Time to go back to basics on claims

12/08/2010

How refreshing to see Adrian Brown, RSA UK CEO, openly express the view that insurers should actively seek to identify, recognise and pay claims that could properly fall under employers’ liability policies issued, however long ago.

(Read ‘View from the top: Time to fight our corner’.)

Even better that he is prepared to commit to assisting potential ultimate claimants to identify relevant coverage and ensure their claims not only receive attention but are met promptly and to the fullest extent of the coverage concerned.

One might reflect that this view was once â albeit more than a quarter century ago â more or less the norm, not only in respect of EL but for the majority of insurance classes.

Regrettably, as the public is well aware, it has become common practice for insurers to focus on reduction of the amount paid, or even avoidance (in whole or in part) of perfectly justified claims. Responses from claims personnel often show them to be ‘educated’ accordingly. We even see free and widespread use of the term ‘fraudulent’, emotively but without merit, in reference to claims lodged at a higher figure than eventually paid by the insurer. In the vast majority, there is absolutely no fraudulent intent whatsoever.

Yet, we do not see identification of the numerous cases where the reduction effected by insurers is without justification, or results from manipulation of the policy wording to something quite unrecognisable from what the purchaser expected. Nor do we see insurers including in settlements all items or elements to which the coverage should apply, but which the insured has omitted, by accident or ignorance, in formulating its claim. However, we have seen the unedifying spectacle of insurers and loss adjusters proclaiming that the “duty (of the adjuster) to its principal (the insurer)” is to minimise amounts paid and at all times favour the insurer’s interests.

If only Mr Brown’s sentiments could find ready propagation throughout insurance. Would a return to the fundamental principles of insurance, with respect for the policyholder and the underlying intent of the parties, be so terrible? Or would it help to restore the badly tarnished reputation of the industry and even help regenerate honourable conduct of a kind that might eventually again justify reference to insurance as a profession.

Ian Drewer
Chief executive, Strategic Risk Partnerships

Original Article: Post