The point at which a claim is made is the point of insurance itself. Coverage is selected, sums insured and levels of indemnity established and premiums paid all on the basis that when a qualifying loss occurs the policy will trigger and the claim will be paid.
Any claim situation – even those that appear straight forward – can still have challenges. The intricacies of the contract, the unique characteristics of the loss, the speed of its development, the nuances of the regulatory environment, the potential for legal action and the volatile inflationary landscape all add layers of complexity to the claims process.
Speaking at the recent Global Programmes Conference in London, James Rayner, global relationship leader, said
“preparation in advance is therefore critical to reducing the risk of disruption, enabling the quick and efficient flow of information and delivering the speediest possible positive outcome.”
Early engagement is a must in any claim situation. To achieve that with the minimum amount of delay requires tried and tested processes – having in place comprehensive protocols on a Global Programme provides the best possible starting block for any loss scenario.
It is imperative that there is also a full understanding of the dynamics between all parties to the claim – corporate, insurer, broker, loss adjuster, reinsurer and in a growing number of cases, captive. That clear line of sight means all are fully versed in the roles and responsibilities they must undertake in the event of a loss.
Robust processes should also be in place for the capture of core information as early as possible in the lifecycle of the claim. What information is required and what is currently available? Who is responsible for gathering that data, how is it available and who must it be shared with? Answers to all these questions must be clearly established.
Another component that must be well defined is the communication process. Failure to communicate effectively is one of the main areas that can bring the claims process to a juddering halt. What are the key channels, what is the communication chain, what must be communicated and who are the key stakeholders?
Scenario planning is key to validating such protocols and procedures. Consider relevant scenarios based on the scope of the particular policies and assess how cover will respond under different claims events. Test business continuity plans and disaster recovery measures to help mitigate impact in the event of a loss. Remember that such plans should reviewed regularly – these must be live documents.
A thorough understanding of the specifics of each policy is also necessary. Often gaps in coverage only come to light in the event of a loss. Also, consider aspects such as ‘difference in conditions’ and ‘difference in limits’ provisions that are in place in Master policies.
Planning should also factor in the wider ecosystem in which the claim takes place. Evaluate the impact of local regulations, recent developments such as sanctions and any other legislative shifts that could have a bearing on how a claim plays out.
As with most undertakings, preparation is vital to achieving successful claims outcomes. It creates that solid base from which to push off in the event of a loss, moving forward confident in the knowledge that the key phases of the response are clearly signposted and everyone involved fully understands their role.
Having this core foundation also enables much greater flexibility in how the loss is responded to. Events can change, planned for scenarios may not play out as expected. Well tested procedures mean that all parties can quickly adapt and shift to achieve the best possible outcome.
