Let’s Talk: Global programmes and claims management
First published in Commercial Risk Europe.
When a risk manager buys an insurance policy, he or she is buying a promise to pay valid claims but also in some respects they are putting their reputation on the line. So if claims are mishandled, serious problems can arise between risk manager and insurer. These problems can be exacerbated in global programmes that cover numerous and often complex territories and legal environments. But risk managers, their insurers, brokers and claims handlers can work together to ensure the process runs smoothly. Emmanuelle Martin, XL Catlin's Claims Manager for France explains how.
What can risk managers and their insurers do to make sure that claims in global programs are processed smoothly?
Global insurance programmes are a great way for risk managers to secure consistent, and compliant multinational insurance coverage but this can be undermined if communication channels are not open. Problems with claims can arise if communication breaks down - either between the insurer and the broker, the insurer and its client, or between the insurer and its network or network partner. The challenge for the insurer is to be able to manage claims uniformly wherever the programme applies, regardless of whether they have an office in that country or whether they are working with a partner.
Where we do not have an office, we choose to work with local partners.
To achieve this, insurers of global programmes need to have a good network and excellent relationships with their local partners, such as insurers, surveyors and lawyers. When a claim occurs, the master claims handler, who's a central point of contact for the risk manager, must be extremely proactive - and also reactive. It is also very important that insurers have relationships with local experts that understand local customs. Insurers cannot simply impose their usual method of settling claims onto local cultures - instead they should work with local experts to make sure that local sensitivities are not ignored. This can help ensure that claims are resolved swiftly and successfully.
Transparency is often said to be the main contributor to a successful claims process - what does this actually mean? Who needs to be transparent about what?
Everybody has to be transparent. The local subsidiary of the client has to be transparent, the head office of the client has to be transparent - and us too; the insurer has to be transparent. We, the insurer, must be accountable for the way we handle a claim and be able to demonstrate why we are nominating a particular expert or taking a specific action.
Technology can help with this. If used effectively, along pre-agreed guidelines, information on changes in risk exposure and the status of claims can be communicated in a consistent and transparent manner. Using technology so that clients can track all open claims, in real time, 24/7, no matter where the claim occurred, gives clients a clear overview of their claims picture worldwide.
But tools are only one part of this - you still need clear and regular communication between all parties involved.
How can the communication process between risk managers and insurer be improved to ensure a hassle-free, conflict-free claims process?
Insurers must make clear in their instructions to risk managers how much, and what type, of information they need to receive on claims. Then the master claims handler will communicate those instructions to local claims handlers - before the program is implemented. That way, local experts are aware of what is expected of them should a claim occur.
Where we do not have an office, we choose to work with local partners. Getting this partnership right is critical, ensuring they are on-board with our claims-handling standards, and we have a process in place to minimise any delays caused by the use of two different systems. This work is ongoing to make sure that standards are consistent, because ultimately you are only as strong as your weakest link.
How could risk managers, brokers and insurers collect data more effectively to smooth and speed up the claims process?
Insurers should make sure that their brokers and local partners understand what data and information they need. And risk managers must make sure that local subsidiaries have clear instructions about the quality of data required. If they have a local office, insurers can ensure that data is collected in a uniform way. If the insurer is working with a network partner it can impose their data collection standards on those local partners.
Before we sign a contract with a client we do a lot of work with the risk manager to understand what their expectations of the policy are. Open and clear communication throughout the process is the key to making these programmes a success for all parties involved.