Half of commercial claims are disputed
As a broker, how much time do you ‘give away’ managing clients who have claims disputes with the insurer? It’s believed that almost half of all commercial insurance claims are disputed. As the intermediary, brokers can find themselves burning valuable hours as a go between in these situations.
New legislation to tackle misrepresentation
A new bill set to update century-old rules on contracts between insurers and businesses is currently undergoing parliamentary process. The new legislation aims to tackle misrepresentation in business and other non-consumer contracts, and also address insurers’ methods for handling fraudulent claims.
Hopefully this will go some way towards shifting public perception of the insurance industry which has a poor reputation among many for settling valid insurance claims promptly and efficiently. As a broker, you may find that it’s the perception and image of your business that takes the hit, as business owners and managers typically feel that they’ve bought from you on the basis of your advice and therefore attribute some of the blame with your business. This is often unfair, but brokers will typically find themselves trying to ‘do the right thing’ and assist in getting a difficult or complicated claim managed to a sensible conclusion so that their business isn’t adversely affected by the process.
Under the new legislation, business policy holders will be obliged to fulfill their responsibility of ‘fair representation‘ of risk, and insurers will be equipped with various remedies should this duty be breached.
Home-grown success story
The economic secretary to the treasury, Andrea Leadsom, has described the UK’s insurance industry as a “major success story”, also stating that bringing insurance into the 21st century will promote the continued growth and development of the industry which supports 300,000 jobs in the UK.
Moving with the times
The UK Treasury has supported the bill, stating that this “more modern legal regime” will benefit both insurers and businesses by “increasing transparency and certainty over the rules that govern contracts between them and reducing legal disputes over time”. As a broker, the bill ought to be good news, too. It should act as a clear pathway that reduces time spent on managing disputes.
The Treasury expects UK businesses to benefit by £100m over the next decade as a result of lower litigation and transaction costs.
The several years of consultation and recommendation leading up to the bill’s submission looks to have paved the way for a speedy passage through the legislative process. However, with the 2015 general election close at hand, some bills may be subject to last minute revisions which may cause some delay. From the point of view of the UK Treasury at least, the hope is that both sides of the house will help this new bill on its way to implementation and, in doing so, promote the UK insurance industry back into a competitive position in the world market.
We know that clarity is vital to ensuring the best service. Claims often arise because of misunderstandings at the point of sale of a policy. That’s why the Quotall system helps insurers to collect all the information they need through our unique product build service.
At Quotall we believe that the automation of insurance transactions through e-trading will aid in tackling the problems associated with misrepresentation by collecting and delivering information consistently, from the point of policy inception all the way through to renewal. Combined with the brokers ‘real world’ knowledge of their clients and prospects, we’re working to ensure our platform assists brokers in minimising those misunderstandings at the point of purchase – leaving both the customer, the broker and the insurer in a clearer position, which ultimately saves time and money.