Most insurance premiums are related in some proportion to the claims that are made on an insurance policy, as well as the general claims pattern that the insurer has experienced. Clearly, for companies that have a policy with a high number of claims this article will resonate more strongly but many companies have at least one policy where they would like to take action to reduce the claims and benefit from the associated reduced premiums.
 
So how can you reduce the frequency and severity of claims? There are four steps to really get a grip of your claims:

1. Refreshing the claims experience - If your claims are not being properly monitored and refreshed, this will affect what is known as your claims experience – essentially a list of claims you have made. If this is the case, older claims will remain listed as outstanding with values against your policy. What this means in brief is that when an insurance company estimates how much they need to set aside in reserve, should a claim need to be settled, they can wrongly use out-of-date claims to reach the claims experience total figure. So, if your broker works with your insurer to make sure that your claims history is up-to-date, some claims could potentially be removed and your experience reduced accordingly, which will in turn reduce your premium.
2. Challenging the estimated value of outstanding claims - Insurers generally use tables and other data to estimate the value that a claim will be paid and settled at. This approach is difficult to counter, but challenging them, based on knowledge, experience and data, is not impossible. For large or unusual claims, in particular, insurers may set a reserve that you believe to be unreasonable.
3. Analyse the claims you have made in the past so that you understand your problem areas - Usually there are trends within a claims experience that alert you to problem areas that can then become priorities to tackle.
4. Make positive risk management interventions - Once you know where your problems are, tackle them in priority order for the quickest results. Your broker will be able to help you in terms of risk management, so if you need to revise your processes, you can ask for assistance.

A broker’s role is to control and monitor claims for their clients and also to improve the claims experience so that when premiums are being set at renewal time, they are set against an accurate backdrop of ‘real’ claims with properly estimated values.
 
“I am often surprised and disappointed that some of the companies I talk to receive a very limited service from their broker and insurer in managing and understanding their claims. I have personally been involved with one new client where the insurer had failed to record the nature of the claim (shown as Not Known!) on 293 occasions (which equated to almost 20% of all losses) across 5 years.

This despite the claims having been paid! How can a client possibly understand their problems and tackle them if their broker or insurer doesn’t record claims accurately? With a lot of pressure and persistency, we were able to reduce this list of uncoded claims to just a handful of very old claims where the file was no longer available. Since then we have started a risk management programme to address the issues identified with the client” Alyson Pepperill, Client Projects Director, Oval London.
 
Claims analysis is a key skill that Oval cultivates within its service teams. Coupling this with expert risk consulting results in a very powerful solution for clients. Oval has had a great deal of success in working with new clients to tackle such problems.

If you would like to take steps to take control of your claims and reduce your future premiums please contact Alyson Pepperill on 07824 492665 or email alyson.pepperill@theovalgroup.com