Commercial insurance buyers need more information about insurers' willingness to pay claims promptly and fairly, as opposed to their financial ability to do so, according to AIRMIC technical director Paul Hopkin. As a result, AIRMIC is in the early stages of developing an index that would supplement solvency ratings.
He explained, “The ratings agencies provide plenty of information about insurers' financial ability to pay, but there's no reliable data as to their willingness to do so in a fair and prompt manner, yet many risk managers would put this as their top priority.”
According to Hopkin, anecdotal evidence from AIRMIC members indicates wide variations in performance. “Our members sometimes get a superb service when they make claims, but this is by no means the norm.”
The aim of the exercise is to collect objective data about insurers' claims handling and payment practices. Said Hopkin, “We have gone into this exercise without any preconceptions, and we're certainly not gunning for any particular firm. Our aim is to give buyers objective data about the willingness to pay with a view to encouraging higher standards overall.”
Areas of concern include whether an insurer has enough skilled staff and the IT systems to deliver a fast and efficient service, whether information about claims, documentation and policy wordings is accurate and accessible, and whether there are established procedures to support unbiased and fair responses.