Having an insurance broker advise, guide or manage the claims process is closely linked to satisfaction with the experience, according to a recent report based on a survey of Australian small businesses. This trend has strengthened over the past few years in parallel with the hardening insurance market and greater claims scrutiny by insurers. We look at some of the factors involved.
The 2021 Vero SME Insurance Index finds that broker clients are more satisfied with their claims process than business owners who buy their insurance direct. Specifically 72% of surveyed broker clients who made a claim were satisfied – an almost 20% increase since 2019 – compared to only 37% of direct claimants, whose satisfaction levels dropped by 10% over the same period.
72% of business clients with brokers were satisfied with claims
vs 37% of businesses managing insurance directly
Whether the broker provides input and direction while the client manages the process themselves or takes ownership over the entire claims process, when a broker is involved satisfaction tends to be considerably higher and the claims process is seen as being less complex.
Generally almost half of broker client SMEs (48%) reported that they managed most of the process themselves with some advice and guidance from their broker, and almost the same percentage (45%) had the broker handle the claim for them, while for 7% their broker wasn’t involved at all.
How insurance brokers can contribute to the claims experience
In the current climate, with the La Niña weather conditions driving claims for storm and flood damage and the uncertainty around COVID 19 business interruption claims, insurers are requiring more detailed information. The level of proof around a claim is a lot higher than it was previously, and insurers are going deeper into confirming indemnity and the amounts involved, Gallagher Head of Claims Adam Squire advises.
“There’s a lot more micro-analysis than we’ve seen in the past. The work brokers have to do to get claims paid has certainly increased, both in terms of technical argument needed as well as the time required. Often an insurer may look at a claim in a certain way as that is how they have been trained. A claims professional is a broker who is there to help the insurer claims team to see that there may be a different way to look at the claim.”
This is why a broker’s experience and understanding of claims scenarios can be invaluable in presenting a positive case and achieving a timely resolution.
Collaboration with their broker highly valued by SMEs
The collaborative approach to insurance cover, where the broker provides expertise and explains the options to their clients, is strongly valued by business owners, who express significantly higher satisfaction levels than those who don’t gain this collaboration from their brokers.
Around half (51% ) of SMEs that have a collaborative relationship score their broker 9 or 10 out of 10. Getting help to understand a policy and its wordings (such as inclusions of cover, limits, conditions and exceptions or exclusions) ensures business owners know from the outset what is covered in the event of a claim. This enables clearer understanding of the business risks that need to be managed, and of the records and paperwork required to support a claim if the situation arises.
Satisfaction levels are also linked to the value-add services that brokers provide for their clients – such as in-depth risk analysis and information, and advocating on the client’s behalf with insurers. Service is a very important part of the relationship.
Gallagher claims support is part of our service
We are claims advocates, ensuring clients’ policies respond as effectively as possible. A national team of 50 claims professionals operates in five capital cities and supports 30+ branches and industry specialisms.
The team ensures claims are actioned quickly and, based on complexity and need, assigned to the right person and optimum process. The client’s assigned claim manager remains in continuous contact with both the insurer and client to ensure the best achievable outcome.
Gallagher provides insurance, risk management and benefits consulting services for clients in response to both known and unknown risk exposures. When providing analysis and recommendations regarding potential insurance coverage, potential claims and/or operational strategy in response to national emergencies (including health crises), we do so from an insurance and/or risk management perspective, and offer broad information about risk mitigation, loss control strategy and potential claim exposures. We have prepared this commentary and other news alerts for general information purposes only and the material is not intended to be, nor should it be interpreted as, legal or client-specific risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. The information may not include current governmental or insurance developments, is provided without knowledge of the individual recipient’s industry or specific business or coverage circumstances, and in no way reflects or promises to provide insurance coverage outcomes that only insurance carriers’ control.
Insurance brokerage and related services to be provided by Arthur J. Gallagher & Co (Aus) Limited (ABN 34 005 543 920). Australian Financial Services License (AFSL) No. 238312