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Claims and Brand Protection- Public liability claims

Insurance and claim management is such an old industry that it seems some people hold certain truths to be sebrandlf-evident. The way things are done are the way they should be done. Yet there is rarely (actually, more like never) any metrics offered in support of systems and processes that confound and combust on a regular basis.

We are lucky we have a number of clients who understand when they are dealing with claims there is usually a human on the other end and that companies have a responsibility to deal fairly with their customers. I can say that without exception our best customers – those who respond with care and concern whenever there is a customer incident on their premises – also have the best results – both in terms of predictability over time and in terms of lower average and overall costs.

So then why is it, when it comes to the arena of public liability claims management and specifically responding to customer incidents, we still see countless examples of companies (and insurance companies) who believe it is better to ‘let sleeping dogs lie’ than proactively managing the whole customer experience?

It may be one of several things:

  1. A misinformed sense that because this is way it has always been done it must be the best way
  2. Because a lawyer gave advice about protecting the position of the company without thinking about the customer or the brand
  3. Because of an isolated short term view of the world and reluctance to have a difficult conversation with an injured customer

We have seen this play out this week with the tragedy at Dreamworld. How could it be that a company that has customer incidents all the time can get the response to such a terrible tragedy so horribly wrong? One can only think that there was some misguided legal advice or that responding to customer incidents (no matter how grave) isn’t in their DNA. Whatever the reason, it is a failure of epic proportions.

We still have some clients who insist that they know better than us which incidents we need to address and which ones are better ignored. The reality is that in a soft insurance market you can grab some short term wins out of ignoring claims, but they come back and bite you big time when lawyers get involved and you have a hostile customer.

Our data shows that success follows companies who follow a simple process of notifying all incidents and having a system of working with a claims specialist to triage them and have experts proactively dealing with injured customers. Some of the data includes:

  1. Those that implement a proactive and compassionate call regime for injured customers can show savings of at least 40% on average claims costs
  2. Those that implement a proactive and compassionate call regime for injured customers advance their claim development (and claim predictability) by over 25% each year over the first 4 years. So effectively claim numbers always level up in terms of a fully developed year equaling 100%. The problem for those who think not dealing with it is the best way of dealing with it is that over years 4 to 7 after the risk period, things come back 40% bigger and in a wave that creates a crisis that impacts insurance premium affordability.

Our evidence shows that if 2 companies had similar levels of claim numbers and exposures, but one is proactive and deals with their exposure, and the other adopts the ostrich pose of ignoring the risks, their incurred losses from a one year period (reserved and paid) can be expected to track out over 6 years as follows (assuming competent reserving that reflects risk).


1 post period 2 3 4 5 6
Proactive 300,000 500,000 750,000 870,000 950,000 1,000,00
Ostrich 140,000 280,000 420,000 980,000 1,330,000


These figures are based on actual performance of portfolios we manage, or where we have had access to claim stats.

So I would be very wary of any person – especially those who don’t handle claims on a day to day basis and haven’t done the metrics – who advocates a policy of ignoring your customers after they have had an accident. Why? Because they may be able to demonstrate short term cost savings, but ultimately our evidence shows that those short term gains will translate into a haemorrhaging of cash in years 4 to 6 after the period, with attendant detrimental impacts on insurance credibility and affordability.

Moreover, it completely ignores the very real lessons learned by Ardent Leisure this week. When it comes to customer care after incidents, it is really important to have the right approach. Putting the customer first is an initiative that drives culture, and when you start looking after your customers who fall and suffer minor injuries, you will be in much better position to deal with that big problem claim, if and when it arises, as your focus is on the customer.

The more we do claims the more convinced we are that protecting your brand image by having a customer focused incident response plan can not only save you brand headaches but it can also save you money.  I think it was George Bernard Shaw who said “life’s great truths start off as blasphemies”. When insurers catch up with data they will understand the truth here – ignoring opportunities to engage with an injured customer is bad business.


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