13 October 2011, LONDON – The London insurance market’s claims service has improved year-on-year since 2009 according to the latest study from leading research company Gracechurch Consulting.

Data from Gracechurch’s latest study reveals that claims service has improved gradually since 2009.  The research also reveals that there is a group of 7-8  high performing larger Lloyd’s insurers whose claims service is improving much more rapidly than the average;  in fact without these the performance is fairly flat.

The finding is significant in that it is based on over 6000 individual broker service ratings collected since the beginning of 2009.  The benchmarking study is used by many of the leading insurers to help in figuring out howto improve claims service.

The study also shows that a gap has opened up between Lloyd’s and the companies market with Lloyd’s on average outperforming companies on service.

The study’s findings were welcomed by the CEO of the Lloyd’s Market Association, David Gittings, whose organisation has been at the forefront of efforts to boost claims performance in the Lloyd’s market.

Gracechurch notes that more and more Lloyd’s insurers are switching on to delivering better claims service for brokers and this is driving improving standards.

Ben Bolton MD of Gracechurch commented:  “When we first started measuring London claims service in 2005 it was distinctly mediocre;  now looking at 2011 data an increasing number of insurers have the majority of their brokers ratingtheir service as‘excellent’ – that represents exemplary service for any market and shows what can be achieved.”

But Bolton warns:  “The average improvement is good news but service improvements are not consistent across the board and there is still a rump of poor claims service providers who seem reluctant to accept thatgreat service is a vital component of London’s high quality reputation; this is creating a real drag on the pace of improvement.  The other issue is that insurers are often too modest about publicising good performance.”

David Gittings of the LMA commented;  “This is again positive news for Lloyd’s on claims – the study also highlights positive acceptance of ECF as delivering real benefits for brokers and client,  showing that process improvements are contributing too – we must though keep up the pressure to make sure that we are the leading market in claims service – and recognised as such.”

Claims performance in the London market has been the focus of a number of initiatives including ECF2 and the Market Processes project.

Contact:

Gracechurch Consulting:  Ben Bolton bbolton@grch.net  020 7002 7679  www.grch.net

Ben Bolton MD of Gracechurch will be taking part in the panel session at the London Market Claims Conference 2011  (www.the-insurance-network.co.uk/lmc2011.aspx). Claims service is increasingly becoming a differentiator for P&C insurers;  technology and process change, coupled with improving personal claims service for brokers and clients is supposedly improving the reputation of individual insurers and the market as a whole.   This event will explore the current and future landscape of claims in the London insurance market, examining ‘initiatives and innovations that will improve claims process and performance for the industry and clients alike.’  Ben, along with other leading London Market figures, will be commenting on and discussing issues around claims performance and in particular the most effective metrics for measuring claims teams’ performances.

We’ve been working for the past five months on a major new study in the insurance sector, Underwriter Performance Monitor.  This substantial and high quality study will create understanding of London Market underwriter performance overall plus drill-downs into business classes.

The study uses advanced methods to understand what really drives performance and to show how service links to the the business that underwriters are shown by brokers.

One of the challenges for our researchers was to understand what drives performance – without this the research would have been difficult to use practically.  We have however found strong correlations between service performance, advocacy and future spend – so much so that we believe that this will be groundbreaking research for underwriters. And those who act on its findings will be the ones who successfully grow and thrive.

The study shows service performance is strongly influenced according to the ability of underwriting teams to create durable relationships.

There are substantial opportunities for commercial insurers to improve service and key account management, and to ensure they see the quality business from brokers they trust, no matter where they are in the market cycle.

The study is being delivered to our foundation clients in the last week of March and will be updated toward the end of the year.  From 2012 it will become an annual study, with significant scope for expansion into new geographies and specialist business classes.

Does London have a future?  A challenging question. And one that our guest speaker, Stuart Popham, addressed at our 4th Cellar Club event.

Stuart entertained us with a brilliant and thought-provoking description of London’s path to success – from its  founding by Brutus of Troy – to its present day profile as a leading services centre.  The statistics are compelling;  85% of London’s workforce is employed in the services sector, the highest of any capital city in the world, 100 of the Fortune 500 companies are based in London, as are 4 of the 6 largest law firms and 2 of its universities are in the top ten in the world.  Notably, two million of the 7.6 million residents were not born in the UK –  so London is truly a hub, a gateway to, and magnet for, the rest of the world.

But is London’s success sustainable?  Stuart posited two future scenarios;  the depressing first, a City in decline, with immigration restricted, tax breaks removed and Financial Services companies gradually drifting away to other more welcoming locations around the globe:

“A strand of the fabric of London is pulled and the tapestry of the talent starts to trickle away and buyers and sellers start to set up in another place as they try to attract customers…”

The second more positive scenario is of a City which recognises and promotes its strength as a services hub – not in the commoditised areas (we can’t compete with the workforces of India or China) but a centre of excellence for setting standards for the rest of the world in key services sectors – engineering, law, accounting, media & creative and financial.  Achieving this will enable London to continue to attract the best talent and create demand for the workforce on projects all around the globe.

Stuart prompted the audience to discuss  likely outcomes, but before doing that he prevailed upon Government and other opinion leaders to recognise and understand the services industry and not to opt out of vigorously competing with other Cities who want to take what London has.

Stuart’s reputation precedes him and this subject obviously appealed,this being the best attended Cellar Club event yet. It was again held in the Vaults at the RSA – a venue appropriately redolent of London’s history.

Stuart Popham has been described as ‘the most connected lawyer in the City’:  he recently retired as senior partner of Clifford Chance and is currently Chair of TheCityUK, which represents the UK financial services industry.

The Cellar Club is a regular networking event run by Gracechurch, attended by opinion formers and senior decision makers from major financial, professional and advisory businesses.

It’s not always easy to position professional services businesses…

…maybe we’ve been missing a trick?

Last night we hosted the third of our Cellar Club events – this time in a new ‘Cellar’, the rather impressive vaults at the RSA.  For those of you who asked, the vaults were originally designed as river-front warehouses, presumably by John Adam himself.

Despite our own team being decimated by the rather nasty ‘flu virus going around,  we had a good turnout with colleagues from law, insurance, property, recruitment, accounting, media and financial services represented.  Everyone I chatted with seemed to be busy and cautiously optimistic about the business environment.

Giles Watkins*, from Concentium was our speaker.

His excellent talk on privacy matters was a relaxed (but slightly scary) walk through the world of privacy – in particular how businesses need to be aware of and prepared for the risks of privacy breaches and the increasing vigilance and often severe responses of lawmakers  to such breaches.  Giles cited a number of recent examples of businesses sustaining substantial fines and reputational damage following  almost ‘accidental’ leaks of customer information – incidents that could, seemingly happen to any business at any time.  He also pointed out that there is little consistency across jurisdictions as to how these breaches are regarded by law makers.

Giles finished on a positive note by saying that he believes that ultimately the approach you take should be common-sense based but that businesses can benefit from being prepared through increased brand trust and capability for dealing with complex data issues in a more innovative way.

Thank to all for coming:  our next Cellar Club event will be happening in March 2011 – details to be announced soon.

Ben

*Giles recently founded Concentium, a boutique advisory firm operating on the boundary of business and technology helping organisations to close the chasm between the two. Before Concentium, Giles had a 21 year career in top-tier consulting with Ernst & Young, founding and leading Ernst & Young’s Technology Due Diligence and Post-Transaction Advisory practice, which became the largest such practice in the world.

A big thank you to Tony Angel for leading the conversations at our first ‘Cellar Club’ networking event last night. We all enjoyed his talk on ‘Trust after the banking crisis’ and the difficulties we now face regaining and maintaining trust in the post credit-crunch environment.
Of particular interest was his list of seven points to help organisations regain that trust from their customers and employees. Key to these were exhibiting transparency and integrity, backed up by good corporate governance and regulation.
The other interesting point which emerged from a comparison of his times at Linklaters and now at Standard & Poor’s, was the relative involvement of Partners when compared to the Board members at a corporate. It seems that Partners feel more at liberty to challenge the senior team on issues concerning the running of the firm than do their corporate counterparts. While I am sure there were times when these challenges were awkward to deal with, Tony did comment that it gave him an excellent all-round view of the business at Linklaters.
We’re all looking forward to the next Cellar Club in July and hope you are too!?

“Harry was used to spiders, because the cupboard under the stairs was full of them, and that was where he slept.”

The Dursleys, afraid of Harry Potter’s magical powers, forced him to sleep under the stairs.  When at ‘11 years of age’, he broke free to attend Hogwarts he was amazed to discover his fame…and potential.

Like Harry Potter (but a bit older than 11 for the most part), commercial claims teams have, to a large extent, been kept hidden (sometimes literally), with insurers being fearful of showing too much of the ‘negative’ side of insurance.

Now, however, commercial claims is emerging from the shadows and, if the opportunity is seized, has the potential to change how insurers are viewed forever.  Hiscox has already used claims service to create a compelling and differentiated positioning around its high net worth segment product (“as good as our word”). 

Why have most commercial lines insurers kept claims under wraps?…

Read the rest of this entry »

It seems like a good time to ask.  Most of our clients are beginning to emerge from recessionary trauma: intact but trimmer.  During the tough times, we have all been glad of any work to come our way.  But now there is a growing sense that rebuilding requires focus and that the focus should be on our most important clients.

The problem is that very few firms had well run key client programmes before the recession – even fewer now.  Back then, the obstacles were largely the result of success.  We were all too busy and making good money without the additional burden.

Times have changed. We need a programme that works, and window dressing to tick the “key client” box will not suffice.

There are many reasons why key client programmes fail to deliver.  In a moment, I’ll reflect on our view of the key ingredients for successful programmes.  First though, an observation- something strange has happened!

Most key client programmes fail because they become, or even start as, a burdensome process which fails to bring the client’s voice into the organisation.  In the end, if your key client programme doesn’t make your clients feel more valued, it’s not working.  Numerous clients tell us just that.  They are indifferent to or oblivious of their advisers’ key client programmes.

Here’s the weird thing.  Many of those self same firms also conduct some sort of client research – not always good quality and too often compromised because it’s not independent – but nevertheless they do it.  Somehow the feedback doesn’t link up with the key client process.  They are treated as seemingly different things.

So let’s tear up the old way and put in place some new wineskins here.  The figure shows what we have in mind.

Develop an approach where the key client programme drives proper intelligence gathering.  Part of that (though by no means all) should be independent feedback from the client.  That feedback should be giving the key client team clarity over:

These questions will not be honestly answered if it’s someone within your firm asking them.

And getting the feedback itself is not sufficient. Your firm needs a means of engaging the client team and doing things differently and better than your competitors.

And so our view of the critical success factors:

It’s a short list – and to deliver to it is a longer list of activities. 

But looking at that list, let’s ask again the question we started with:  What state is your key client programme in?

An extract below from one of the topical questions on our Claims Performance Monitor.

Regarding how AIG UK’s name change (to Chartis)  is going down with London brokers.  

There may be some learning here for those who are trying to rebuild trust with business partners.  Maybe a re-brand of RBS will do the trick? I doubt it somehow.

The point about losing global status is obviously important, however one could argue that was a lost cause when AIG was bailed out.

Also, those who say that the old AIG culture will prevail may well have a point – we’ll check back in a few months…

AIG name change presentation.pdf