The problem: Currently for some insurers over 90% of TPD (Disablement) claims had legal representation when lodged. These claims take twice as long to resolve as those without legal representation.
The ANZ solution: an industry funded independent service to assist claimants who would otherwise go to lawyers.
Is this really tackling the inherent problem? I remember Peter Gordon (ex Slater and Gordon partner) once said that if companies and insurers managed their claims well that he wouldn’t be required. The whole ‘keeping the bastards honest’ line from plaintiff law firms arises as a direct result of processes within companies that create a lack of trust. In financial services, trust is key.
It may be over simplistic, but we’d suggest the problem that these companies need to tackle is why they are having 90% of claims come with lawyers attached in the first place. Is it possible to have a service that is not adversarial and comes to be trusted by claimants? Would this improve the current process?
When we started managing liability claims many of our clients had trust issues with their customer base. As a result, there were a high percentage of claims that came to them with lawyers involved. These cases took longer to resolve and attracted significantly higher costs. By simply swapping the focus of the model from one where it was suspected every claim was fraudulent and ought to be resisted (the adversarial model) – to recognising that the majority of claims were genuine and ought to be treated as such (the compassionate approach) our clients were able to significantly reduce the percentage of claims with lawyers and also cut significant expense from these programs.
I wonder what an industry funded service could have offered in our clients circumstances. While the life industry may differ, I see the issues – and opportunities for the industry – as being similar to our experience. I think an independent service wouldn’t address the main issues around the style of claim process. Our experience is ample evidence that an adversarial claim process is the problem, and overlaying an independent service for claimants won’t address that issue. The solution lies in the customer experience – and if you can address that experience through a proactive and compassionate claim service, you will regain the trust of your customers and far fewer claims will arrive with lawyers attached.
*(this article arises from the Parliamentary Joint Committee Enquiry into the life insurance sector, an article in yesterday’s Financial Review quotes ANZ (wealth arm) as suggesting there is a need for an independent funded industry service to assist consumers in making claims.)
Written by Jon Broome