Agents & Cover Holders
Underwriting agents and coverholders exist to provide sharper services to niche markets in insurance. The expertise in agents often lies in technical underwriting and their ability to provide quick turnaround and meet their customers’ expectations.
Claim management is generally not a core competency of an underwriting agent or coverholder. Claims can be a distraction and the technical and reporting requirements can often be beyond their capabilities.
Proclaim provides claim services for a number of Underwriting Agents and coverholders that provides:
- High levels of technical expertise in the handling of claims
- Legally qualified account managers to provide strategic management and advice on claims issues
- Experts across all jurisdictions in Australia with tailored solutions in States like Queensland and NSW where specialist knowledge is critical
- Reporting by year of account that meets underwriter requirements
- Reserving and financial transaction compliance
- Full escrow accounting and GST reporting
- Data mining and risk management advice
- Broker and staff training
All of our clients in this area who outsource their claims see the consequent benefits in
- Better claims results – better service, lower costs and lower loss ratios (so greater profit share)
- Increase in support from brokers
- Release of time to concentrate on underwriting and developing the business
What is more, we are independent of the broking and underwriting processes, so can provide an objective service without conflict or compromise.
Coverholder case study
- Liability
We have seen several cases where a coverholder has been managing the claims process, but in reality the claims have really been managing them. In one case the Claim Manager was sending every claim to lawyers but not requiring any meaningful advice on reserves or on the strategic control of the claims. The claims would tend to meander, many under -reserved. Claims bordereaux were not up to date and in many cases instructions were not being sought for claims above authority as they were under reserved. The reality is if the underwriter does not conduct a claims audit, these situations tend to linger, as the coverholder does not really understand the technical or reporting deficiencies on the claims side as they are concentrating on retaining and winning business. If reporting is sporadic and inconsistent, how can they be expected to understand the problem?
In this case the coverholder was astute enough to recognise there was an issue and appointed Proclaim to manage the claims. We immediately instigated new procedures, including a review of all claims that needed to be reported to London. We did a strategic review of all claims with updates to reserves and strategy including recommending settlements of claims where it was cost effective. We created a monthly reporting regime so the coverholder and underwriter were dealing with the same required information. In a matter of months we were back in control of the claims with consequent improvement in some of the key measures in managing claims to better outcomes - Property
A coverholder was managing claims for their London underwriter when there was a sale of the local agency. Existing capacity was reallocated to a new agent but the existing claims and claims to come from live policies in the current year of account were left hanging.
The claims assignment was split into two projects:
- Runoff of existing business for old coverholder
- New claims for new coverholder
As we have established procedures for Lloyd’s business and significant property resources within our operation, we were able to quickly establish a concept of operation for the two different projects – including separate systems and reporting and separate loss funds for escrow accounting.
We established service standards that exceed the Code of Conduct and created a measure (loss adjustment expense as a percentage of settlement) to ensure our performance could be measured. 5 years down the track we are still effectively managing claims for this syndicate and they continue to expand their involvement in the local market.
Chaucer Drew Fenton, Coverholder, CPA Scheme – “We have been working successfully with Proclaim and the CPA for over two years now. We like their model of proactive and consultative claim management, and recognize they have the depth of technical expertise and commercial nous to really add value to our program. The results are outstanding, they recognize when to quickly resolve things and when further investigation and support is required. They also provide an outstanding help desk service to accountants to help them risk manage potential exposures.
All in all, it assists us in our relationship with CPA and saves our underwriter money”.