View from the Top: The punchline? ABS is no joke

The insurance industry is entering a new era, forging closer relationships with another market. But while the insurance and legal sectors have been closely aligned for some time, there is a big difference between working with a law firm and owning one. Now that many have finally taken the plunge, what are the pros and cons?

The greatest opportunity lies in tightening up the claims process to the benefit of all parties – the customer, the insurer and the intermediary. Over the years, as more organisations have entered the mix, the claims process has become increasingly complicated and time consuming, resulting in additional costs and there is scope for big improvements.

We’re not lawyers, but we understand what customers need. By working closely with a law firm we can simplify the customer’s experience, and, by implementing straight-through-processing, help the insurer. The goal is that the entire process will become less adversarial and significantly more efficient.

Partners, underwriters and customers are seeking deeper relationships and a fuller product offering, which promises opportunities. But where are the risks?

One obstacle is the long-standing lack of trust surrounding claims. Historically, the insurer has been concerned about the artificial inflation of costs, believing customers were being encouraged to claim for more than was necessary. Too heavy a focus on the consumer could increase costs for the insurer, while swinging the other way detracts from the customer experience and limits access to justice.

The success of a new approach hinges on demonstrating tangible improvements for the customer and insurer alike.

The handling of the integration of the law firm is also a potential risk area. In order to drive real innovation and great, sustainable value for all concerned, the key for us as a new ABS parent is to work with Minster to gain an understanding of the operating model and the opportunities it presents our customers and markets.
So, back to the salesman and the lawyer. With good planning and management, the future of claims will be far from a joke.

David Downie, group director, legal services, BGL Group

This article was published in the 11 July 2013 edition of Post magazine.