is or estimating down annual mileage. Through sophisticated data management techniques it is possible to fill in the application forms on behalf of the customer. Car insurance applications can do this by using data from DVLA whilst home insurers can use household data to pre-populate questions such as number of bedrooms and bathrooms, property type, age of property, and rebuild costs. All the customer has to do is check that the information in the form is correct, taking seconds, rather than minutes to complete, significantly reducing industry churn.

In addition, these datasets can also be used to run marketing campaigns with a fully underwritten home insurance quote, as opposed to an estimate. This in turn, will drive a stronger call to action, allowing the consumer to simply enter a unique code on an insurers’ website and go straight to payment.

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Issue 35

INTERVIEW

Making an impact: MGAs Speaking to Modern Insurance, Peter Staddon, Managing Director of the Managing General Agents’ Association (MGAA), helps us get to grips with MGAs and their role in the industry’s ecosystem.

Q A

The entrepreneurial nature of MGAs means they can help a company be seen as supporting innovation and a smarter way of transacting business

How does a successful managing general agent (MGA) business model work?

The successful MGA business model needs to be based on good quality, technically-sound underwriting. This is important to ensure their capacity providers, whether in the company market or Lloyd’s syndicates, remain confident in their ability to provide an appropriate return on capital.

Building and maintaining the relationship between MGAs and their producing brokers will enhance the business model. MGAs also need to demonstrate an understanding of the insurance risk and subject matter, and the capability to underwrite the submission at an appropriate rate to gain broker confidence in their abilities.

An MGA needs to have a tight grip on its own cost ratios. As many insurance companies and Lloyd’s syndicates have ratios, which are far in excess of the MGA’s, this will allow the capacity provider to maintain a presence in a market whilst reducing its overall operating costs.

Leveraging technology, whether through their own IT systems of those of external suppliers, enables MGAs to capture more accurate data for the rating of products.

Q A

What is an MGA’s life cycle?

There is no one definitive life cycle of an MGA as it all depends on the class of business they are writing and the costs of developing good quality products and appropriate software.

Pure economics can also impact on the success of the business; whilst MGAs might have an initial advantage within a specific sector, cyber insurance for example, as the market grows and develops, competition will add commercial pressures. However, competition also provides more choice for policyholders.

As MGAs develop additional services to help them to maintain a profitable business, they can also aide their capacity providers in governance and oversight, which helps the insurer to enhance its own offerings.

All these elements help to build a stable platform, but there are still some draconian binding agreements in the market that can put additional pressures on MGAs, curtailing their operations and reducing their viability.

10 Modern Insurance

Q A

What is the MGA’s role in the insurance industry’s ecosystem?

MGAs are extremely entrepreneurial and, as such, they are often at the forefront of changes in the UK insurance market.

Whilst not a new model, over the past five to ten years, MGAs have come to be seen as market leaders and I believe that their product and technology innovations will, ultimately, demonstrate how the UK remains a leader on the world stage of insurance.

Their reduced operating costs are seeing many insurance companies and Lloyds’ syndicates reviewing their own costs as well as their centralised and regional distribution models.

In the US, the main driver for the development of MGAs was to enable East Coast businesses to write risks based on the West Coast, as such, they sought good quality partners to help them achieve that. In the UK market today, we see a similar approach to accessing quality and expertise, with insurers selecting MGAs to help them write and create a sustainable revenue stream from niche business.

Q A

What are the benefits of working with an MGA?

The benefits of working with an MGA will vary depending on the insurer’s individual requirements. Predominantly, partnering with an MGA will help to gain a sustainable income from small ticket business and to better understand the technical needs of the risk and associated insurance products. This doesn’t mean that insurers are not properly training or incentivising their employees to build a good business.

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INTERVIEW

The days of developing an insurance product to ‘sell’ to policyholders are numbered as more and more buyers are seeking policies, terms of cover and payment arrangements to suit their specific lifestyle Operating costs are always at the back of the insurer’s mind and so working closely with an MGA can be a much more cost-effective route to market. The entrepreneurial nature of MGAs means they can help a company be seen as supporting innovation and a smarter way of transacting business.

Whilst the vast majority of MGAs are smaller businesses, they are doing what they love, whether that is underwriting a risk or developing a new policy wording, breaking new ground on previously missed opportunities or adjusting a claim, this all helps to drive a more rewarding business environment.

Managing General Agents Managing General Agents (MGAs) are an important, established and fast-growing sector of the UK insurance industry.

Over 300 MGAs currently underwrite over 10% of the UK’s £47 billion general insurance market premiums.

MGAs deserve specific representation to lobby on their behalf, communicate their considerable benefits and drive best practice.

The Managing General Agents’ Association (MGAA) was formed in 2011 to fulfil this role.

As a not-for-profit organisation, the MGAA, and its board of directors and specialist committees focus 100% on shaping the future of delegated underwriting in the UK.

Q A

How can MGA’s continue to add value for both insurers and customers without adding to costs?

MGAs actually reduce costs in relation to transactions and policy development and production. Their nimbleness and lower operating costs mean MGAs can turn around non-profitable portfolios and provide the service that brokers expect and demand for their client base.

They can also provide a conduit for provincial brokers to access additional insurance markets helping to develop their own businesses. In the London market, MGAs assist by taking a sizeable portion of larger risks, providing the broker with more options than just using a restricted number of available syndicates or insurers.

Q A

What pressures are facing MGA’s and are there plans in place to help overcome them?

The greatest pressures come from the regulator. Whilst we all agree good regulation enables the UK to thrive, its cost is an issue. MGAs are SMEs, so we have and will continue to call for regulation to be proportionate.

There is a school of thought that some capacity providers are only in this market to make a quick turn then jump out. This impacts on the integrity of the UK insurance market as well creating issues for the entire intermediary base, both brokers and MGAs. Unsustainable underwriting does nothing for the UK market. Obtaining good quality insurance capacity and being able to maintain a long-term working relationship with it benefits all sectors of the market.

The MGAA are working to address many of these issues together with other interested parties from across the insurance industry to achieve a sustainable solution.

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INTERVIEW

Whilst we all agree good regulation enables the UK to thrive, its cost is an issue

Q A

What digital solutions will MGA’s need to embrace as technology continues to advance?

Online trading is firmly embedded into many MGA’s existing systems. They are continually upgrading these systems with even greater capture of management information (MI). By using this MI, the MGA can build ever more successful business. For example, we are now seeing a new breed of software which can analyse both the placed and the rejected risks. This data can help to identify new classes of business or ways to develop existing systems, leading to greater coverage and a potentially wider client base.

As an industry we must be able to respond to the evolving needs of millennials and tech-savvy policyholders. The days of developing an insurance product to ‘sell’ to policyholders are numbered as more and more buyers are seeking policies, terms of cover and payment arrangements to suit their specific lifestyle.

Q A

What challenges and opportunities are there for MGAs looking to grow?

The sky’s the limit for MGAs. With successful operations and profitable businesses, they can grow and enhance their portfolio. However, the consistent dual pricing by some sectors of the market is creating issues. MGAs are continually looking at their policies and amending them to benefit the policyholder, they are adding additional services and classes of business and these are all system-led to cut down waste and duplication.

We are in a period of significant capital availability and many MGAs are looking to grow by acquisition, developing more lines of business or buying-in professional teams from other underwriting firms.

Many brokers are looking at their conflicts and seeking to build MGAs which will be separate from their broking arms, this does add competition to the MGA space, but it will be good news for the policyholder. Good quality MGAs will always prevail.

Q A

How can collaboration and partnership between MGAs and insurers be improved and streamlined?

They are being improved and streamlined now. By working in partnership and mutually driving change, both parties will succeed.

Insurers are custodians of capital whereas before they were pure owners of it, this change in the dynamic allows for greater collaboration.

Outsourcing operational activities and working with good quality MGAs, an insurer can make a better return on capital than using their own systems. But that does not mean it will all pass over, insurers are able to adapt, and they will work closely with MGAs to enter previously untapped areas and secure their own future.

Q A

What are the MGAA’s plans for 2019?

One of our main objectives is to build an educational pathway.

This will mean continuing to work with the Chartered Insurance Institute on their study books, helping to set and develop model answers on a range of topics such as P66 – Delegated Authority.

We’re continuing to develop specific educational tools designed to enhance the professionalism of the sector, which I’m hoping will lead to a new Chartered Status for delegated underwriters.

The Association actively lobbies on behalf of MGAs to ensure their voice is heard. We have worked with the Department of Transport on motor insurance and the discount rate. We sit on the HMRC & Treasury industry group on IPT, VAT and taxation.

With Brexit looming, we have engaged with regulators in Europe such as the European Insurance and Occupational Pensions Authority (Eiopa) and are working with lawyers from Holland, Belgium, Luxemburg and Germany to provide members with an insight into the opportunities and difficulties in opening up a trading business across Europe.

PETER STADDON is the Managing Director of the MGAA.

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INTERVIEW

Vehicle safety is a priority Modern Insurance spoke to Steve Plunkett, Volvo’s Body & Paint Development Manager, about vehicle safety and repair and what they have planned for the future as well as 2019.

Q A

How is Volvo looking to redefine vehicle safety and how are you using technology and data to do this?

About four years ago, Volvo released a statement that no one would be killed or seriously injured in a Volvo by 2020. At the time that seemed like a bold statement but we spent some time with the Accident and Investigation Team in Sweden and they assured us that we would be there, with us, at the time, being less than 6% away from achieving that. On the basis that 2020 wasn’t too far away then and is even closer now, we will be ready for that I have no doubt; we don’t tend to make statements like that unless we can make it happen and Volvo takes vehicle safety seriously.

The Accident and Investigation Team in Sweden operates across the region and they go out to accidents that involve Volvos and do their own investigation, so all that information is constantly going back to research, development and design teams to make sure that we keep building safer cars. Moving forward, Volvo is working towards a crash free feature, that is what we are after as a brand.

Q

As technology continues to advance, how can the talent of the future be developed and trained to suit the skills that this will demand?

A

As a vehicle manufacturer, we are always running courses at our training development centre in Daventry. We want to ensure that our retailers and approved bodyshops technicians, and in fact people from across all disciplines, are capable, confident and able to cope with the technology currently in the vehicles but also that they are ready for whatever technology is coming with the next new models. We need to make sure that we are not just up to speed but ahead of the game because that is what the technology demands.

Q A

What is the Volvo Cars Apprenticeship Programme and how will these benefit the industry?

We run Apprenticeship programmes across many disciplines.

We have taken on sixteen apprentices this year alone in body and paint, which is a record intake. It is an opportunity to support the bodyshops that support us we are helping them bring young people into the industry who will bring much needed youth and fresh blood into the industry, and in turn develop the required skills that are required.

Q A

What new technology is Volvo introducing to its brand and how will this improve customer experience?

It is fair to say that as a brand, Volvo is renowned for its continued innovation in safety and has been for many years.

Our founding fathers stated that safety was going to be at the forefront of everything that we do, then and in the future, and we have kept to our word. The objective is that Volvo will be moving towards full autonomy and we are quite confident that we will be ready by 2021.

Our safety systems, if you put them all together, are known as INITELLISAFE, which are collectively designed to protect the driver and occupants in the car. As a brand, part of our ethos is to ensure that our drivers and occupants are relaxed, comfortable and have maximum safety around them.

Q

How is the consumer’s relationship with their vehicle likely to change in the future, and how should vehicle manufactures and mobility solution providers respond to this?

A

As drivers, we rely on our eyes, in the future we will rely more on sound, colours and visuals. The car will become a different space and compartment, similar to a train carriage, where it will become a living space where you entertain, rest and sleep. One of the safety related features that Volvo is designing at the moment is a safety blanket. The safety blanket and full autonomy will be the most significant safety developments since 1959, which is when Volvo invented the three point seat belt – this seatbelt has saved over 1.3 million lives in that time.

We need to make sure that we are not just up to speed but ahead of the game because that is what the technology demands

Making sure we are training young people is vital and it is a responsibility – we take it very seriously at Volvo, and judging by the body shop network and retailer network, it is safe to say that all parties take it seriously.

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INTERVIEW

Our founding fathers stated that safety was going to be at the forefront of everything that we do, then and in the future, and we have kept to our word

Q A

Are autonomous vehicles likely to change driving behaviours?

Totally, 100%. We will be saving more lives because there will be less incidents and this is not just good for the occupants but it is good for the insurance industry as well. Currently Volvo are already reducing front to rear end collisions by up to to 38% there will still be accidents but it is certainly for the greater good because there will fundamentally less accidents and therefore less injuries and fatalities.

Q A

Is the relationship between insurers, bodyshops and OEMs continuing to improve? Is there still more that could be done?

There is still a huge amount that needs to be done. Since I joined Volvo in 2012, a lot of my own personal time has been taken up going around the industry doing safety talks. I thought there was a big opportunity to engage with work providers because in the past there has been quite a lot friction due to a lack of communication and understanding. That is my way of helping to break down some barriers but work providers are still looking to utilise their own networks!

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At Volvo we have three insurance companies, The Davies Group, Covéa and Verex, that are directly linked to our network (they deploy Volvo’s into the approved bodyshop network) because they understand that today’s vehicle technologies and safety systems are complex, technology in cars has leapfrogged tenfold in recent times – and they are very conscious of that. There is still a lot of work to be done and I wish that work providers would take a look at the bigger picture. To repair a Volvo in an approved bodyshop maybe a bit more costly as they are following the factory recommended repair processes!? But what price do you put on keeping occupants safe? At Volvo we are reducing overall claims and repair costs with all this amazing technology that we have in our cars. My phone is always on and my door is always open - I am always happy to engage so we will keep doing just that with interested parties.

The objective is that Volvo will be moving towards full autonomy and we are quite confident that we will be ready by 2021

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INTERVIEW

One of the biggest challenges this year has not just been around body repairs but there are lots misconceptions in the industry around ADAS

Q

It has been announced that every car that Volvo launches from 2019 will have an electric motor; how and why is Volvo placing electrification at the core of its future business?

A

It is important to highlight that at Volvo we don’t just focus on safety but protecting the environment is also key to our brand strategy. We have already progressed well with electronic vehicles as we have some hybrid vehicles already in our range. By 2019 all combustion engines will be supplemented in some way by electric compulsion and I believe we are the first vehicle manufacturer that has really made this commitment. Between 2019 and 2021 there will be five pure, new electronic models. By 2025, Volvo will have one million electric cars, which represents something like 50% of global sales.

Q A

What were your aims for 2018, and have you achieved them?

My core aim and objective as Body and Paint Development Manager, is to ensure that an increased number of Volvo customers have their cars repaired safely in the Volvo approved bodyshop network. We want to continue to add value to the customer journey, ownership experience and also to the approved bodyshop network as they continue to invest in being Volvo approved and it is important that they are getting a return on investment. We have had a great year and made some fantastic progress and we will make sure that this progress continues into 2019 and beyond with their support.

Q A

What have been the main talking points for Volvo this year and what does 2019 hold?

The main talking points for 2018 are the same as when I started in 2012, as I previously highlighted with work providers/insurers not changing working practices and behaviours despite the tsunami of new technologies making cars more complex to repair in the after-market! One of the biggest challenges this year has not just been around body repairs but there are lots misconceptions in the industry around ADAS; what is the correct way to ensure that ADAS systems are reinstated following a windscreen replacement?

At Volvo our windscreen replacement process is reliant on Volvo genuine windscreens being replaced with only Volvo genuine glass and that they are safely recalibrated using our VIDA system. We have just released an ADAS statement saying that only Volvo genuine windscreens should be used and that it should only be recalibrated at Volvo retailers or at a Volvo approved bodyshop. By not doing this, you are effectively turning off 28% of the vehicle’s safety system. It’s time that more people took note of what the vehicle manufacturer recommends. Millions is spent in researching and designing the vehicles only for the quality to be compromised in the aftermarket!

Steve Plunkett Steve lives in North Norfolk and is married with two children. A season ticket holder at Carrow Road, the home of his beloved Norwich City FC, he likes to spend time with his family, and his perfect weekend would see the Canaries get three points on a Saturday afternoon and then see him spend a sunny Sunday relaxing on the North Norfolk coast.

A keen runner, he has run the London Marathon twice and numerous long distance races and half marathons. This included running the 2011 Norwich half marathon blindfolded with a fellow running colleague acting as a guide runner to help to raise awareness for disadvantaged sports men and women, as well as some much needed funds for the the local blind charity.

He also still enjoys playing football for a local veteran’s team.

He has worked in the automotive industry now for thirty seven years and started repairing cars in his Father’s village garage at the age of fifteen in his school holidays.

A time served paint sprayer (City and Guilds), he went onto work for BASF in both a technical and sales capacity in the late eighties / early nineties. During his career he has also worked as a Trade Parts Representative, Business Development Manager and then as a Bodyshop Manager at a Vauxhall main Dealer. He was then Bodyshop Manager at the original East Bilney Coachworks site and also worked in the same capacity for Nationwide.

During the past fifteen years he has worked in the Vehicle Manufacturer arena, initially for Carter and Carter for ten years, spending seven years working on the Toyota Body and Paint Programme as an area manager and then two years running the programme. A further two years were spent as a Commercial Development Manager with Jaguar Land Rover followed by a spell as Programme Manager with Peugeot Cars.

Prior to starting at Volvo in 2012, he worked for Verex Group as a Business Development Manager, during which time he worked with thirteen Vehicle Manufacturers helping to set up repairer networks and developing VM’s own brand car Insurance and Accident Aftercare programmes.

ADAS and body repairs going back to brand in the aftermarket will continue to be high on the agenda personally for me in 2019 and we will continue to make more progress.

STEVE PLUNKETT is the Body and Paint Development Manager at Volvo.

16 Modern Insurance

Issue 35

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EDITORIAL BOARD

TIMES HAVE CHANGED With a skills shortage within the body shop repair industry on the horizon, what can the industry do to address this building concern? s my early years were spent helping a father who had completed a seven year apprenticeship in ‘motor vehicle refinishing’, and often did ‘jobs on the side’, this is a subject quite dear to my heart. That statement in itself shows how much times have changed, a child helping prepare a vehicle to be sprayed at the bottom of our garden contrasts with the health and safety focus we have now (maybe I shouldn’t have been so taken by the smell of cellulose thinners!), as well as the kit, dedicated temperature controlled spray-booths, baking to finish multilayered applications, the world has moved on.

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The industry is being impacted twice over, not only are we seeing dwindling numbers of independent repairers and apprentices learning their art (even if that doesn’t take seven years now!), but we are also seeing technology transforming the way cars are constructed, and how they operate. The Motor Repair shop of the future will potentially have as many software engineers and IT specialists as they do have mechanics and refinishers.

Now some of this I do see as exciting and as an opportunity.

Yes, we have possibly seen a drop off in interest in things motor mechanical as it’s no longer as easy to ‘mess around’ and learn on your own car in the way you previously could, but technology is something young people are interested in, and if we can interest them in a career that combines both, then I do think we are on to a winner. It will take some selling however, and we first have to realise that there won’t be that flow of people that have risen from the spare time hobbyist, and need to look elsewhere to recruit.

The other problem is that investment in the kit repairers need going forward, and the extensive training that will be needed, all costs money, and money many repairers would argue that they don’t have.

There are huge debates on social media as to what is a ‘Fair Hourly Rate’, and to a small independent firm what insurers often offer might seem an insult. The converse however is that the accounts of the larger firms and networks actually look quite healthy!

So we have a dilemma, do we insurers pay more to ensure that independent repairers can afford to invest and train, or do we continue to exercise those economies of scale, enabling us to pass on those savings to customers in what remains an incredibly competitive motor insurance market?

HOW IS TECHNOLOGY CAUSING COMPETITION IN THE INDUSTRY TO CHANGE? T

echnology should be seen as an enabler not a goal in itself, it is clear that technology is becoming more and more advanced almost by the day.

The technology within the vehicles is becoming far more advanced and this trend will only continue, the ability to keep up to date with this is key for all parties within the industry, ourselves as a modern cloud based technology company has to work closely with our partners to ensure that we are as up to date with data in line with modern day vehicles, thus supporting the repair process with not only correct up to date and relevant information, but also some modern tools that can easily support the development changes within technology.

As a motor claims industry it is therefore also important that the repair networks remain up to date with the relevant information with regards to the technology within the vehicles, therefore needing to be able to recognise and understand it, ensuring that the relevant and necessary information is readily available, but also have the correct technology to then be able to efficiently and effectively complete the repair process.

Technology companies like ourselves are in favour of competition and actively support relevant integrations to allow the exchange of better and more up to date information for all of the stakeholders within the claims process, including the customer themselves, clearly this is important.

It’s the responsibility of technology companies to set the correct secure standards to ensure that those integrations and data exchanges will support fair competition and allow for flexibility in terms of customer, repairer and insurer choice. Being in the 21st century, customers are now expecting instant updates of the relevant information so it is important that any technology company is able to update the data in real time.

RICHARD TAYLOR, Sales Director and UK Business Director, GT Motive.

My view is it has to be a bit of both, working with Thatcham to highlight what skills and technology is needed, yes probably paying a bit more than some insurers are currently, but either way, working with the repair industry to ensure we do have the individuals with skills and access to technology needed to look after our customers’ vehicles going forward.

DAVID WILLIAMS, Technical Director, AXA Insurance.

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Modern Insurance 19

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EDITORIAL BOARD

THE RISE OF RENEWABLES ovember 2018 marked the tenth anniversary of the Climate Change Act 2008; legislation which formalises the UK’s approach to tackling this topic. It’s arguably more relevant now than in 2008, given the Renewable Energy Directive (RED) targets for the European Union. This Directive requires the EU to fulfil at least 20% of its total energy needs through renewable sources by 2020, with the UK’s target currently set at 15%.

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The burning of fossil fuels has been blamed for contributing to global warming. With a limited supply of fossil fuels remaining, renewable energy could be a game-changer in both combatting climate change and providing alternative power sources.

Renewable energy sources include solar, geothermal, wind, hydro and various forms of bioenergy. Given the UK’s propensity for windy weather, it’s perhaps unsurprising that onshore and offshore wind makes up the largest share of the country’s renewable energy at 13.8%. This is followed by bioenergy (10.2%), solar energy (4.2%) and hydropower (1.8%).1 Renewable energy installations require regular inspection and maintenance. Performing maintenance on wind turbines can be challenging, given their generally remote location and need for an engineer to work at height, often in squally weather; this means that remote condition monitoring systems are essential to continue operations. Biomass systems, comprising heavy-duty equipment such as steam boilers and furnaces, are also subject to health and safety law, given the potential for accident. Various insurance covers exist for renewable power installations, including core construction and operational policies, together with specific insurances such as lack of wind or sun cover.

With nearly two thirds of the world’s end-use of electricity consumed by the commercial and industrial sectors2, corporate organisations face mounting pressures to adopt and promote renewable energy. The falling price of solar and wind can offer an economic advantage to companies in the form of lower energy bills; and the availability and accessibility of renewables can translate to fewer power outages and minimised business interruption.

The renewable energy market remains one of the UK’s fastest growing industries, with an estimated market value of £15.9bn.

The industry recently expressed disappointment following the Autumn Budget, at the lack of progress on requests for fairer tax treatment around the uptake of solar and battery storage.

However, with a strong focus on climate change and no slackening of the challenging EU targets, the trend for renewables is surely set to rise.

IMPROVING THE CLAIMS JOURNEY ow can we make the claims journey better for our customers? For me this starts before the product is even sold. At Coplus, we consider how we are supporting the claimant right up front, at the product design stage. Of course this is the approach that now aligns with the new product governance requirements of the Insurance Distribution Directive.

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In product governance we must make certain the insurance meets the requirements of the target audience and that clearly requires understanding of how the insurance will be utilised and the expectations of customers at the point of claim. A high level of indemnity could be seen as a way to ‘get customer’s attention’ but if the analysis of the target market and claims experience shows that the customers won’t benefit from the additional cover then it’s of no value, or even worse, could be costing the customer unnecessarily.

In addition to the design of the product, learning from the claims journey itself is paramount in ensuring the claims team are delivering in line with expectations. It is also critical in assessing product suitability and in identifying new product development opportunities.

The claims team amass a vast amount of data on each claim. The systematic analysis and root cause investigation of issues that may be complaints or indicators of dissatisfaction give us essential insights into process failings as well as highlighting where there is potential for innovation. The underlying issues revealed may present a step change in service.

We’ve done just that recently to improve the claims journey on a landlord legal product in partnership with one of our broker customers. When claims data showed a pattern of issues with letting agents we reviewed the claims journey and developed a new approach that supported the agents in a different way.

This led to an enhanced service that now gives the letting agents assistance with their legal obligations and mitigates problems that would occur in the future if they don’t fully understand or what they need to do or if they miss deadlines.

This enhanced service is a great example of how insight can be used to create a better claims experience and has been driven out of observing what has happened but also understanding the purpose of the insurance product itself.

JASON TRIPP, Managing Director, Coplus.

STEVE KELLY, Engineering Underwriting Account Manager, Allianz Insurance plc.

1. Source: www.greenmatch.co.uk 2018 2. http://www.irena.org/publications/2018/May/Corporate-Sourcing-of-Renewable-Energy

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Modern Insurance 21

EDITORIAL BOARD

WE CAN DO MORE With a skills shortage within the body shop repair industry on the horizon, what can the industry do to address this building concern? f you take notice of all the latest news reports around vehicle technology, you may be forgiven for thinking that the body shop repair industry is now a world of fully automated processes with robots on every corner making sure that no human being ever has to touch your vehicle. Whilst it is fantastic to witness all of the new innovations starting to revolutionise the tried and tested repair methodologies, this is still very much a highly skilled and valued industry for repair technicians with highly specialist skills.

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The argument for investing in an even better skilled workforce for the future is compelling, now given the emergence of electric and autonomous vehicles and therefore the need to maintain both the expertise around repair and also the knowledge around new technologies is critical to support future generations. There are many examples of the impacts on the insurance industry created by an ever increasing shortfall in availability of skilled body shop professionals, not least on costs to repair through higher wages to retain people and also on repair cycle times due to lack of supply to meet the changing and growing requirements of damaged vehicles.

In the motorcycle world, we invest heavily through technical and manufacturer supported training in a team of highly specialised technicians who pride themselves on delivering the very best quality to their customers. Making their jobs more about interacting with the biker community and igniting their passion for biking helps us to attract new talent but it hardly touches the sides compared to the scale of the skills gap across the whole sector.

The motor repair industry itself works extremely hard to create a positive image and exciting careers, but surely the insurance industry can do more to ensure the long term success of this sector and to encourage the next generation of panel beaters, painters, estimators and mechanics to choose this path. What about a world where the insurers actively sponsor their partner repairers to recruit new trainees, provide access to manufacturer training and open their doors to educate new recruits to understand the insurance claims process?

What return on investment number would that deliver over the next ten years? Not to mention protecting the long term future of an industry, which is changing fast with technology but nevertheless will always need the very best, highly skilled people.

RISK AND TRUST istorically, in times of transition, trust has been both built and eroded. Traditional forms of trust can evolve as new mechanisms are built. Much of this has been caused by changes in commercial practice and technological advancement.

We may now be entering such a phase of dramatic change brought about by new technologies.

H

The future roles and rates of adoption of technology are of course unknown but there are high levels of expectation around blockchain, for example, with early stage adoption reported in the marine insurance market. Blockchain has been described as a trust machine. There is considerable speculation that many existing functions could be performed on blockchain across the industry spectrum running from personal insurance to complex reinsurance placements. Currently, there is a low level of understanding of blockchain so more information, education and trust building will be required.

A changing risk landscape brings complexity and ambiguity to risk assessment. Technological advances are affecting all areas of business. Cyber risks are a prominent example. New questions are being posed and new sources of data being sought to assess and quantify the risks. The nature of the risk is changing. If you cannot predict you cannot prepare. Data analytics and AI are becoming more important risk management and assessment tools.

Some insurers may have difficulty assessing cyber risks but there is strong market demand. A step by step approach can build trust in the data and the accuracy of the risk assessment.

Mutual trust and collective interest are embedded in the PI market to a greater degree, perhaps than in other classes of insurance.

Trust in the professions is vital as the world becomes more complex and we see the effects of disruptive technologies. Trust in auditors and their collective reputation is very much on public and corporate agendas. This is a direct line from risk to trust. There is the important question of recourse if trust proves to be misplaced.

PI insurance therefore has a vital societal role to play.

Today’s world offers a paradox between an increasing degree of interconnections and yet a fracturing of international cooperation and trust that affects major risk issues, such as cyber security and climate change. Trust allows risk taking to take place and there is therefore a collective interest in building trust for the insurance industry.

KEITH TRACEY, Managing Director, Aon Risk Solutions.

PAUL TAYLOR, Managing Director, Plantec Assist.

Issue 35

Modern Insurance 23

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EDITORIAL BOARD

IMPROVING OUTCOMES How can we better support claimants through their claims journey? claim is an extension of the journey the customer started when they incepted their relationship with the firm, and in a market that works well, poor experiences in claims’ processes will inevitably hit customer acquisition and retention. Conversely, good claims’ processes drive new customer acquisition; if there is any doubt, look at the current marketing strategy of many major insurers.

A

Therefore the starting points for improving the claims journey is the product design and sales processes. If the marketing or sales of the product is such that the customer has a different perception of the policy cover than it actually provides, then no matter how good the claims journey the customer outcomes will always be poor. Use of concise and intelligible policy wording, supported by clear explanatory documentation enable customers to understand the policy coverage and the claims process, and help prevent false expectations.

In order to deliver the desired customer experience, the focus has to be on outcome not process, and culture plays a big part. A focus on improving accessibility and removing barriers is a good start, but actually improving outcomes requires solid and reliable analysis of claims and the claims’ process. That data analysis has to be in real-time and informing every aspect of the business and product processes to which it relates. Behavioural economics plays a big part and the way customers respond to firm activity will be different depending upon the profile of the customer. That sounds like an obvious statement to make but there are many firms that fail to align customer communications and processes, including the use of technology, to the customer demographic on a product by product basis.

One of the best examples I’ve seen lately enabled the customer to retain all of their policy documentation in an app where there was also access to a knowledge bank, including FAQs on claimable events, access to a chat facility for all purposes, and the entire claims process in a simple to use customer interface. However, that type of accessibility and service does not work for every customer, and therein lies the most important point – it’s about understanding customer needs, which starts at the point of product design.

ROB COOPER, Co-Founder and Executive Director, ME Group.

THE REGULATION OF ADAS RECALIBRATION

o we have to wait until someone dies before Advanced Driver Assistance Systems (ADAS) recalibration is regulated? This is the question I put to you after seeing a recent LinkedIn post from Volvo Body & Paint Development Manager, Steve Plunkett, in which he talks of overhearing a wellknown ADAS conference attendee saying, “well nobody has been killed yet!”.

This is a disgraceful demonstration of what I’ve found to be true in the last couple of years when it comes to ADAS – there are some people waiting for a serious incident to occur before they’ll act on ensuring safe recalibration practices after a windscreen replacement.

An acquaintance who shared his experience on trying to get his car recalibrated correctly a few weeks ago actually said he was told by one particular rival that “some dealers use cardboard and stepladders for recalibration” in a bid to get him to accept their preferred method, using the aftermarket. This company was the preferred supplier for his insurer.

He was, like me, informed and could therefore make a considered choice on his repair – preferring to get it done by the dealer.

However, the majority of our customers don’t understand the complicated workings of their vehicle and the need for carefully controlled ADAS recalibration following a windscreen replacement. They are trusting us to know what we’re doing and to return their vehicles to them functioning exactly as they did when they left the dealership.

Numerous ADAS-related conversations recently on LinkedIn consistently come back to the same point – customers are being told misleading and frankly, dangerous information when it comes to recalibration. Industry peers have joined such discussions, voicing opinions on the best ‘solution’.

Essentially, we’re all discussing our opinions but when are we going to work together to make sure customers are safe? We should be focussing on what needs to be done to regulate cowboy aspects of repair before someone dies. I write this with the intention of stoking debate.

Insurers, brokers, suppliers and vehicle manufacturers must work harder to put our customers first. We have a duty of care and an opportunity to act before someone is killed!

D

RUPERT ARMITAGE, Managing Director, Auto Windscreens.

Issue 35

Modern Insurance 25

EDITORIAL BOARD

HOW CAN WE BETTER SUPPORT CLAIMANTS THROUGH THEIR CLAIMS JOURNEY? laimants’ expectations of their claims journey are constantly evolving, and the sector must continually improve too. Processes should follow the claimant, rather than the other way around. Most claimants expect their claims journey to embrace the rapid evolution of technological change, and yet still wish to feel that they are receiving a personal service.

They generally wish to discuss their claim in person in a single phone call, but then quickly move to managing their claim online, being able to access hire, repair and legal services in that single call, check progress, receive updates and upload documents, potentially through multiple channels. We need to use the right technology whenever and however the customer chooses to interact with us.

C

Technology will certainly make the claims process more efficient in the future. Where appropriate, customer self-registration of claims supported by Chatbot/live chat at any time of the day; voice analysis for fraud prevention as well as automated fraud checking; speech recognition for identification and DPA checks; FNOL systems with the ability to download telematics data/dashcam footage; metadata used to identify incident information such as GPS coordinates; image recognition for liability decision, vehicle roadworthiness and extent of damage; online video call medical assessment, rehabilitation and GP reporting timely information producing real time reporting.

Technological solutions must though be balanced with the claimant’s needs at what could be a difficult time. A significant proportion of claimants remain digitally excluded, particularly older and vulnerable people, and the process must accommodate them. Claimants need to be happy that they are receiving a tailored service, helping them get back to normality and cause the least amount of further disruption, particularly when they have been injured.

The new claims landscape following the whiplash reforms must reflect this. There will be challenges ahead as insurers face both dealing with third party litigants in person and claims management companies, but also in assisting their own non-fault customers – who will need assistance in navigating what for many will remain a baffling system. These are enormous challenges to overcome and only time will tell if they can be. We need to get them right, but it will require careful planning, detailed knowledge of the claims journey and must not be unduly rushed to be rolled-out for them to have any positive impact.

DONNA SCULLY, Director, Carpenters Group.

Issue 35

NEW OPPORTUNITIES What are the benefits of new start-ups and/or insurance disruptors collaborating and building a relationship with already established insurers? nsurers should see insurtech as an opportunity not a threat.

Indeed, collaboration between start-ups and insurers is of paramount importance and represents one of the solid pillars of the future of the industry. In the exploration of new and innovative technologies, both start-ups and insurers can bring new learnings and new ways of thinking for each others mutual benefit.

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In order for an insurer and start-up relationship to succeed, it must be recognised that customer experience is as important as it’s ever been. The insurance industry, as is true with many other industries, needs to find new ways of meaningfully engaging customers with a blend of digital products and services to stay relevant. The need for insurance protection isn’t going away so insurtech can facilitate new opportunities to create different experiences that simply weren’t possible before. Therefore, bringing together start-ups and insurers to share ideas is of utmost importance as such collaboration will only help influence the future of insurtech for the better.

Insurers should also dedicate themselves to further industry collaboration at every level – they should establish relationships with organisations like Startupbootcamp, Plug and Play, and SOSA that have extensive networks within start-up communities all around the world.

Whilst there is certainly a great demand for technology in insurance, especially from large insurance companies with a global reach, the benefits must be understood first and applied in the right way.

There are a vast number of insurtech firms that exist to provide alternatives to the technology components typically provided by large corporate technology suppliers and can be integral to supporting innovative offerings by insurers. Likewise, it is also important to note that insurtech doesn’t only provide bolt on ‘apps’ to the front end - there are a wide range of emerging technologies that can help businesses at all points across the value chain.

Whilst insurtech is absolutely opening up new opportunities for the industry it also creates opportunities to deliver new services and products to customers and drive internal efficiencies. However, organisations have to embrace change, sometimes disrupting from the inside - it can be challenging but ultimately a rewarding journey.

Finally, with insurer/start-up collaboration firmly in mind, Zurich recently launched the Zurich Innovation World Championship. This will provide a platform for inspiring start-ups to showcase transformative technologies in our key business areas of mobility, smart homes and buildings, digital health and financial planning. This represents a formal expression of our ambition to facilitate greater working relationships between established insurers and the start-up community.

MARK BUDD, UK Head of Innovation, Zurich.

Modern Insurance 27

EDITORIAL BOARD

HOW ARE YOU PREPARING FOR THE EVENTUALITIES THAT BREXIT MAY BRING? reparing for the eventualities that Brexit may bring has been challenging for everyone. Despite the immanency of a deal, there is still a lot of uncertainty as to what the outcomes will be, and the eventual relationship between the UK and EU.

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In financial services, this is equally as pronounced. In preparation to face the impact many firms have been planning and executing their Brexit contingency plans. Some have chosen to open subsidiary or new companies in the European Union (and the wider European Economic Area) in order to have passporting access across the EU27.

Presently there is a lack of clarity around the regulations that will govern the concepts of passporting and cross-border relationships post-Brexit with many firms calling for the government to consider the needs of the insurance industry in its plans for leaving the EU and particularly in the event of a ‘no deal’ following Brexit negotiations.

Leaving the EU does not spell the end of working together. The UK will still need to work with the EU and vice-versa. A restructuring of the current arrangements will be necessary but there are existing models (notably Switzerland and Norway), which support prospering insurance industries despite not being part of the EU. RegTech will play a vital role in helping firms manage the eventualities of Brexit. Whilst UK firms will become relieved from the heavy regulations that are enforced by the EU, creating a new set of UK regulations will come with its own challenges.

The right RegTech solutions can provide a cost-effective flexible mechanism for compliant B2B trade regardless of territory and regulatory jurisdiction.

In this period of uncertainty, it is difficult to predict if Brexit will negatively impact the UK insurance sector. The UK will continue to trade in the EU and also look to scale into growing markets, such as China, that have proved difficult as EU members to date.

Uncertain, yes, but without opportunity, no.

Businesses that recognise the value of RegTech will only benefit from its adoption. Global insurance distribution is changing, and the maintenance of competent, effective governance can only be delivered with the assistance of competent, effective technologies.

PAUL TASKER, Managing Director, REG UK.

Issue 35

THE TELEMATICS OPPORTUNITY As the fight against fraud continues, how will telematics data play a part in combatting it? n motor insurance it’s becoming possible to do more to prevent collisions, through driver coaching and communication, and by linking behaviour with an incentive to change (with premium pricing through telematics).

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But when collisions occur, there are many new opportunities coming for proactive customer care, process improvements and better data for better decisions (using evidence-based data to resolve legal disputes and eliminate fraud). It’s becoming increasingly possible to bring new data sources into claims and the FNOL process, for increasing service speed and customer satisfaction, for example, with automation in assessing vehicle repair costs, impact information from accelerometer data, the precise location and other new data related to the incident forensics.

There’s already been several high-profile fraud cases solved using telematics data. This is an area where telematics capabilities have begun going right to the heart of motor insurance policy administration. It’s an area where insurers have only just begun to scratch the surface in terms of the potential savings from productivity gains and reducing claims leakage. The transformation is not made easier by the fact that the typical telematics business is still small in relation to its much bigger brother in the typical insurance company, the motor business, which is the place where the really big financial benefits, and the safety benefits for wider society, are potentially to be found.

With many smaller claim incidents, often the insurer doesn’t get informed immediately and therefore becomes exposed to many additional costs or potentially fraudulent actions. The potential to call the customer immediately after an impact makes it possible to gather vital information supplementing the telematics impact data – with a range of actions from alerting emergency services to just asking the customer “is everything okay?” or “how many people were in the vehicle?”

Simple questions really help at the trigger point and can give guidance to the insurer, helping to avoid costs related to nonapproved repair contractors, legal, car hire or other costs.

In summary, telematics can enable a change process in claims and it can eliminate the most costly part of fraud, preventing claims getting to litigation – and particularly whiplash claims – by fair exchange of data between insurance companies and medical experts for example. But the telematics opportunity is way more important than just fraud, which by itself is not worth the telematics investment.

TREVOR LLOYD-JONES, Senior Marketing Manager, Insurance, LexisNexis Risk Solutions.

Modern Insurance 29

Working Together Nationwide Assistance Group works with insurance companies to mitigate the cost of a claim by providing a complete collision recovery management service.Our high level of standards means that we know the importance of capturing the right details when completing FNOL’s through to deploying the correct recovery vehicle.We do not stop there, being your eyes on scene means we can advise if the vehicle should be taken to salvage rather than repair, reducing movement costs. Where a vehicle is in storage we ensure that we deliver that vehicle to a repairers or salvage company as quickly as possible to mitigate the storage costs and save you money.

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05/12/2018 10:56

EDITORIAL BOARD

TRAINING EXCELLENCE How can we better support claimants through their claims journey? s a specialist credit hire company built and shaped around customer service, supporting the policyholder is at the forefront of how we operate at EDAM Group. It’s the central premise that runs through everything we do and we’re proud to provide exemplary assistance to customers from our very first communication.

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As a provider of credit hire services to those involved in road traffic accidents, we know that empathy, understanding and clear communication are paramount to the policyholder. Offering a straightforward process from accident to solution is only half of what we do. Our service is about keeping people mobile so they are not inconvenienced while their vehicle is being repaired. A seamless customer journey from start to finish is our priority.

On a practical level, this means doing all we can at every stage to make the customer experience a reassuring and positive one.

Not always the easiest task in our business, but it’s where our core strength lies, ensuring claimants are happy with our service and helping us stand out in the sector.

One of the foundations of this is the EDAM Group Claims Academy – our centre for training excellence, from which our customer service staff must graduate before working with customers directly. The three month in-house programme coaches new starters to understand the claims process from end to end, but more importantly to understand and support the customer during a potentially stressful and emotional period.

We’ve witnessed our Net Promotor Score increase steadily over the last couple of years. Concrete evidence that we are supporting policyholders through outstanding customer service better than ever before.

As a people made business, our focus is not only on the first class delivery of non-fault post-accident services but also timely, empathetic and supportive assistance at an often emotional and stressful time.

With that in place, the claims process has been streamlined to run efficiently, as you would expect from the market leading credit hire company, meaning minimum disruption to the customer, coupled with maximum clear and considerate communication.

WHAT’S HOLDING BLOCKCHAIN BACK? ne of the most exciting developments for Blockchain within the insurance sector are the opportunities for creating smart contracts. Without any human action, a smart contract can implement the terms of a pre-arranged agreement, using selfexecuting code. They can be used to support Parametric Insurance claims, where instant pay-outs are given based on pre-defined actions or triggers. While historically, smart contracts were difficult to create due to disagreements over data or information, Blockchain has made this a moot point. As data embedded on a Blockchain is immutable, actions can self-execute, allowing a contract to change from one state to another. As a Blockchain contract is decentralised, there is no central managing authority.

The most famous use case for smart contracts is Fizzy, AXA’s fully automated flight delay insurance policy. Customers can receive their compensation in near real-time, with no need for customer action or claims handlers. No paperwork and no human input, coupled with the reliance on Blockchain technology creates a secure solution that eliminates fraud, improves the process for the customer, and reduces costs and overheads for the insurance company.

Despite the success of Fizzy, it’s clear that this use case is limited in terms of widespread adoption. This claim event is a very simple one, reliant only on one set of clear third party data held by the airline. As soon as other streams of data become necessary, in particular those not verified by Blockchain, the issues of indemnity, liability, quantum, supply chain solutions and fraud come back to the fore. In short, in order for Blockchain to truly take off – everyone needs to be using Blockchain.

Many sceptics wonder if that kind of widespread adoption is possible. There is no standard in terms of coding for building Blockchain, so software and smart contracts may still be open to vulnerabilities and discrepancies. The technology is underregulated, and the law hasn’t caught up yet on creating clear guidelines relating to cryptocurrency.

Finally, the most successful technological leaps need to have ease of use at their core, and we are far away from any kind of ‘plug and play’ infrastructure for Blockchain. Without answers for these issues – Blockchain may never make it to mass adoption.

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MICHAEL LEWIS, CEO, Claim Technology Ltd.

At EDAM Group, our people are what make us and we’re rightly as confident in their capabilities as we are in our fast key to key time and high quality service offering. Both serve to strengthen an exceptional customer journey and to set us apart from others in the industry.

MARC LAFFERTY, Chief Revenue Officer, EDAM Group.

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Modern Insurance 31

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EDITORIAL BOARD

THE CHANGING CHANGING SHAPE OF THE THE FACE OF BODYSHOP REPAIR INDUSTRY BUSINESS he bodyshop repair industry has been through a period of significant pressure and change in recent years resulting in capacity constraints, shifts in supply and demand and a rising skills shortage. These market dynamics impact upon vehicle repair costs, making it increasingly difficult for insurers to control the total cost of claims. Counteracting these market changes requires significant industry-wide investment and expertise.

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As manufacturer technology becomes more advanced, particularly around safety features, and vehicle body materials become lighter yet stronger, repair methodologies and quality standards are increasingly complex. The investment in training and specialist equipment required is higher than ever.

The traditional view of repairers as ‘panel-beaters’ is long gone, replaced by highly-trained vehicle technicians capable of repairing today’s modern technology to an extremely high standard, commanding higher salaries as a result. Attracting and retaining skilled staff is a huge challenge, with fewer people entering the industry and a distinct lack of training available.

Significant consolidation over the last ten years has seen larger repairers acquiring smaller operators, increasing capacity and centralising administrative functions to achieve economies of scale. Some motor insurers now struggle to provide true national coverage for all vehicle types.

The sustainability of the bodyshop repair network is a fundamental requirement within the motor insurance arena and businesses must play their part. FMG is evolving to protect the future of high quality and sustainable vehicle repair supply across the UK, investing significant time, resource and expertise in bodyshop repairer relationships.

By establishing true business partnerships with our repairer network, we’re able to provide a range of repair solutions including SMART, mobile and express one-day repairs in addition to the traditional bodyshop delivery of structural, aluminium and specialist/commercial repair.

How is technology causing competition in the industry to change?

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e have seen the rise of analytics across the insurance industry, indeed the personal lines market has been the centre of an ‘analytics arms race’ for many years.

As Insurers are adopting more flexible architecture and moving from the concept of one policy admin platform to connected specialist solutions, it is possible to deploy these analytics across the value chain in real time. An interesting area for us is that commercial insurers have been developing more sophisticated algorithms for pricing, underwriting, routing, and distribution decisions. However, there is often an assumption that the brokers will always be real people. It’s exciting to now see brokers beginning to build trading models automating renewal and quote acceptance. It will not be long before insurers predictive models will be pitted against broker trading models. The face of competition will certainly change as this begins to happen.

Automated actors, bots and trading algorithms will encapsulate everyday trading rules, risk appetites and compliance codes.

Ironically this could lead to greater transparency as outliers can be easily monitored. Tech will continue to change the face of commercial business, with more intelligent automation and intervention, and the nature of underwriting and account management will need to adapt. However, I am a firm advocate of a simple rule - people do business with people they like, respect and trust - so beyond the day to day trading, the tech will need to support the people to solve client problems and develop relationships.

DAVID OVENDEN, Global Director, Pricing Product Claims and Underwriting, Willis Towers Watson.

Our significant investment in market-leading technology helps to reduce mutual administration costs of processing claims.

Establishing direct links to repairers through CAPS, ClaimWatch, AudaInvoice and bodyshops’ own communication systems enhances real-time communication whilst reducing manual touchpoints and traditionally lengthy transactional processes, enabling bodyshops to become more operationally efficient.

This holistic integration demonstrates our commitment to our repair partners whilst also ensuring we proactively manage our policyholder expectations by providing continual updates throughout the repair process, contributing to reduce repair downtime and streamlining the overall claims journey.

ANDREW CHANDLER, Head of Sales and Marketing, FMG.

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Modern Insurance 33

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Intelligent intervention and automation The Radar suite can run a range of operational models for routing, prioritisation, risk evaluation and scoring, all to help ensure the underwriters get to see the risks they have a best chance of winning.

To find out how you can take advantage of sophisticated analytics across the commercial value chain, contact softwaresolutions@willistowerswatson.com

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EDITORIAL BOARD

“HOW CAN WE BETTER SUPPORT CLAIMANTS THROUGH THEIR CLAIM JOURNEY?” We should be the adaptable vessel that navigates the client throughout the lifetime of their journey.

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lients have certain expectations from legal professionals which they take for granted; reliability, professionalism and integrity. We are expected to provide this; it is a given.

As a result, the question is how can we better support our clients through these expectations? We contact them regularly and when we say we will, we are on hand to answer their calls and we provide clear concise advice which enables clients to make informed decisions at the correct time. We progress and conclude their case in a timely and efficient manner because we all live busy lives; sometimes the slightest requests or demands can turn into larger inconveniences. So, flexibility is the primary consideration in order to ensure this support.

But, how else can we offer the service required by the client?

Well, options throughout the claim journey are crucial. How do customers prefer to be contacted? At what time? Can we give them access to their claim 24/7? We need to allow clients the feeling of control, while providing information with ease, at their behest, at any time. If this is provided, we must then ensure it is acknowledged. Clients appreciate, and expect, technological advances, but require the assurance that the interaction has been successful.

Technology is evolving at pace but, at times, a reassuring, professional voice outprices sophisticated hardware. Sometimes people don’t have an email address, or internet access isn’t available; we cannot forget this. We need to be able to support all of our clients, regardless of circumstances.

The claimant’s journey will be better supported by a contented workforce. If the legal professional with responsibility for the claim is thriving in their workplace, with the correct caseloads, support and supervision, then they can answer the client’s call, deal with enquires in a timely fashion and embrace changes implemented by their employers. Too many times in this industry, phone calls are not answered or returned (causing significant delays) due to pressures placed on the professional. A balance is a must to provide an effective client service. This is achievable at no cost to an employer and yet with great satisfaction to the client.

CLINT MILNES, Global Director, IT and Change, Winns Solicitors.

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JOIN THE REVOLUTION The debate continues as it is predicted that jobs could be at risk from robots and AI, what impact do you foresee this technology having on the industry? here is no doubt that certain jobs are at risk from technology but this is nothing new. Candlemakers were ousted by the invention of electricity. Everything from biscuits to cars are now built in factories, predominately by ‘robots’ or at least machines programmed to assemble.

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So many jobs that our parents enjoyed simply don’t exist today.

Is this a bad thing though? Would we give up email to keep fax machine makers in a job? We are simply evolving as a human race, albeit at an exponentially accelerating rate.

Answering this question is not a case of having foresight; the technology is in action today. For example, despite a steadily increasing work load, due to automated software, Laird have halved the number of staff involved in one department alone.

We are working with AI to improve this much further, allowing us to handle greater volumes, with increased accuracy and faster turnaround times. We’re even researching autonomous vehicle inspections.

We’ve seen solicitors using AI or machine learning to reduce up to 80% of admin tasks. Insurers are realising the benefits of the Internet of Things (IoT) to assist with usage-based pricing structures, claim flow processes (including increased fraud detection) and even chat-bots to provide a 24/7 consistent customer experience.

There is a diminishing need for the more traditional and administrative roles, those that can be automated, or replaced by machine learning/AI. However, this has given rise to another huge problem insofar as we are struggling to find talent to build & manage our AI. This starts in our schools. Traditional subjects like math, English and geography etc., haven’t changed much in years in terms of content and delivery. ICT is moving so fast that by the time a subject goes from idea to classroom it is already out of date. This is why specialist hubs have grown through the world; think San Fran, Tel Aviv, Bangalore, Singapore; hotspots encouraging their workforces to focus on tech.

At the cusp of the forth industrial revolution, traditional jobs have already started to fall, yet by contrast there is an increasing necessity for a new generation of tech workers. We must choose to join the revolution by focusing on emerging skills requirements or risk being left behind by evolution.

NIK ELLIS, Managing Director, Laird Assessors.

Modern Insurance 35

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FEATURES

Sector Soapbox

Modern Insurance’s panel of resident associations outlines the burning issues

After years of controversy, the debate about renewal pricing in insurance has come to a head T

he Citizens Advice Bureau has launched a super complaint against five different sectors about differential pricing for new and existing customers, and the FCA has launched a market study.

There are two ways to look at the issue - in terms of wellfunctioning markets, and in terms of reputation.

The well-functioning markets approach says that so long as consumers know what they are doing when they choose to pay a certain price, then it doesn’t matter what they pay: it’s their money and they can do what they want with it.

One problem with the market approach is that it is very difficult to prove that people are always making informed decisions.

That’s why the ABI/BIBA guiding principles say, ‘ABI members will actively review their customers’ tendency to shop around in line with the existing ABI and BIBA Code for potentially vulnerable customers at renewal’.

If people feel that there is a ‘devil take the hindmost’ approach to customers at the renewal stage, it makes it very difficult to convince them that they will be treated with appropriate care and respect at the claims stage – even though research into consumer satisfaction shows that insurers usually do a good job at this stage.

Given their experiences at renewal, consumers may feel that there is little value in any of the promises they are buying. That’s why, with issues like renewal pricing, ‘soft’ factors like reputation are far more important than ‘hard’ factors like classical economics.

The challenge for us as a profession is to find a way of measuring reputation, and the impact that issues like renewal pricing has on the public, with as much rigour and accuracy as trends in pricing are measured. That way policy can be made on what matters, and not just on what is quantified.

DR MATTHEW CONNELL, Director, Policy and Public Affairs, Chartered Insurance Institute (CII).

A much bigger problem is that many crucial aspects of insurance require an act of faith – for example, people have to believe that insurers will pay out on a claim to have any motivation to take out insurance at all.

Tackling the ‘loyalty penalty’ arked differences in prices between new customers and long-standing customers are a difficult reputational challenge for the industry and the political, media and regulatory scrutiny of general insurance pricing continues to increase.

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Like in any competitive market, motor and home insurers compete on price and want to attract new customers. Competition means that existing customers are free at renewal to shop around to see if they can get a better deal with another insurer. But this also means that long-standing customers can lose out. In some instances, customers are paying too much for their insurance because they have renewed their cover without shopping around.

The ABI recognises that for some the market is not working as well as it should, which is why we were the first sector in the economy to launch an industry-wide initiative to tackle excessive price differences between new and long-standing customers.

In 2014, we called for regulation across the market to improve clarity and transparency at renewal for all private home and motor insurance customers. As a result, in 2017, the FCA introduced a requirement on insurers and intermediaries to show both the current and new premiums on renewal documents. In addition to the renewal messaging requirement, the ABI and BIBA published a Code of Good Practice regarding support for potentially vulnerable motor and household customers at renewal. The Code provides

Issue 35

that customers do not unduly suffer detriment as a result of their vulnerability. Our Guiding Principles and Action Points, published in May, further show that the insurance industry recognises the scale of the problem and is willing to act responsibly to stop long-standing customers from being unfairly penalised by excessive premium differences compared to new customers.

We will work with the FCA to address issues raised in the general insurance pricing practices market study. We want to ensure that the market works as well as possible for all consumers. Should any remedies be proposed, they should be practical and proportionate to avoid unintended consequences and ensure a market that works well for all customers.

As an industry, it is in our interest to get this right. If insurers want to appear to the outside world as organisations with a true social purpose in helping to manage risk they must be prepared to engage in finding solutions wherever issues of fairness are being raised.

LAURENZ GERGER, Policy Adviser, Motor, Association of British Insurers (ABI).

Modern Insurance 37

FEATURES

Storm Surge, Brexit, Under-insurance and Mourinho… n a recent TV interview, Manchester United’s Jose Mourinho bemoaned: “If it rains in London that will be my fault too!” Many in the insurance industry would share Jose’s sentiments when faced with Government and press reaction to how the insurance industry responded to surge events.

If materials cannot pass easily across borders post Brexit, they may be in short supply. Add to this, the potential absence of EU nationals who have worked extensively in the construction industry of late, perhaps contributing to labour resources being limited after a surge event.

Since David Cameron pulled on his green wellies by the side of the River Thames declaring that he would hold the insurance industry to account and that his Government would get people back into their homes promptly, much has changed. More recent storm and flood events have produced few, if any, negative press headlines about responses to the surge in claims, but there remains concern within insurance circles over whether this will be the same in the future.

In addition, such restrictions in materials and labour for construction could lead to spiralling building cost indices, in turn possibly resulting in sums insured being inadequate causing under-insurance.

This could make an already serious problem even worse!

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At the Industry Claims Initiative meeting, senior professionals representing brokers, insurers, loss adjustors, loss assessors and other stakeholders in the supply chain were rightly concerned about the capacity in the supply chain available to deal with future surge events of a similar magnitude to those in the past. Though good management was applauded there was agreement that the latest incidents were not ‘significant’ events that would test the capacity of the overall supply chain to respond.

So the circular argument is that concern over the lack of capacity in the supply chain for handling claims surge events could be exacerbated by a lack of materials and labour in the construction sector, which could in turn lead to spiralling under-insurance and further, perhaps unwarranted criticism of the insurance industry.

Perhaps Mourinho had a point - in future, unless the industry and Government alike address the flooding elephant in the room; “when it rains in London then…!”

ANDREW GIBBONS ACII, Managing Director, Mason Owen Financial Services Ltd, Chair, Industry Claims Initiative on Behalf of BIBA.

I do though, now have to mention the B word! Clearly any Brexit deal may well contribute to a lack of future resource in this area.

A tale of two cities - with apologies to Charles Dickens hat do Dublin and London have in common?

Language – yes.

Common law – yes.

Dedicated FOIL service – yes (well, coming soon).

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London FOIL, a new division of FOIL, set up to support the insurance law firms and lawyers working in the London and Lloyds’ market will be launched in November. London FOIL has the support of the insurance market and the steering group for insurers, reinsurers, brokers and lawyers has been meeting throughout the year to model a new division and establish its detailed function and purpose.

FOIL Ireland, which will similarly support insurance law firms in Ireland, is also taking shape with support from insurers and lawyers working in that jurisdiction. We anticipate that this new division will be launched in early 2019.

Both new divisions will follow the core principles of FOIL – a) A commitment to driving the kind of change which achieves an accessible and effective dispute resolution environment, where long-term needs and right outcomes for claimants and defendants hold sway over time-wasting activity, to the greater benefit of all concerned – insurers and claimants alike.

38 Modern Insurance

b) An exclusively defendant-focussed agenda. c) Membership will only be open to insurance law firms handling contentious claims work d) The functions will be lobbying, education and networking. e) Collegiate thinking articulated through the voice of a collective.

These will be delivered through the tried and tested working practices that FOIL has established over the past decades and which have proved very successful to date in England and Wales, Scotland and Northern Ireland.

That means establishing close relationships with insurance companies and insurance trade bodies, but at the same time independently holding views on how to resolve the challenges facing these insurance markets. And it also means working through small groups of specialist expert lawyers – what we term ‘sector focus teams’ – drawn from different firms campaigning on the key issues in insurance claims law.

It’s an exciting time to be operating in the London market and across the Irish Sea, and FOIL is looking forward to supporting the major players in these regions as the new divisions get up and running.

LAURENCE BESEMER, CEO, Forum of Insurance Lawyers (FOIL).

Issue 35

FEATURES

Understanding the consequences n the early days of the passage of the Civil Liability Bill, MASS wrote to the Lords’ Delegated Powers and Regulatory Reform Committee arguing that the full impact of the proposed reforms could not be understood without considering the proposed regulations that will follow the legislation and concluding that “The devil is very much in the detail.” With the Bill nearing Royal Assent, we will next see the intended devilry and begin to fully understand the dreadful consequences for accident victims.

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There are six remaining areas to be dealt with by regulations, which will be brought forward under secondary legislation or Statutory Instruments. Ministers will receive authority to prepare five of these once the Bill is granted Royal Assent in the next few weeks. These include the tariff of damages and the uplift of damages in exceptional circumstances. The sixth, the proposed increase in the small claims limit, will be introduced independently under the civil procedure rules. Collectively they will fundamentally reconfigure the future claims landscape. We do not know the process yet, and whether there will be any further consultation, or the timetable for their production and introduction, other than they will need to be in place in time for testing of the new Portal in the autumn of next year.

What we do know is that if they are drafted as has been planned, motor accident victims will simply be unable to get the justice that they deserve, having been purposely discriminated against as an intended Government policy. They will likely lose independent legal representation as a resurgent, and forever grateful, CMC sector takes full advantage of access to the new LIP Portal and an unregulated system where just about anyone can claim to offer “legal advice”. This will particularly adversely impact vulnerable groups – people on lower incomes, the disabled, the young, the elderly and those with poor or no digital access. No accident victim, whatever their level of pain and suffering, but particularly these groups, should be so openly prevented from receiving full justice. The implementation of the reforms could yet be fair and appropriate without severely affecting the rights of genuine accident victims. It is not yet too late.

PAUL NICHOLLS has been Chair of the Motor Accident Solicitors Society (MASS) since October 2018 and is a Senior Partner in Nicholls Brimble Bhol.

Defining dishonesty hen plans to increase the small claims limit for personal injury claims come to pass, there are key areas of concern for the injured people affected. Their options range from forgetting about making a claim to having a go at running it themselves.

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The practical problem with the latter is that the wealth of advice, experience and expertise of a lawyer cannot be replaced with a leaflet or a pop-up box on a screen. Lawyers train for years for good reason. Injured people will be up against defendants who will have legal teams at their disposal.

Recent research by Ulster University identified intellectual, practical, emotional and attitudinal barriers faced by people representing themselves in civil disputes. On top of these is the lack of proper guidance on fundamental dishonesty, which is a serious threat to justice. It is possible that, faced with an unrepresented claimant, defendants will abuse their ability to allege fundamental dishonesty and have the claim struck out altogether. For example, if the claimant has mistakenly described a “neck injury” in one section of a form and “a neck and back injury” in another. The definition of dishonesty simply is not clear enough as it is, let alone when laymen are navigating the legal system.

Ignorance could be mistaken for dishonesty.

Issue 35

The prospect of being unwittingly branded as dishonest is likely to scare off otherwise genuine claimants from making a claim.

Claimant representatives see inappropriate allegations used often, but are equipped to deal with these. If inexperienced litigants in person are faced with threatening letters, which alledges fraud and threatens fines or possibly even imprisonment, it is likely that they will simply drop their claims. There must be clear guidance on the circumstances in which fundamental dishonesty can be alleged, and litigants in person must be able to get legal advice if such allegations are made against them.

And a corresponding provision for defendants when they are found to be fundamentally dishonest in defending their claims is needed. When a defendant has been fundamentally dishonest they should be treated in the same way and the defence should be struck out.

BRETT DIXON, President of the Association of Personal Injury Lawyers (APIL).

Modern Insurance 39

FEATURES

Industry Innovators Interview: Deemly Modern Insurance spoke to Sara Green Brodersen from insurtech start-up Deemly, a reputation and social verification tool for P2P marketplaces and sharing economy businesses, looking to build trust and therefore help established platforms and businesses grow.

Q A Q A

How would you describe Deemly in three words?

Trust, technology and impact.

What makes Deemly different from other start-up companies?

We have been part of creating a new market. We are part of shaping the industry as well as catering to the industry and I think that has shaped the way that we do a lot of things but also how we set our aims and ambitions. I used the word impact to describe Deemly because that is what we are wanting to do for this industry.

Q A

What would you identify as the gap in the market that Deemly aims to fill?

The main problem we are solving is the issue of trust. We know that about 70% of users that are interacting in the sharing economy are worried about being in that space because they don’t trust strangers. For that reason it also becomes a huge issue for platform owners to gain trust from customers because it stops them from being able to grow their company. We are trying to cater to both sides of the coin.

40 Modern Insurance

Q A

What were the main challenges in standing out and establishing yourself in a competitive market?

Catering to our market and having the validity of young companies to go out and sell to potential customers and how you do that. From our side we tried to build up our thought leadership, be a part of really shaping and driving the industry forwards and to have validity in what we do; that has been a fun challenge but also a challenge that not all start-ups face.

The basis of starting a company is knowing your industry and your customer

Issue 35

FEATURES

Our approach is about online credibility and what has the biggest impact on building or tearing down trust barriers

Q A

How is the wider industry responding to challenges in your area of the market, and how are you tackling these?

The issue of trust can be solved in many different ways because trust is intangible and arbitrary, so there is not one way of solving it, but we have been very focused on research and what the data is actually saying. Our approach is about online credibility and what has the biggest impact in building or tearing down trust barriers. That is our approach and something that is really supported by GDPR, new data protection legislation, where everyone should be able to own and manage their own data, we are catering towards that movement in the industry as well.

Q A

How are new consumer buying habits forcing change in the insurance industry?

Looking at the sharing economy as an industry that is driven by consumer behaviour changing, what we hear from a lot of our customers is that they have a really hard time finding insurers that can match their needs because there isn’t a lot of data that they can base it off. There is huge potential in catering to the sharing economy in my opinion. There is a need for a big player to go in and cater for them.

Q A

How is technology influencing Deemly’s service offering, and how will this be developed in the future?

Technology is at the core of what we do and currently we are leveraging everything we do with big data, artificial intelligence, algorithms and so on. We need to be keeping a close eye on blockchain technology as well and how we might be able to use that going forward.

DEEMLY

Deemly helps to build trust. Allowing platform users to utilise their entire digital reputation helps both new and established platforms achieve fast and sustainable growth. Individuals will be more inclined to try out new platforms if other users have viewable ratings and reviews. Similarly, less-active users of more established platforms will have an easier time participating when they can utilise their entire digital reputation to compete with the platform’s most active users.

Q A

What is unique about the culture of Deemly?

Trust and transparency is woven into everything we do, that also goes for the people we hire. They have to have that as an ingrained value in themselves and the way they work. But we also have a belief in that the sharing economy is a mindset and if everyone adopts that mindset we can make the world a better place.

Q A

Where do you see Deemly this time next year?

We have a lot of exciting projects in the pipeline; right now we are gearing up for more customers, more users and expanding our geographic reach as well, so I hope that we will have a much bigger impact by this time next year.

Q A

What advice would you give to anyone else looking to disrupt an industry?

We are part of creating a new market and disrupting an old industry. The reason why we are successful is because we understand the industry really well and our customers really well – that is the basis of starting a company, knowing your industry and your customer.

SARA GREEN BRODERSEN is the Founder and CEO at Deemly.

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Modern Insurance 41

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FEATURES

The requirement of cultural change for successful digital transformation Alastair Burrows, MarkLogic, discusses what is driving digital transformation in the insurance industry. ne of the obvious challenges of digital transformation is technology, though the cultural side of the transition is also important, and is often overlooked. This aspect is less tangible and more subject to change from organisation to organisation, making it harder to discuss and articulate best practice. It is, however, still an area worthy of much discussion.

Any project can succeed in deploying technology - if the right technology is chosen for the task and can do it within specific timelines - but if employees don’t embrace its use day-to-day, then it will never meet its full potential.

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This challenge is compounded by the size of the organisation, mostly because the bigger the company the more people view being assigned certain responsibilities and developing specific skills and roles as a point of personal pride. For example, a team member that knows how to manage all the varied and siloed digital tools deployed to produce an accurate and complex report has carved out a specific, valuable and respected niche for themselves. This worker, who spends a significant portion of their week doing this task, would understandably feel threatened by a system that can generate the same report quickly in a fraction of the time.

Looking at the challenges of digital transformation and the efficiency it will promote at a company, it is right for that person to worry that if they are no longer needed to perform that complex task, and that their employment may be at risk. This is just a natural part of company change, much as why people aren’t working in the same way they did twenty years ago before the rise of hypercomputing, flexible working and all the latest technology powered changes. However, you can’t let employees feel threatened by new systems or they will not buy into those systems, and your expensive technology will be left underutilised. This is why it is vital to get C-Level buy-in and to use their involvement to create a companywide narrative.

Getting C-level exec buy-in can be difficult, but building a digital capability that produces data insights is a powerful way to overcome resistance. At MarkLogic, we often run into this situation, where C-Level reception of a new digital platform can be lukewarm until it starts producing visual data outputs and reports for the executive team. Once they begin to see the information the system could generate, they wanted to know what else it could do. Then they found budget to hire data scientists and pushed more people to use and interact with the new digital tools.

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The reality is that complex business needs are driving the call for increased digital transformation

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FEATURES

Often you need a tipping point, which demonstrates to the entire team the effectiveness of the new digital capabilities and that takes it from being a ‘data’ solution to a part of the company culture A better way for getting buy-in is to focus deployment of the new tool towards achieving specific business outcomes or goals, as articulated by the customer. Once digital transformation is delivering results and can start to meet these goals, C-Level engagement begins to grow, and the cultural shift begins to filter down from the top.

Often you need a tipping point, which demonstrates to the entire team the effectiveness of the new digital capabilities and that takes it from being a ‘data’ solution to a part of the company culture. A good example of this, from an insurance perspective is to imagine a team that is struggling with producing budget trackers using their legacy systems and the need for an updated set of tools to create them. The tools get deployed but initially the team is resistant and carry on in the same way they’ve learned and have done for years. Then someone decides to try the system out and when they see how painless the new digital tools are, the team starts using them for complex reports, then easier reports, and then for day-to-day operations. Once the team starts asking for more data and shifts into using the system as an operational tool, the whole database became vital to company operations and used for far more than just reporting.

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The reality is that complex business needs are driving the call for increased digital transformation. Efficiency is paramount, and the ability to generate, utilise and understand data is vital to remain competitive in an ever-evolving landscape, populated with new data-driven insurtech start-ups. However, the technology is not the only part of the story. Every company is a living, breathing mass of complex roles, responsibilities and unique cultural challenges, and these must be taken into consideration as part of a digital transformation plan. Employees must be led from the top with a narrative that shows them their place in the new digital company, or your systems will struggle to gain acceptance from people afraid to be left behind. Digital transformation is mandatory, but it is your staff that will make it a success, not the technology alone.

It is the reality of these complex business needs that is driving digital transformation across the insurance industry. Efficiencies, cost-margins, and competitive pricing are encouraging more and more insurance companies to consider streamlining and deploying new more efficient digital capabilities. This will soon need to be the norm, rather than the exception.

ALASTAIR BURROWS is a Senior Account Executive at MarkLogic.

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FEATURES

Looking ahead Modern Insurance caught up with Andrew Marsh, Director at Auto Industry Consulting, about all things automotive.

Q A

We need a campaign that says that fixing cars isn’t only about bashing metal

What have been the key industry challenges of 2018 and how have they effected the vehicle repair sector?

2018 saw the fruition of a technology trend that has been underway since 2004, which is ADAS. There are markets where this is going to become or is already mandatory in passenger cars. This year for the first time, Euro NCAP finally starting publishing the objective benchmarking of ADAS performance – after more than a decade of ‘chat’.

There are insurers and service providers that are forward looking but the majority of the market is in a state of mild panic, with a significant shortfall of appropriate new skills. For cars, many of the ADAS features are available via the options list when the vehicle is built. Trying to find out what was fitted to the insured client’s vehicle remains an immense challenge.

Q A

We need to be encouraging more young people into the sector, how do you think we should do this?

AutoRaise was created to train rounded technicians; technicians that would have the capabilities and awareness to do all the jobs required in a bodyshop. The sector needs to show vehicle repair is not an afterthought job; it is a technology centred job.

The majority of the bodyshop industry has its heart in the right place, but its mind is stuck with their own experience. However, for adults who were raised with PCs/tablet/smart phones, using software is second nature. Our industry has not managed to fully engage with that. We need a campaign that says that fixing cars isn’t only about bashing metal. It is now about software, electronics, mechanical, panel and paint to repair a vehicle to full functionality.

Q A

How are new technologies changing the face of repair?

The biggest challenge is to be part of the connected vehicle ‘food chain’. For some years, vehicle manufacturers have established direct communication with their vehicles ‘over air’.

Vehicle owners/end-users can sign up for vehicle to external communication (live SatNav, WiFi hot spot, and more), yet don’t understand the data isn’t necessarily owned by us. Ensuring data security during the claims/repair process is difficult.

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Whilst exclusive vehicle to external communication contracts are not illegal, this does present a commercial disadvantage to those who are not part of the contract. When every new vehicle can only communicate with the manufacturer then we have a potential problem - and we’re not far off from that now. Market domination (i.e., more than half the UK parc) by such contracts should be reached by around 2030, unless something like block exemption could be put in place.

Q A

How is Ezi-Methods different from other repair products on the market?

Ben Cardy and I set up this service to be as simple and possible, because we knew that the collision repair sector does not like complex products. We saw an opening for providing information for collision repairers, offering vehicle manufacturer repair method access in three steps from the home page to make/ model/body style specific methods. In addition, we are trying to create a product for insurers to help them understand what a vehicle could have fitted to it – especially for high voltage systems and ADAS - to bridge the knowledge gap for specific vehicles.

Q A

What opportunities do you see arising for the sector in 2019?

It is exciting because we have so much change happening in all directions at once; it is nearly impossible not to find opportunity.

The behaviour of the insurance and repair sector, collectively, is to believe that it is in step with each other but that isn’t what is happening; insurers aren’t comfortable because they are not fully connected with the market in terms of what each insured client has fitted to their insured vehicle, and that needs to change.

ANDREW MARSH is Director at Auto Industry Consultancy, publisher of Ezi-Methods.com.

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FEATURES

Monica Savic-Jabrow, Barrister Direct, introduces Quick Costs and everything you need to know about the firm. or any law firm operating in the current legal landscape, cash flow is a major priority and, for many, a major concern. As the lifespan of a matter increases, so does the time for any given firm to realise their work in progress on that file. Even when damages are successfully negotiated, costs become an unduly drawn out process littered with chaser e-mails, stand-offs during negotiations and lulls of silence. An idea designed to combat that? Quick Costs.

F

Quick Costs was established in late 2018 and will commence trading in January 2019. Formed by Andrew McKie, Monica SavicJabrow and Ian Sekate, with a combined experience of over 25 years, Quick Costs is a legal practice specialising in the law and practice of legal costs.

Quick Costs was set up following a recognised and first-hand experienced need for change in the marketplace. Historically, firms have been slow to process bills, negotiate and chase costs. Similarly, there has often been a reluctance to commence proceedings or make applications for interim payments. This hesitation and delay causes law firms, operating within the modern day environment, significant cash flow problems, which no firm can afford. With the changes to LASPO and the Civil Liability Bill, there is now more pressure than ever on law firms to convert their work in progress into realised cash, in particular with interim payments, speedier costs settlements and the deployment of full armoury under CPR 36.

The historic solution to such issues has been work in progress funding or costs advance funding. However, with the market shrinking and funders becoming nervous about the changes, there is a very real gap in the market for a costs outfit that puts speedy and strong recovery at the heart of its business model, and, as such, we are extremely proud to pioneer Quick Costs.

At Quick Costs, we pride ourselves on not being a traditional costs firm, from your first point of contact, Quick Costs provide a new approach to costs putting our client’s needs first with a friendly, approachable and nationwide service. Our service is focussed purely on our clients, their needs and interests. Quick

Costs is driven by fast recoveries whilst retaining technical skills and experience at its focus to ensure maximum recovery.

We pride ourselves on our attention to detail and consistent level of client-focussed service, ensuring that your costs are handled in an efficient, professional and effective manner, using our bespoke case management system, programmed with our service standards, available on our website, which provides for automated efficiency, whilst maintaining our technical expertise in both costs and practice.

Quick Costs’ Expertise allows us to assist your firm with a range of services in personal injury, clinical negligence, housing, construction and commercial work, which includes: • Costs Drafting Services – on both an informal statement of costs and formal bill of costs, fixed and standard costs matters • Costs Negotiation Services – on both fixed and standard costs matters • Costs Budgeting and Management Services • Provisional Assessment and Detailed Assessment Services • Advocacy Services • Training and CPD Our unique positioning as Barristers, in the areas, serviced by the firm permits knowledge of the issues that arise, how to deal with them and how to achieve maximum recovery for you and your client. Our role as Directors of Barrister-Direct also allows us to understand the precise position, situation and needs of our clients and how to best achieve those needs, speedily and effectively.

Quick Costs understand that our prospective clients want to meet us, understand us and understand our knowledge and capabilities, prior to instructing a new firm in the marketplace.

Subsequently, as part of our newly formed firm, we will be travelling to see new and old contacts new and old, delivering free seminars on a range of issues from conditional fee agreements and qualified one way costs shifting to budgets, alternative funding models and the upcoming changes.

Our seminars will be hosted on:

For any law firm operating in the current legal landscape, cash flow is a major priority and, for many, a major concern Issue 35

Manchester: 14th January 2019 (10am – 1pm) Liverpool: 21st January 2019 (10am – 1pm) Leeds: 28th January 2019 (10am – 1pm) Places will be limited to 40 spaces and two per firm, so please book early to avoid disappointment. The seminars will last three hours and will be delivered by our Directors, Andrew, Monica and Ian. For more information about Quick Costs, please visit our website at www. quickcosts.co.uk or contact MISS MONICA SAVIC-JABROW on 07983 866132 or Mr Andrew McKie on 07739 964012.

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ROADSHOW

The Personal Injury Reforms Roadshow In November 2018, Modern Insurance took to the road in partnership with Lyons Davidson to discuss four important factors concerning the personal injury reforms: the claimant journey, routes for advice and assistance, defending claims and the road to recovery. Gathering together individuals from across the industry, we debated the impact that these changes will have and how we need to collaborate and change in order to work in this new claims environment.

A note from Mark Savill, Managing Director, Lyons Davidson Solicitors:

Lyons Davidson Solicitors We are a full-service national legal practice that has been providing industry trusted services to insurance industry, and businesses and consumers for over 40 years.

The proposed reforms to personal injury claim process outlined in the Civil Liability Bill and the planned increase in the Small Claims Track limit will have an enormous impact on people who suffer personal injury, on the insurers dealing with claims that they bring and all organisations who provide a service as part of that claims process. Whatever your viewpoint about whether the measures are right or wrong it seems clear that they will be brought in to effect substantially in their current form.

We work strategically with our business partners to develop and deliver effective legal assistance to their customers. Our innovative approach to law, combined with a unique combination of expertise and tailor-made technology, results in a powerful service that can adapt to a complex and ever-changing business world.

The series of roundtables aims to look at the impact that these changes will have, and they way that we will all need to change the way that we work in the new claims environment. They will examine the detail that will be needed to implement reforms and to make the claims process work properly.

We pride ourselves on our approachable and innovative service, and the good-value advice we give, which leads to practical outcomes for our clients.

We will examine the process from the claimant’s perspective, looking at the journey that they will face in the new regime and where they will be able to seek additional advice and assistance to support their claim.

An important part of this period of change will be the role that technology will take, in relation to supporting the claimant through the claims process and making claims management as efficient as possible. We will look at how the Ministry of Justice’s solution are likely to develop, with the obvious question as to the timing of delivery, and how different organisations in the claims process will make the use of automation, integration and data analysis within their sector.

We are committed to conducting our business in a socially responsible way and we are accredited for our approach to our impact on the environment, the security of our systems, and the investment we make in our people. Our core values of communication, commitment, innovation and accessibility underscore everything we do.

This will be an opportunity for businesses at all points of the claims process and from both sides of the claims fence to come together to discuss these issues and see where more collaboration will be needed between different us to make the claims process work for everyone and deliver an outcome that is still fair for someone who has suffered an injury.

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A note from the Chair

Mark Savill: Injury Reforms and the way forward

Michelle Lennaghan: Claims funding and product development

Katherine Howell-Price: Need to adjust and work together

This series of roundtables took place just as the Civil Liability Bill proceeded through its last stages and now makes its way to Royal Assent, providing a clear backdrop to the discussions that took place.

The effect of the reforms will have a fundamental impact on the shape of the support and advice service provided to customers. The first touch point for most claimants will be their insurer and it is clear that they are keen to ensure that they provide a set of solutions that support their journey the claims process. Legal expense insurance will remain fundamental to that journey, and the changes will make it easier for insurers to explain the benefits that their product provides while developing a modern service offering that delivers the support they need.

The commentary about the upcoming reforms has focused largely on the Claimant, access to justice and the future of Claimant law firms, however they will undoubtedly bring a huge shake up to the insurance industry and how claims are handled. The way in which the industry reacts will shape the real experience of those going through the claims process, and could make or break the success of the Government’s agenda with this Bill.

One of the clear threads in the discussion was the determination that everyone had to make the process work. The sector has always had a reputation for being innovative as more change is forced on them and it was clear that the businesses in attendance wanted to make the service efficient and cost effective while helping the claimant through a process that had more complexity in it than the MOJ were prepared to recognise.

Technology is fundamental to this approach both for providing online access and self-service options for customers, automating steps to remove administrative overhead and integrating with partners in the claims process supply chain.

There is also a real opportunity to introduce new business models that harness this innovation and bring together partners and deliver a modern customer focused service in the face of the reforms.

While the debate on the Bill is now over, there is still much to consider in the detail of the rules which will determine how this change is implemented. The concern was clear though that unless the MOJ provided more detail and listened to the practical worries of the industry introduction of the reforms will fail the claimant and be a difficult journey for everyone.

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What was most exciting in the discussion is the determination of insurers and service providers to develop their service and products to provide real value to customers, with the panel practically turning in to a workshop that created the outline of a legal services product.

Insurers are keen to ensure that their customers are supported even if they don’t have legal expenses insurance, with service propositions being discussed that don’t undermine the value of the product, keep the customer within the brand value and security of their supply chain and ensure a cost effective support to the customer. It will be interesting to see how insurers respond.

It was clear from our discussions that not enough is yet known to allow insurers to fully plan their approach or to ready their claims teams for action. However, we were able to highlight some key points. Claims teams will need to be able to adjust how they work to deal with all routes to claim, whether that is litigants in person, claims management companies, or law firms working to streamlined processes. Many insurers are already geared up to deal with claimants directly through their TP schemes, but some believe they may need to scale this up.

What was clear is that lawyers and insurers will need to work closely together to ensure that policyholders are being treated fairly by all involved, and that the system is transparent and accessible.

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The Claimant Journey

As we move on from the debate of ‘will it or won’t it’, it is time to accept the legislation and plan for the new claims environment – and most importantly, create a successful claims process for the claimant. Our first roundtable panel was keen to explore what they each thought the experience was going to be like for the claimant. The government believes it will be straightforward with litigants in persons (LiPs) being able to easily navigate their way through the proposed portal without support, but was the table in agreement?

What it will come down to, said Jason Tripp, is “how the first party taking the call is going to explain to the customer what is going to happen next and how service is going to be delivered there after”, therefore, does this debate start further up the chain? Simon Trott agreed with Tripp, stating that there is a big agenda surrounding ‘end to end’, coupled with the introduction of more technology into the process. It is unlikely that all customers will want to go completely digital, so does an infrastructure need to be in place that allows claimants to jump in and out of a digital journey? But the question is, who is going to be that first point of contact? Tripp suggested that claim handling firms will enter the space. Trott disagreed, stating that even though lots of CMCs are entering the market and “taking over the process”, it is unlikely they will be able to cope under the current CMC model, not only because of the shape of the sector but also from a regulation point of view: moving across to the FCA. Brett Dixon weighed in on the conversation: “There is currently a gap between knowing what is actually happening in terms of the detail as opposed to the intent of the system that is being built. The injuries become less important and the bolt ons more important, which is something that the government either doesn’t understand or are unwilling to consider the reality of. You can imagine the conversations in 2024 when it has not been delivered and there are still these problems that need addressing. It is not going to

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deliver on the promise that it is based upon and what you are going to end up with is a whole section of society who feel disenfranchised by it and the system.” The definition of a vulnerable road user also came into question and how they would be supported, Dixon saying that it would virtually impossible to draw up a set of rules that could be used to define road users, stating that it is already complex enough.

The table discussed how claims could be routed depending on complexity markers, saying that value cannot be enough on its own to characterise an individual’s case.

Ayesha Nayyar believes that a lot of claimants will drop out of the process as soon as it leaves the portal due to issues and proceedings. She questioned how many claimants would be able to successfully navigate through the litigation system as a litigant in person. Could it be suggested that different processes of getting to the portal need to be introduced in order to cater for the range of claimants and unrepresented claimants that there will be? Nayyar also raised the point of medicals and the industry’s assumption that all clients can understand a medical report, but there will be a majority of claimants that have never had a medical report and will

There is currently a gap between knowing what is actually happening in terms of the detail as opposed to the intent of the system that is being built Brett Dixon, APIL Issue 35

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Attendees: The customer journey in the law firm isn’t a great journey, irrespective of the reforms, the claimant journey needs to be looked at anyway Phil Paterson-Fox, Consumer Intelligence therefore not be able to understand the format or the jargon, potentially missing out injuries in the first report leading to extensive causation and fundamental dishonesty. At present, solicitors often explain the content of a medical report to their client and ensure it is factually accurate. With litigants in person, this will not be done and could have significant repercussions. Hina Modha also suggested that because a prognosis period can sometimes take a long time, clients may be more inclined to settle and not wait, meaning they could potentially not be compensated properly. Savill said that from an insurer’s perspective he believes that to be the opposite, “the likelihood is that an injured claimant would seek a report and then wait, so one of the unforeseen consequences could be that the life cycle of claims within the insurance process is going to extend, because you haven’t got the advice that a lawyer would provide about the risks, and the natural response may be to wait.” But this all comes down to claimants needing more education about the process and having more available routes for advice and assistance if they are going to have to self-service themselves.

To end the discussion, a point from Phil Paterson-Fox: “irrespective of the reforms, the whole customer journey at the moment is still pretty rubbish. Coming from an outsider, when a customer starts the journey right through to the claim getting settled, coming through organisations like us or others, the hand over to the law firm isn’t a great process, the customer journey in the law firm isn’t a great journey, irrespective of the reforms, the claimant journey needs to be looked at anyway.” The industry needs to remember that the customer should be at the heart of everything that they do.

What it will come down to […] is “how the first party taking the call is going to explain to the customer what is going to happen next and how service is going to be delivered there after”, therefore, does this debate start further up the chain?

Jason Tripp, Coplus Issue 35

Ayesha Nayyar

Brett Dixon

Clint Milnes

Jason Tripp

Mark Savill (Chair)

Simon Stanfield

Simon Trott

Hina Modha

Principal Solicitor Nayyars Solicitors

Group Director, IT and Change Winns Solicitors

Managing Director Lyons Davidson Solicitors

Managing Director National Accident Helpline

President APIL

Managing Director Coplus

Vice-Chair MASS

Personal Injury Lawyer Hodge Jones & Allen

Phil PatersonFox Key Account Director Consumer Intelligence

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Routes for Advice and Assistance

The government devised these reforms as a set of measures which would act as a disincentive for exaggerated and fraudulent claims. The changes will undoubtedly have a significant impact on the legal advice that claimants can receive when making a personal injury claim. It has been suggested that legal representation might not necessarily be part of the consumer solution going forward. At the moment, most claimants get their advice from law firms when making an injury claim, so Michelle Lennaghan kicked off our second discussion with: “what do we think the reforms will do in terms of impacting law firms after their implementation?”

Mike Timmons believes that legal professionals will exit the market and be largely replaced by claims management companies (CMCs), therefore risking a significant spike in unmeritorious and fraudulent claims. Timmons went on to say, “If you speak to anyone outside of the insurance industry, they don’t particularly like the industry – insurance is a grudge purchase, and recent scandals such as dual pricing have dented its reputation. Insurance companies are fixated on taking lawyers out of these claims to reduce their costs, but I think they could be authors of their own destruction.” Adam Nabozny agreed that the market is going to become difficult for law firms and the way that they work will need to evolve. In terms of the claimant, his concern is that access to justice is going to be reduced and therefore it is up to the rest of the industry to provide a solution and to offer support and guidance.

Karen Rendle believes that there will still be a market for the top ten firms that can develop the technology that Lyons Davidson already have. She went on to say that there will always be a need for advice but it depends on how this plays out which will determine how the industry can continue to issue it. The process is currently very intimidating for the public, said Martin Sherwell, and people want hand holding. When the reforms have been implemented, the support may not come from a legal organisation but that will become irrelevant

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because from the customer perspective, they are going to want support regardless. It was soon suggested that technology will become more interweaved into the process in order to ease the process as it has been found that consumers want to go online and have a digital journey, but there is still a proportion that want the human touch too.

By introducing more technology, it is becoming clear that the government are aiming for claimants to run this process on their own as a litigant in person. Is that going to be achievable? Nabozny thinks it will be challenging because there is too much detail that we still don’t know right now.

Rendle agreed stating that there are too many obstacles in the individual’s way before they even get to make a claim.

Lennaghan then asked the table what parts of the process they think will be difficult for the claimant when making a claim? A range of answers hit back: getting a medical report, the jargon used in a medical report, how do they accept an

There will always be a need for advice but it depends on how this plays out which will determine how the industry can continue to issue it Karen Rendle, Lyons Davidson Solicitors

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Attendees: When the reforms have been implemented, the support may not come from a legal organisation but that will become irrelevant because from the customer perspective, they are going to want support regardless offer, submitting a claim etc. So, what will be available for consumers going forward – where will they get their advice from? Timmons suggested that even though they will be regulated by the FCA and there will be different rules around advertising and marketing, more CMCs will enter the market and they will aim to fill the gap left by legal professionals.

The table moved on to legal expenses insurance (LEI). James Waddy explained, from an LEI perspective, that his business sees LEI as a product that blends self-service and representation.

He expects legal expenses to fund these matters, however, the commercial framework will change, which will be largely driven by the panel firm and the costs involved in handling those cases.

LEI products need to continue to deliver the service that they offer today, however the twelve month period between April 2019 and April 2020 will be crucial, as policies sold from then may result in a claim under the new regime. Conversations need to be happening now as Sherwell rightly pointed out, the real deadline is April 2019. Lennaghan makes it clear helping customers with guidance on funding is crucial. The first thing Lyons Davidson do is ask a customer whether they have got LEI as it is in their best interest to use it, especially if the market is going to be moving away from legal representatives giving the advice.

The conversation also touched on the public’s education about the reforms. Timmons suggested that the reforms needed to include ‘plain English’ for claims processing and more should be invested into technology but human intervention shouldn’t be removed entirely. Gerry Brown agreed saying that the message can still be delivered without it being so complex and filled with jargon. As an outsider’s perspective, Brown said that the insurance industry needs to be more ‘human’ and deal with the emotion of the customer first. He also suggested that “there is a collaborative opportunity to make some changes to the industry; involving different people from across the industry could help to make a real difference.” Lennaghan agreed, saying that “to be able to make those changes we should be working together better as an industry because you have got the ABI view, which is very strong and because the rest of the industry is quite disparate, we are not coming at it from the same place with the same voice and in some ways it feels like we are making it harder for ourselves.” Rendle said that “if the customer had some confidence that we were all working together as an industry they would feel more confident in us an industry and therefore in our products and when making a claim.”

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Adam Nabozny

Clint Milnes

Gerry Brown

James Waddy

Karen Rendle

Martin Sherwell

Partnerships Direct National Accident Helpline

Chief Customer Rescue Officer The Customer Lifeguard

Partner Lyons Davidson

Michelle Lennaghan (Chair)

Commercial Director Lyons Davidson Solicitors

Group Director, IT and Change Winns Solicitors

Marketing and Development Manager Arc Legal

Technical Claims Partner RAC

Mike Timmons Managing Director Financial and Legal

There is a collaborative opportunity to make some changes to the industry; involving different people from across the industry could help to make a real difference Gerry Brown, Customer Lifeguard

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Defending Claims

Time to focus on things from a defendant perspective.

As we prepare to walk into one of the most significant reforms we have seen in some time, questions have to be asked about how the industry will ensure this works for the claimant. It is becoming apparent that insurers, as well as all other industry stakeholders will have different roles to play, so driving this forward in some kind of harmony is going to be a big challenge.

It is envisaged that once the reforms have been implemented, the claimant will log a claim through the portal and manage the process themselves, so what does that mean for the claimant?

And what is that process going to look like?

Laurence Besemer started the discussion by asking the insurers in the room how confident they were that claimants would follow that procedure and act for themselves, therefore highlighting any potential hurdles the industry needs to address beforehand. Javier Gonzalez said that “through the business impact assessment, the government was suggesting up to 30% would come through as a true litigant in person”, but recent history tells us that that is not how the public always operates as there are a number of schemes out there that are relatively easy and straightforward but people have left it for others to pursue on their behalf. “It shouldn’t be a difficult process but that is how it has been weaved into society’s psyche, which is why guidance and education needs to be better than it has ever been before”.

Gonzalez went on to say that there is a real opportunity here for insurers to do right by the claimant and give them the necessary levels of advice they need, otherwise there is a risk that they will be left behind and exposed to other elements of the personal injury market. Emma Baker suggested that it is then up to the insurer to change their model and become the one stop shop that they want to lead the claimant through.

“For me there are two issues”, said James Heath, “one, the assumptions that have been made and two, what the reality will be. The first assumption is that claimants will act as litigants in person and will pursue their own claims. After all that is one of

54 Modern Insurance

the key tenets of the reforms. This means that the new system has to be built to support the lowest common denominator – the unsophisticated litigant in person, who will need to be supported and guided throughout the process and provided with key information to enable them to make effective decisions at each stage. That means the portal has to be built as a B2C model, and hence reference to the development of a “Service” rather than a “Portal”. We then have to overlay reality, in which it is inevitable that claimants will be represented by solicitors, and CMCs, and the new process will also need to support those routes to market. The service must also be capable of supporting B2B engagement”.

As the conversation wore on it was becoming clear that there is still a lot of uncertainty surrounding the structure of the portal, or “service”, so it is difficult to say what the take up is likely to be and how effective it will be. What is obvious though is that insurers will have to adapt their models in order to deal with the changing environment.

Craig Godding reiterated this point explaining that insurers will need to be agile as it will not be an immediate switch into a new system, there will be an over-lap and a duel system will be running; insurers will need to be fluid and structure themselves accordingly. Although the insurers around the table want LiPs to believe in the process and use it how it is meant to be used,

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Attendees: There is a real opportunity here for insurers to do right by the claimant and give them the necessary levels of advice they need, otherwise there is a risk that they will be left behind and exposed to other elements of the personal injury market Javier Gonzalez, Covéa Insurance it is going to take some time to get there. Mike King suggested that it all comes back to trust in the motor insurance industry as a whole – “do the public really trust us?”

We moved on to the subject of fraud. As claims change so will behaviours. It was suggested that data analytics will step into the fold and play a large part in the future of fraudulent claims.

Nick Kelsall stated that the fraud arena comes down to the analytics and data currently sitting in the background – “data needs to be utilised and shared so that discrepancies can be spotted faster.” Kelsall pointed out that it is going to be difficult to determine what the fraud landscape is going to look like once we move into this new world – “we have already had a minefield of aggressive CMCs and claimant lawyers cold calling and pursuing claims – we need to keep it simple and build back people’s trust, hopefully people should then only want to go to their insurer if they need help with the process.”

The discussion moved from the routes to claim and therefore the different practices, behaviours and trends that could manifest, and onto strategy. Katherine Howells-Price was interested to know what strategies insurers had in place in terms of defending claims. Will the reforms bring fewer claims, or will LiPs be more likely to bring claims that Claimant solicitors might have filtered out? How will insurers need to adapt to deal with the different process and the different routes to claim? As King said, there are a myriad of different routes. “There will be intervention models in place. However, what will the claimant solicitor market look like after? I expect their relationships with insurers to continue and accelerate but how will their books change post reforms – will people opt to go down that route with the benefit of LEI as opposed to using the portal?” Nick Hilton explained that there is going to be many different approaches to how claims are going to be handled. From a defendant perspective, being agile will be very important. There are various ways for insurers to have strategies like ‘know your opponent’ but this becomes even more complicated now because the opponents are new and different and sometimes you won’t know who they are, some will be on the old process and some on the new. “What is a claims handler going to look like? What skills will they need? Does that claim handler need to become more customer service based as opposed to a negotiator?” Different insurers are going to have different approaches to all of the above but it is difficult to predict where we will be in the near future until more details are released. When this comes, the industry must be ready to react.

Issue 35

Craig Godding Head of Motor DAC Beachcroft

Javier Gonzalez

Head of Third Party Claims Covéa

Emma Baker

Partner Lyons Davidson

James Heath

Partner Keoghs

Katherine Howells-Price (Chair)

Laurence Besemer

Mike King

Nick Hilton

Divisional Manager Lyons Davidson Solicitors

National Third Party Claims Strategy Manager LV=

CEO FOIL

Head of Technical Claims AXA

Nick Kelsall

Fraud and Technical Claims Manager Allianz

Modern Insurance 55

ROADSHOW

Road to Recovery

Our fourth and final roundtable tackled the road to recovery.

This session aimed to look at all organisations within the claims process and what services we have in place in terms of ‘recovery’; what strategies we should be applying and how the industry will need to move forward. Mark Savill started the debate by addressing Part 2 of the reforms – “when might it happen and what changes might come in on the back of it?”

Sue Brown said that her understanding is that the consultation response has been written, but the MoJ do not appear to know when it will be issued. Brown voiced her concerns saying that she doesn’t see how we can launch this service without addressing rehabilitation. There has been a stakeholder group looking into a new process for rehabilitation, organised by FOIL. That group has looked at some changes to the process of how rehabilitation should be organised and at the invoicing process, but a major issue with rehabilitation is of course costs, and “at no stage were we allowed to discuss the cost of rehabilitation.

The process for how it works and how it will be invoiced will be fed over to the MoJ, but in the meantime, I cannot see how we can launch a LiP driven process if claimants are not going to be able to access rehabilitation in the way that they can now.” Joel Booth expressed his worries that the rehabilitation process is being made to fit behind the legal process when it should be the first priority – “you don’t want the legal process to compromise early access to rehabilitation because then it is counterintuitive.”

These changes are the first changes that will significantly impact the man and woman on the street said Christian Lindley; “if we are all not here tomorrow, the consumer, the policy holder, the individual is still going to have an accident…”. “The real challenge”, he explained, “is that we cannot lose sight of what the individual is entitled to, which is mobility, treatment and rehab, but the frustration is that even though we have all of these plans, we don’t know how to use them because we don’t have all of the information yet.” Andy Wild agreed stating that all previous changes have focused on how the industry

56 Modern Insurance

processes claims, how the relationship between an insurer and a solicitor works and the costs that people are entitled to. The part Wild is still reasoning with is how different people will receive different amounts of compensation depending on their accident, because what makes a person’s accident on a motorbike more complex than someone’s in a car accident?

The next question the table faced was about dealing with unrepresented claimants: how are they going to be able to access services? Is it something that needs to be advertised directly or is it going to be an opportunity for the insurers to look at third party assistance? Lindley believes insurers have had that opportunity already. “From an insurer’s perspective, in a controlled environment, it is far easier for them to outsource to the likes of ourselves to deliver a better service.” Steve Thompson believes that it should be incumbent on the insurer to provide advice and education to their customers “because if they don’t educate them then the CMC that is potentially involved in bad practices will.”

Depending on who gets hold of that customer at the point of an accident then dictates whether that customer is looked after properly and follows the right process Richard Taylor, GT Motive

Issue 35

ROADSHOW

Attendees: These changes are the first changes that will significantly impact the man and woman on the street Christian Lindley, Kindertons Richard Taylor said that the problem starts further up the chain.

“There is an element of doing the right thing at the first point, and that first point is the accident. Depending on who gets hold of that customer at the point of an accident then dictates whether that customer is looked after properly and follows the right process.”

Taylor went on to say that if insurers choose to outsource to third party assistance, “those decisions about who you pass it to will have a big impact on how these processes work.” Booth made the point that insurers will choose different journeys and strategies: “if you are with Insurer 1 that will be a different experience than with Insurer 2”. It is becoming apparent that we are already seeing different behaviours from insurers within the portal, and drastically different in terms of response rate, admission or denial rate, and it appears that some are more driven than others.

The discussion then turned to the medical report. Mike Cutler has huge concerns about who will be advising the claimant through that process because “the lawyer currently takes away a lot of the friction by dealing with claimant queries and explaining the process. It isn’t clear where that burden will fall in respect of LiPs and the MRO or doctor may be wrongly expected to fill that void.” He went on to say that he is worried about doctors being pressured by claimants because there will be a publicised tariff whereby the claimant could ask the doctor at the appointment what the prognosis is, they will then know how much their injury is worth and potentially not accept it. If they don’t accept it then who pays for the report? Cutler explained that another concern is the potential for ‘displacement’ of the injury. Within the proposed tariff, if you have a soft tissue injury to your neck, back or shoulders then the claimant is within the tariff, however, if you hurt your knee or elbow, then the claimant receives non-tariff damages.

Booth explained the definition of injury from a rehab point of view. “The definition that has been used is outdated in that it is a medical approach. Everyone’s experience of injury is very different - you could have the same injury on different people but have two very different recovery profiles. Having a definition that is so medical and outdated really removes from the fact that this is a human process and you can’t have a legal process that is so rigid and linear that it can’t navigate for people who have individual needs.” Taylor commented saying that “insurers need to understand the difference between a person and a car – a person has emotions and cars can be repaired and put back on the road; insurers have got to have a personal touch at the end of the day.” Rachel Di Clemente said that recent feedback showed that while the majority of the public are open to settling claims online, a large majority (45% from her firm’s sample) still prefer human interaction. “Clients are happy to go online, but want the reassurance of being able to speak to a human being if needed.” Savill said that we need get the balance right in terms of what a customer expects from the process – while technology is important to the process, having the human touch aspect is beginning to look vital if we are to supply a successful service.

Issue 35

Christian Lindley

Group Sales Director Kindertons

Mark Savill (Chair)

Managing Director Lyons Davidson Solicitors

Paul Boyle

AT Expert Bush & Company

Richard Taylor UK Business Director GT Motive

Sue Brown

Director MASS/MedCo

Joel Booth

Associate Director, Governance and Quality Ascenti

Mike Cutler

Managing Director Premex

Rachel Di Clemente

Legal Services Director Minster Law

Steve Thompson

Director InduSTry Insights

Andy Wild

Legal Director WNS Assistance

Modern Insurance 57

FEATURES

To settle or not to settle?

Steve Thompson, Managing Director of Motor Claims consultants, InduSTry Insights, raises the interesting debate of whether an insurer should settle third party motor claims with cash or other incentives, rather than fulfilling the claim themselves via their supply chain? he concept of cash in lieu payments (CILP) is nothing new, in fact it’s common place, particularly within the property repair sector. The advantages of CILP on the face of it are quite clear, mitigation of credit hire/repair costs, speed of claims closure and ease of reserving. From an insurer’s point of view, it’s easy to see why this is common practice and equally from a third party point of view, it holds similar benefits, rapid payment, minimal disruption and liaison with the insurer and their supply chain. It does seem like the proverbial ‘no brainer’…

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As with many things in life, is the obvious and easiest option always the best? As consultants, we constantly challenge traditional thinking in all of the work that we do (even if that maybe our view too on occasions) and look for alternatives. Our objective being, what are the hidden opportunities? What can be done differently?

How do we remove ourselves from tradition and “we have always done it this way” scenarios? The reality is, times change and therefore so do opportunities. I don’t think anyone would argue that the UK Motor Claims market is tough and marginal at best for all concerned. One such area of cost to insurers is the ‘cost of acquisition’. Although no official figures exist, it has previously been suggested to me by insurers that it costs them over £300 in marketing costs to secure each policy they sell. If you think about it logically, every third party is a potential customer of the insurer and therefore surely we would want to provide them with the best possible claims experience, so that they renew with the at fault insurer as opposed to their own? We know only too well that targeting customers with marketing is very difficult, as the

58 Modern Insurance

cost of high population advertising is exceptionally high. And the reality is, some of the people that you are paying to market to, are not actually potential clients. However, in a third party scenario, we know they: a) drive a car b) require insurance and c) unfortunately have been involved in an accident (even though it is not their fault, it is undoubtedly an experience they will remember), and this will alert the customer to the importance of insurance and the subsequent claims journey. Is it therefore not remiss to ignore what is potentially an excellent opportunity to engage with a competitor’s client on a service which both parties provide and as the third party insurer you are the one that is able to demonstrate the value of insurance? We all know that in reality, the only time a customer gets to experience the value in their insurance policy is when they make a claim. In this scenario, it’s a claim that as the ‘at fault’ insurer, you are going to pay for in any event, so why not show the policyholder how good your business is at delivering claims excellence? Once this has been delivered, you are potentially going to be front of mind when it comes to renewal.

Is it therefore the customer (policyholder) that gambles with agreeing to a CILP, or is it the insurer who is gambling on their reputation and securing a potential new client? I really think this is an interesting debate. As a potential customer (Third Party driver) it looks like a gamble worth taking: “I am already annoyed (as someone has hit me); I am angry and really don’t want any more

Issue 35

FEATURES

Is it therefore the customer (policyholder) that gambles with agreeing to a CILP, or is it the insurer who is gambling on their reputation and securing a potential new client? inconvenience”. In your mind, all I need to do is deal with one person at the insurer, agree a settlement and the matter is closed and I can move on. To a customer at that time, it feels like the problem is resolved. The reality is it has not, they have now become a supply chain manager for their own claim. They need to source an appropriate repairer, negotiate the cost (which inevitably will be higher than first imagined) and organise mobility whilst their car is being repaired. The supply chain and claims people reading this will know that’s not an easy task on its own. If it was, there would not be armies of skilled supply chain people employed within insurers. Who is then guaranteeing the work?

Organising the collection and delivery of the vehicle and hire car?

This all actually may seem a lot of aggravation to the customer and they decide to live with the damage? It could be argued that neither scenario is good for anyone?

Does the insurer therefore potentially gamble with their reputation by CILP, whilst it may have appeared a quick and effective solution at the time? The customer now feels, even more frustrated and annoyed than they did at the point of accident? The initial positivity of the CILP has potentially long since passed. Whereas the experience could have been so much better and the potential to secure a new customer at renewal could have resulted. Or does none of this make any difference? Whatever happens in this scenario, by settling with a prompt CILP, the ‘at fault’ insurer has potentially avoided significant credit hire and repair costs. Maybe in a world where brand loyalty within the insurance sector is relatively low (until such time as you actually utilise the services of the insurer), but the drive for cheaper insurance is high, does it really matter? Or does a poorly managed third party claim create unintended consequences? And that’s the debate, “To settle or not to settle?”.

STEVE THOMPSON is the Managing Director of InduSTry Insights.

Every third party is a potential customer of the insurer and therefore surely we would want to provide them with the best possible claims experience, so that they renew with the at fault insurer as opposed to their own?

Issue 35

Modern Insurance 59

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FEATURES

A year in review, Insure Apps: An insurtech start up Stephen Marshall, Managing Director of Insure Apps, takes us through his journey as an insurtech start up and how insurtech has changed the industry. f you google the word “insurtech” and have a quick browse, you’ll notice most of the articles come after early 2017. This isn’t to say that the term didn’t exist, nor that the insurance industry possessed no technology, but it does point to the fact that it’s a fairly new term.

I

By coincidence, Insure Apps was formed in February of 2017 and began trading in July of that year. Perhaps we’re in a good spot to talk to you about it and see what can be learnt from our journey so far.

“Journey” is actually a great way to describe being a start up in this new space, as you’ll have guessed it’s filled with lots of highs but also a few lows and it’s only fair to talk about both.

Initially there was a brilliant feeling of launching our business in the industry, a good degree of publicity meant we were inundated with enquires on the first day. “It’s a no brainer” and “That’s right up our street” were common phrases and sure enough the first few sales were completed. But then the initial excitement dies down and you begin to question whether the technology you offer is maybe a few years too early for the market?

Perhaps even you realise while your product is good, it’s not quite yet great. This is also the benefit of being a start-up, you’re flexible and able to change your company’s direction and the product quickly to meet market needs. This really is the valuable part, about 25% of our current functionality has come about through this learning process. Your product improves, more in line with the markets needs and your sales pitch becomes stronger, you begin to convert more prospect to clients.

Then as you become more successful and have more clients you realise you have to maintain their service levels, and in the world of IT this is an unpredictable beast at times.

Every time Apple or Android launch a new update, you hold your breath, test, fix and deploy! In what other area do you get someone changing the rules every few months, without telling you beforehand and your customers still expect it all to work… perhaps in insurance contracts. It means you have to react instantly but that keeps you sharp… all in a days work for an insurtech start up. To put it into motoring terminology, being prepared makes it less of a speedbump and more of a gentle swerve to avoid a potential pothole.

Issue 35

As an industry we’ve been slow with technology, often because we’ve tried to implement change that benefits either insurer, broker or end customer but not often all three. This however has created ‘insurtech’ and we now need to make the most of it So clearly, it’s a bit of a roller coaster but one year on and we’ve got over forty customers putting 100’s of end clients and thousands of drivers on to an app. Day one reporting is at over 80% and we’ve now developed property, liability and travel apps.

As an industry we’ve been slow with technology, often because we’ve tried to implement change that benefits either insurer, broker or end customer but not often all three. This however has created ‘insurtech’ and we now need to make the most of it.

Working together we can capitalise.

In summary, it’s certainly not the easiest job building a start up in insurance but it’s rewarding and a great learning experience. The UK insurance market is often seen as leading the way and interest from Canada, Australia and Spain perhaps indicate that this is the case. People often decry the level of experience that we now have in the sector but the brokers we’ve met and the direction they are going in would challenge this stereotype. Thanks for supporting new ideas and here’s to the future.

STEPHEN MARSHALL ACII is the Managing Director of Insure Apps.

Modern Insurance 61

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FEATURES

Claiming for loss of earnings Loss of earnings claims are generally considered something of a grey area and an aspect of claims handling that many personal injury professionals will readily admit they struggle with. A lack of proper training, resources and support may explain why so many toil with these cases as Vitek Frenkel, Frenkels Forensics Chartered Accountants, explains. renkels Forensics have long standing relationships with a wide range of Claimant and Defendant firms, gained through over 35 years of industry service. From our experience, self-employed claimants cause the most headaches.

The voluminous and often unfamiliar looking financial documents a claimant might disclose in support of a loss of earnings claim can draw sighs from the most battle-hardened of claims handlers. Throw in the odd claim for a claimant operating as a limited company and you may find you have wandered into forensic accounting territory.

F

Having said that, it is still surprising how many people make some basic errors with the more ‘straight-forward’ employee cases. A recent analysis we carried out of insurer claims data shows the average loss of earnings claim for an employee is overstated by approximately 30%.

The result is that claimants are being under and overcompensated for their loss of earnings claims on a daily basis, in some cases by thousands of pounds. With the proposed increase of the small claims limit on the horizon, it is essential that insurers and law firms find ways to manage these claims much more accurately, consistently and cost effectively.

So does this mean we need to start involving forensic accountants on all loss of earnings claims? Certainly not. That is not a practical or cost-effective solution. While there will of course always be a need to involve expert accountants on more complex cases where, for example, the claimant operates as a limited company or a pension loss claim, these claims are typically less common. The obvious and best solution is to give legal and insurance professionals the necessary tools and training so that in the majority of cases they can efficiently produce clear and accurate loss of earnings schedules with minimal stress.

Many firms are now investing heavily in technology to help streamline processes and maximise their claims handling efficiencies. Terms like insurtech, AI and automation are the new buzzwords in the insurance/legal world and make a persuasive point of demonstrating how technology can be harnessed to produce huge time and cost savings and also improved accuracy.

Quantifying a basic loss of earnings claim for the most part relies on adopting specific formulas to arrive at the recoverable loss.

Utilising technology to help calculate a loss of earnings claim should really be a no-brainer.

This is why we designed Frenkels Calculator, to help personal injury professionals produce clear and accurate loss of earnings calculations using basic financial information such as payslips and tax returns.

Issue 35

With the proposed increase of the small claims limit on the horizon, it is essential that insurers and law firms find ways to manage these claims much more accurately, consistently and cost effectively Our web-based platform enables users to calculate past and future loss of earnings claims for both employed and selfemployed claimants in minutes. It also features an in-built Ogden Calculator, which can perform calculations using different discount rates in seconds.

We have also added a Fast-Track Calculator, which is designed for portal cases and has proven very popular with our defendant and claimant MOJ handlers. We are finding that by giving clients a simple and easy-to-use method of producing detailed loss of earnings schedules, they are settling cases more quickly, saving both time and money.

Our Calculator sits very well alongside our bespoke forensic accounting service for more complex cases, including pension losses. As such our clients appreciate having a single support service for all of their loss of earnings claims, in the knowledge that they can use our online Calculator for the simpler cases, with our forensic accounting experts able to assist on the claims that are more complex. With our expert knowledge always on hand, we provide a full service for those trickier cases where the claims handler may need specific guidance and support.

Whilst technology does certainly assist on many claims, it will not deal with every type of loss of earnings case. With our AI offering in Frenkels Calculator and our long-standing experience, our clients are assured the best of both worlds in the handling of their loss of earnings claims.

VITEK FRENKEL is a Partner at Frenkels Forensics Chartered Accountants.

Modern Insurance 63

They’re not just claims.

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FEATURES

The silent surge Insurers face the biggest spike in subsidence claims in fifteen years after the summer heatwave. Technology, social media and austerity are just a few factors demanding a more sophisticated claims approach this time around. Sne Patel, Head of Subsidence at Crawford & Company, explains. his year’s long, hot, dry summer has created one of the biggest spikes in subsidence claims, the last major surge was in 2003. In a surge year, most claims emerge in August to September. This year numbers started to rise in mid-July and by September were up above 400% on 2017.

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Hot, dry spells cause the clay beneath properties to shrink, and when variables such as vegetation and extensions are present, this can happen unevenly.

Subsidence claims are usually closely linked with the clay belt across the South East of England though this summer the South West, Midlands, North West and North East saw notable spikes.

In addition to new claims, many existing and completed claims started to show signs of movement again.

A surge like this challenges insurers, adjusters and their supply chains – and much has changed since 2003.

Tree roots remain the number one cause of subsidence. However, ten years of financial austerity has meant most councils have reduced their tree pruning programmes, allowing thousands of urban trees to grow far larger than is desirable. In fact the London Mayor is looking to increase the tree canopy by 10% as part of the ongoing strategy.

The financial crisis also depressed the housing market. Fewer people have moved home, with many instead building extensions of varying quality, bringing external walls nearer to large garden trees.

Many of these developments had not been exposed to a high-risk subsidence year until now, and insurers are likely to have entered protracted battles with some policyholders over the adequacy of their extensions’ foundations and the admissibility of claims.

Using social media, consumers can easily compare their claims with others and make angry complaints. Managing policyholder expectations and maintaining effective communication, including providing regular informed updates on claim progress, is therefore integral to the claims process in 2018.

The methods and techniques deployed in investigating, monitoring and remedying subsidence claims have also changed significantly in recent years. Physical measuring systems have been replaced with sophisticated digital tools which generate far more data on movement and other variables. Risk mitigation has also become more sophisticated, and applying the right solution backed by high quality technical advice is essential.

Today, insurers have greater responsibility for providing a solutionbased response rather than simply indemnity Insurers are often put under pressure by policyholders to underpin because they believe it is the only effective solution. In theory, underpinning can cause a multitude of problems if not required or undertaken extensively.

New mitigation systems include perforated tubes buried at depth, screw piling and injection grouting – an alternative to underpinning in which a solution interacts with the soil, turning it into a form of stabilising concrete – though these techniques are still relatively unproven in severe cases.

If the cause can be identified quickly and damage is localised, extended monitoring is not necessary. Trees on policyholders’ properties which are not subject to a Tree Preservation Order (TPO) can be removed quickly and the damage then repaired. A standard claim like this usually takes three to six months at a cost of £5,000-10,000.

If a tree is on a reluctant neighbour’s property or subject to a TPO, greater persuasive evidence and investigation is needed to prove that the tree is the cause, which can take up to 18 months. Timing is crucial here as subsidence may stabilise in the wet winter months but could return the following year if the underlying cause is not addressed.

Today, insurers have greater responsibility for providing a solutionbased response rather than simply indemnity. Having a supply chain of contractors that can respond quickly limits the cost, duration and complexity of the claim. Where TPOs are in place, early engagement with local authorities is also crucial.

All the indications are that longer, warmer, drier summers will become more common. If so, ensuring the right expertise, relationships and processes are in place to deal with higher levels of subsidence will be essential.

SNE PATEL is Head of Subsidence at Crawford & Company.

Intelligent approach

Not all claims are the same, and a triage system should be in place to identify the potential severity of a claim. Making the right decisions at the triage stage requires specialist knowledge. Get that right and the path to mitigation should be smoother.

Tree root removal, root barrier and (in extreme cases) underpinning remain the extreme forms of mitigation – though the latter is expensive (typically £25,000 to £30,000), intrusive and a last resort for only severe cases.

Issue 35

Modern Insurance 65

10 MINUTES WITH

Peter Goodright Q A

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

I have only recently joined the industry having spent the last thirty years working within the insurance claims sector, but what is immediately apparent is the change in relationships between the recovery operators and motor insurance companies.

In the past, recovery and storage was not high on the insurers agenda, the charges would be included as part of a repair invoice or deducted from salvage settlements. If was considered a fairly low cost element of the overall claim cost. There was very little if any interaction with the recovery operator. Since I have been at NWVA, it has been very encouraging to see that insurers are now engaging with us directly and forming mutually beneficial agreements, by understanding the insurer requirements and being able to provide a nationwide solution with one point of contact, Nationwide Vehicle Assistance are able to assist claims cost control.

Q A

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

By being recognised as an integral part of the supply chain by the insurers we work with, we are able to co-ordinate vehicle movements with other preferred suppliers to ensure we minimise insurer costs and help to meet customer expectations.

Q A

Who inspires you and why?

Until recently I would have listed some schoolteachers, old bosses and sportspeople, but since joining NWVA I have to say recovery drivers. These people are the unsung heroes of the insurance claims process and motoring clubs and organisations.

They go out in all weathers to dangerous situations without knowing what will confront them. They have to have excellent people skills to manage the upset, injured, emotional or angry customer, they are often the only person who will meet a customer face to face in the whole claims process so have to be aware that they are not just representing NWVA but also our corporate customers so their behaviours are very important.

Their priority is to make sure the customer and vehicle occupants are safe and then they have to deal with the vehicle itself which often makes them vulnerable themselves, it is no fun working on the side of a busy dual carriageway in the fog and rain! They do all of this several times in a shift and generally with a smile on their face and a story to tell, sure they moan and groan from time to time, like all employees, but the way they go about their task is truly inspirational.

66 Modern Insurance

It has been very encouraging to see that insurers are now engaging with us directly and forming mutually beneficial agreements, by understanding the insurer requirements and being able to provide a nationwide solution with one point of contact, Nationwide Vehicle Assistance are able to assist claims cost control

Q A

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

My old rugby teacher/coach, “winning is all important but winning within the rules and earning the respect of the opposition and your own team mates is glory”.

Q A

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

Sitting in a nice beach bar with a cold beer having just shot a 72 around a championship golf course; daydreaming in other words!

PETER GOODRIGHT is the General Manager at Nationwide Vehicle Assistance (NWVA).

Issue 35

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Allianz Engineering, Construction & Power Making tomorrow happen

Allianz Insurance plc. Registered in England number 84638. Registered office: 57 Ladymead, Guildford, Surrey, GU1 1DB, United Kingdom.

Allianz Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 121849. Allianz Engineering, Construction & Power is a trading name used by Allianz Insurance plc.

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For more information, visit us online at: allianzebroker.co.uk or contact your local Allianz representative.