Delivering global claims service

Jun 22, 2015

Claims service is the most tangible aspect of an insurers brand; the fulfilment of the promise to the customer. Historically however, claims was the (very) poor cousin of the underwriting business, typically stuck away in the basement or back-office. Times have changed however and claims are increasingly seen as a tool for winning business. Now insurers need to work out how they deliver on their promise in an international context. As insurers increasingly go global, so their ability to deliver a consistent claims service across their offices is vital in building a worldwide brand.

The story so far

Casualties are not, by their very nature, regional and can happen anywhere, at any time, so it seems that the ideal is to be able to offer a seamless claims service around the globe. The challenge is to create an operating model that meets customers’ needs, satisfies regulatory requirements and creates quality and efficiency through optimisation of technology and talent.

We have conducted market research on claims service in London, the US and Singapore, and our Reports show significant differences between how claims service is delivered and perceived in different parts of the world. There is something of a ‘patchwork quilt’ with a variety of operating models and service offerings, with no clear trend for that an ideal approach is being delivered across markets.  

Our research shows that typically insurers are operating a hub-and-spoke model, comprising groups of centrally located (often in London) specialists servicing offices across time zones and different lines of business. This clearly slow down the process, leads to communications breakdowns and hinders the ability to service the client properly. All issues that potentially undermine an insurer’s ability to offer a service that gives them competitive advantage and builds long-term commercial relationships.

Global variation

Each of the markets that we researched has developed differently in relation to claims, with distinctive strengths and weaknesses. 

London's pluses are high specialisation and technical expertise, coupled with a convenient time-zone, strong infrastructure and deep expertise in third-party advisory services such as lawyers and loss adjusters. It is also very strong on building relationships and the face-to face culture is a significant benefit when it comes to negotiating an outcome to satisfy several parties.

London’s weaknesses come down primarily to cost and culture. It is introspective, not forward-looking and resistant to innovation, especially technology. This means that it can be world-class at dealing with complex claims (not just technically, but commercially too) but is inefficient and expensive for handling standard claims.

The U.S. market’s strengths are technical expertise and innovation, particularly in the area of (web) technology. The scale of the market and the culture encourages the use of technology to enable better service and communications.

Its weaknesses however are a tendency to not be joined-up when a commercial judgement is required, leading to over-reliance on legal solutions and rigid process.

“They need to train their adjusters on good communication skills with their clients.  The adjusting process has become so automated that they sometimes forget there are people on the other end, that these claims effect companies financially.”

Source: Gracechurch US Claims Report 2014

Our research shows Singapore’s strengths as dynamism, diversity, strong legal framework and having strong backing from a Government which has a clear commitment to developing a world-class insurance hub. 

Although this is creating growth and momentum for Singapore players, the market’s relative weaknesses are that it is still underweight in expertise. Underwriting has been relatively well served through deploying experienced expats, but claims has had less investment and many foreign insurers do not have local claims expertise available;  a real deal-breaker in such a vast and diverse region. 

There is also very little specific claims expertise in many of the broking firms which means that most claims are typically dealt with by the placing broker who simply emails or posts the claim to the insurer.  Brokers in this market place high importance on having access to local claims teams: the difference for an insurer who has a claims capability is marked, as one senior broker in Singapore commented;

“We get excellent service from (Insurer) because they keep us up-to-date almost every day on what is going on. They even help by having a captain in their office to tell us what the loss improvements are - others don't offer that service at all.”  


 ‘Many syndicates in Singapore don't have any (claims people) here and they need to feed back to London. We need to have people on the ground in Asia to handle Asian claims.’

Source: The Gracechurch Singapore Insurers Report 2015

Where next?

Globalisation will transform strategies and operating models over the next few years; in claims there is the opportunity for ambitious insurers to provide seamless service around the world.  If this leads to claims service becoming less haphazard, then it can only be good for the industry and its customers. 

Our research shows that (business) culture and risk types vary and have to be accounted for in delivering a global claims service, so global insurers need to design the service to align with customer needs, not their own internal systems and ways of working. Shared services may have a place in this, but the same rules will apply.

Research also indicates that even though markets have developed very differently, there is potential to take the best out of each and create a holistic offering that is fit for purpose, rather than an accident of history.

This article was first featured in Insurance Day;