My biggest disappointment about our industry is that we never seem to be able to wipe the perception that when it comes to our moment of truth – claims time – we aim to take the fine print and avoid paying. One of the reasons I started Proclaim was to try and elevate claims so it was a great place to work and was at least on an equal footing with underwriters and our service providers. I got sick of hearing how claims people ‘had been promoted to underwriting’. I think things have progressed, but yet when I meet people – even people from the industry – I still get the same cynical questions and comments around not paying claims.
The absolute truth is this – we aim to pay valid claims. In fact, our purpose at Proclaim is aligned with helping people, and that means paying claims. No-one is rewarded for denying a claim in our business. Yes there are a small minority of claims where a policyholder either has not paid premium for the risk, or are being opportunistic. If we paid all these claims premiums would not be sustainable. There needs to be some verification of loss for fairness to both sides of the transaction. However, these cases are a tiny proportion of the claims we get. Denials make up less than 1% of our claims – but create 90% of the noise.
So while we, and others in the industry, labour hard to change the perception of insurers, we have companies like AAMI perpetuating the myth through negative advertising. By highlighting poor claims conduct of competitors all it does is push the stereotypes and make it harder for the industry to change that perception.
Yes we acknowledge that there were some awful stories coming out of the Royal Commission that tainted insurers’ claims conduct. And yes, all insurers admit that managing claims is challenging, and that during Covid we all faced what seemed a mountain to climb with diminished resources and increased catastrophes. We ourselves had huge challenges – especially in the early stages of Covid – with general market delays in funding loss payments that meant we had many payments we wanted to make but couldn’t. It was tough. But it was tough because we wanted to help, and we are in the business to pay claims.
So it’s really galling to have AAMI advertise so irresponsibly. To the ICA I ask, is there something you can do to call out this conduct? AAMI might as well be in an industry where it is every man for himself – pursuing competitive advertising that does nothing for the image of the industry at large.
Come on AAMI, you can do better. Take some of the millions you spend on advertising and push it to creating goodwill for you and the industry. Help us to change the stereotypes, and be part of a movement that creates positive purpose for insurers. We are a great industry, providing a great service – modern economies cannot function without insurance. Claims is where the rubber hits the road – yes it is the proving ground for the promise that was purchased. But it’s time we talked about the 99% of claims AAMI and we all pay. Time we all worked together to create the change in perception so people talk the good stories about insurance at their next night out. I remember when I was at Chubb we had a theft claim early in the development of the Masterpiece policy. The insured was crestfallen as the robbery was discovered on a day they were having an important dinner party, and all their electronics had been stolen. We went to work and organised brand new B and O equipment including the latest stereo that was installed that day. Now that’s something worth talking about.
We are an industry that allows people and companies to accept risk and function and grow, and we come to people’s aid when they most need help. There is a great story in that. Come on AAMI!