The Promise to Pay

We are at the time of year when the results of the IBA Service Awards are announced in the Irish Broker magazine (April edition), and this year in no exception.  What is somewhat different is the lack of clarity on scores in the survey results.  This could be for very good reasons.

The good work done by Joe Whelan, FIMC, and his team, in collating and presenting the results of the IBA survey responses, was presented at an industry knees-up in the Shelbourne Hotel in February 2014, and we salute the winners.

As pointed out in the article (which doesn’t give the scores of individual companies) 60% represents Fair to Good, 70% represents Good to Very Good, and 80%+ represents Very Good to Excellent service. The Life sector scored 57.76% and the Non-Life sector in Ireland scored 51.65%.  An abysmal performance by any standards.

In relation to claims it says “Brokers continue to struggle with some Insurers, particularly with regard to their claims procedures and processes.  Considering this industry is in the business of paying claims, Brokers are still experiencing a poor service from the General Insurance sector.  Brokers are consistently finding that insurers are using loss adjusters to negotiate the settlement of claims below reasonable value or without any flexibility when it comes to the interpretation of policy wordings and conditions.”

What has happened to ‘the promise to pay’?  Some Insurers and loss adjusters have adopted an anti-consumer approach which leaves a very bad impression of an industry that is there to provide indemnity against losses.  Once a loss has occurred they should get on an deal with the claim and pay it with good grace.  The claim ‘reserve’ is incurred as a liability once the claim notification and preliminary estimate is put on the claim.  Any delay or dispute thereafter only serves to affect cashflow, aggravate the policyholder and the broker, and leave a sour taste.

The Financial Regulator has invoked a mandatory ‘Ethics’ module in the annual Continuing Professional Development programme for industry professionals. PLA’s are often portrayed as the ‘enemy’ or the ‘bad guys’ by vested interests, and this ‘spin’ is very unprofessional and unethical.  It can be distinctly unpleasant to witness industry peers look down on PLAs as though we are doing something un-professional, un-ethical or immoral.  Regulated PLAs are nothing more than champions of the consumer and in reality are the ‘good guys’ who have the policyholder’s interests at heart.  We claim for and  fully document, and price, visibly damaged property.  We are part of the solution, not part of the problem. Insurers have driven premium down by competing on price in a race to the bottom and treat claims as their way of saving money.  Where is the ethical behaviour in that?

It is high time the industry realised, that any ‘spin’ put on the use of loss assessors, is against the provisions of the Consumer Protection Code and should be ignored.  After all, we are all in the business of looking after our clients.   I know whose side I’d rather be on.  In recognising good service, brokers should vote with their feet in recommending insurers who honour the ‘Promise to Pay’ with good grace; and in recommending PLAs who add value to their client’s experience of the process.

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