Can Lloyd’s insurers compete with composites in the UK Mid Market when it comes to claims service?

Apr 08, 2016

Over the last three years Gracechurch has conducted independent robust research among a national sample of senior claims brokers. These specialists spend their days managing customer expectations around claims and dealing with a wide range of insurers, so they are in a unique position to comment on service quality.

The 2015 Report highlighted some really interesting trends, many of which ought to be encouraging for mid-market businesses and all of which have implications for insurers operating in the commercial space.

What brokers (and customers) really want

Statistically, the top two needs of claims specialists are Speedy Service and Experienced Staff. This combination reflects the need for reassurance and efficiency when a claim happens. As one broker describes a favourite insurer:

“The handlers are easy to talk to and get hold of, willing to fix problems, and want to develop a good relationship with us. All this makes it easier for me to deliver better service to my customers.”

Uniquely competitive market

The interesting aspect of the mid-market sector is the mix of insurers serving it: simplistically the split is between ‘specialists’ (Lloyd’s insurers, smaller specialists) and ‘generalists’, the large composite insurers. This makes for some interesting competitive action. Specialists tend to major on personal service and generalists brilliant basics, with the increasing addition of technological support (portals). All are wrestling with the complex aim of achieving a mix of proactive service and added value in a cost-constrained environment.

In our 2015 Report, Chubb and Hiscox achieve the best service ratings by some margin, but they are small relatively speaking and recent trends show that some of the larger players, notably AXA, Allianz and Aviva deliver quality service across a large cross-section of customers and are introducing effective technology that is being positively received. These large players also have strong brands that are known to customers and therefore have appeal on the sales side of the equation.

The rise of technology

So at the end of 2015 the competitive battleground appears to be taking shape with technology playing a key role.  Between 2014 and 2015, the number of brokers who could name an insurer who offered a technology portal had more than doubled. Usage of portals had also increased significantly in 2015 compared with 2014. But it’s not just the statistics, the real-world experiences of brokers at the customer interface show how they are finding that technology enhances service:

“They deliver a very good claims service, (their technology allows you to) see what is going on. When a client rings up and you know what is happening, you do not look like a fool.”

Tech and people: a potent combination

The prize for being better regarded for claims is winning more quality business and creating greater client loyalty. Indirectly, insurers increasingly know that building claims reputation is brand-enhancing and builds trust.

The 2015 Report strongly implies that the secret to future success in servicing the mid-market is the combination of technology and people expertise: those insurers who get it right will potentially create competitive edge when claims happen. This is a positive step forward and great for customers who have claims.

This also begs the question as to whether the traditional insurance players can harness these positive developments to in future provide better and more relevant products and services for mid-market business customers.