Friday, December 6, 2019
Broker Focus interview with Jason Tripp
Q. What have been some of the biggest challenges in the broker market over the last few years, and how have brokers responded to these?
The challenge for brokers is how they distinguish themselves from their competitors, particularly where a large proportion of their business comes from price driven aggregator sites.
The most competitive brokers build a customer proposition around their strengths in niche markets and forward thinking brokers also focus on the entire customer journey, building their specialism into the experience customers receive at the point of claim. If the customer has a specialist vehicle, for example, then they want that to be recognised – perhaps with specialist repair facilities or suitable replacement transport, but also in respect of the expertise of the claims handler. Connecting up the claims experience with the design and sale of the insurance policy is really important.
Brokers also stand out by embracing new ideas and using technology to add to their proposition; motor policies including a dash cam is a good example. Rather than simply being a ‘give away’ the dash cam provides valuable information during a claim, providing a practical benefit to the customer.
Q. Do you believe there is a “whiplash epidemic” in the UK claims sector, and how will this be tackled by the post-election government?
We should make a distinction between two broad categories of personal injury claims; those that occur in ‘real-time’ and those which are pursued some considerable time after the incident. ‘Real-time’ claims, occur when the motorist is seeking assistance right after an accident. In this situation, the customer is primarily interested in getting back on the road and vehicle damage and replacement transport are usually the top priorities. Claims made some time after the accident, are often produced from historic data, usually by a claims organisation canvassing people who may have had an accident in recent years.
I don’t believe that there is a whiplash epidemic in real time claims; the broker, the insurer and the claims handler are focussed on resolving the customer’s immediate problem. If that problem includes personal injury, then the priority will be the customer’s safety, care and ultimate recovery.
Coplus helps some 100,000 people a year, needing fast, practical assistance following an accident. If customer complains of feeling unwell or being in pain, then they have a legal right to seek compensation. But not all injured people claim; a quarter of our entitled customers choose not to, because they feel it is too much hassle.
Historic claims are different. The immediacy of the situation is removed and the customer has more time to consider their position. I am not saying that the practice of canvassing claims from historic data has resulted in a whiplash epidemic, but it certainly produces a very different profile of personal injury claim, introducing the very real problem of non-compliant and sometimes aggressive cold calling.
We now know from the Queens speech that the government intends to see through its manifesto pledge to “crack down on exaggerated and fraudulent whiplash claims” via the new Civil Liabilities Bill. Whilst there is little further detail, we believe the bill will be a ‘cut and paste’ from section 5 of the Prison & Courts Bill, featuring a personal injury compensation tariff and increased small claims limit.
However, it’s unclear if the bill will include the Conservative’s promise to consider a ban on cold calling claims companies. We believe this is an essential feature of any effective plan to reduce fraudulent and exaggerated whiplash claims.
We still don’t know whether the previously proposed tariff and small claims limit rise will remain unchanged, but we do know these reforms will go ahead by 2019; Parliament deciding to sit for two years rather than one, to allow extra time for Brexit legislation.
Q. How will brokers be impacted by the proposed whiplash reforms?
Any analysis of the whiplash reforms must start with the customer. The 2013 Thematic Review on Motor Legal Expenses showed that consumers have a very poor understanding of legal expenses insurance. This may have improved since the FCA’s review but a gap remains between the customer’s perception of legal services and the reality. This knowledge gap is set to widen with the reforms, leaving some customers without access to the legal services they believe they are entitled to. Never has good quality ‘whiplash reforms ready’ legal expenses cover been more important for the motorist.
I believe this is going to be a challenging arena for brokers and one which will require serious and immediate attention. Brokers need to consider their approach to the ‘fair treatment of customers’, – in particular the impact the reforms will have in respect of outcome 5 ‘providing customers with products that perform as they have been led to expect…‘. With customers already unclear about Legal Expenses, brokers will need to work even harder to select a product and explain it at point of sale in a way that the customer will really understand. That’s on top of providing a claims service that delivers on those promises. There is a risk that customers will hold the broker responsible if the legal assistance they thought they would get isn’t there. Of course, it isn’t the broker’s fault that the government plans to effectively remove access to legal services for most motorists, but will the customer see it that way?
Whilst we don’t have a clear timeframe yet, it’s now more likely a case of ‘when rather than if’. Brokers must very soon choose how they proceed with motor Legal expenses in order to be certain that their recommended cover works pre, post and during the transition to the new world.
Q. Do you feel that claims professionals are doing enough to detect and filter out exaggerated claims, and how can this be further improved?
Fraudulent and exaggerated claims are a real problem for the insurance industry and claims handlers must keep working to stay on top of this ever changing issue. That said, we see some excellent anti-fraud initiatives, such as third party cross referencing, low cost ‘gig economy’ inspection services, and even voice analytics. Thinking back to the distinction between ‘real time’ and historical claims then I would say for claims which are reported immediately, the answer is generally yes.
If you contrast that scenario with a speculative, ‘we think you had a motor accident two years ago’, what goes through the customer’s mind? It becomes a purely economic decision about whether to claim or not and their mind-set is completely different. In this scenario, how can the claims manager weed out the fraud and exaggeration?
Q. Where do you identify areas for improvement in the relationships between brokers and their partners?
Brokers are necessarily and rightly very sales and distribution focused. But this can sometimes lead to a loss of focus on the entire customer journey; fulfilment through claims to renewal. Given that these important activities are often outsourced, in many cases to different providers, there is a risk that the customer journey can become fragmented.
Motor claims providers have a responsibility to engage with their broker partners; to understand what the broker’s values and the experience they wish their customers to enjoy. Equally, brokers have responsibility to engineer the business cycle through from sale to renewal to fit their brand values. It’s this engagement in partnership where we feel we make the greatest contribution to a broker’s competitive advantage.
Q. As new technology develops and becomes more readily available, what new innovations will Coplus and the wider broker market be seeking to embrace?
For the purposes of claims validation, dash cam information is incredible valuable. It’s an area that’s really growing, both from insurer backed ‘dash cam policies’ and individuals installing for their own peace of mind. In fact dash cams are one of the fastest growing areas for electrical goods sales with over 3 million now in use. Telematics is remains a significant area of technology in claims, although there is still potential to gather more verification data via this route. These technologies are only going to increase as vehicles become more autonomous.
Q. What steps led to the creation of Coplus’s Brokerplus platform, and how has it been received by the market to date?
It was created to bring our extensive range of policies to the smaller independent broker who can’t access large schemes. The platform launched with a small range and has developed over the last couple of years with additional products and new features in response to our broker’s needs. We now have about 500 products and nearly 400 different broker businesses using it. The design is simple, easy to use and helps brokers work compliantly. We respond quickly to regulatory changes, such as in the case of the Insurance Act, where eligibility statements were included well ahead of the deadline. This means brokers can be really confident that what they are using is completely up to date.
Q. How will the re-branding of Coplus, formerly Motorplus, support future growth and diversification into newmarkets in the future?
Motorplus has been around for 30 years and is known for its motor claims handling. Whilst It remains the larger part of our business, our non-motor products and claims handling business is almost as big. The market understandably doesn’t know that. The idea was to re-brand in a way that was less motor specific yet still sounded like us and retained our brand “DNA”. It is instantly recognisable as being a part of us, and we believe that our non-motor customers will be more comfortable with that.