As a result, insurers are caught in the “claims triangle” during claims processing. It is important to strike the right balance between the three dimensions – customer satisfaction, claims expenditure, and processing efficiency.
Strong partnerships are needed to overcome this challenge. Various service providers have therefore developed over the years into indispensable partners in the area of claims, whether it is a case of outsourcing small-scale and highly repetitive processes of document checking or the provision of applications for automated assessment of the claims amount. In addition, the major insurers have also developed vertically and built up entire eco-systems around the topic of claims via the connection to workshop chains and expert networks. Despite the now-established dominance of some major car insurers, the claims market also continues to be very dynamic, as can be seen from Allianz’s very recent investment in a majority share of Control Expert. Entering into strategic partnerships in the claims sector, or the operation of entire claim eco-systems, has become a critical success factor in the insurance market, both in terms of customer satisfaction and in the cost-effective processing and settlement of claims for the insurer.
Insurers have also been facing new challenges since the outbreak of COVID-19 in Europe at the beginning of March and the resulting cuts to society and the economy. The first indications show they are in a relatively comfortable situation as, for example, lockdown restrictions result in lower traffic volumes and therefore fewer accidents; however this fact creates the opposite problem of lower workshop utilization for affiliated bodywork and paint outlets. This became clear to some major loss controllers in mid-March, i.e. just a few days after the outbreak in Germany. Riparo reported a 20% decrease in brokerage to its workshops, and this figure was close to a third for the Innovation Group. Especially in the case of smaller private workshop companies that rely on the contribution of claims from major insurers and loss adjusters, such declines threaten their very existence. This means there is also greater concern in the insurance industry that it will no longer be possible to guarantee the usual performance of its own claims network after the crisis, due to potential bankruptcies. The insurers’ claims triangle mentioned above would then be in a dangerous imbalance.
HUK-COBURG is one of the first to respond to the effects of the coronavirus crisis and would like to help its partner companies. Its offering to its partners is up to 50% repair cost advances being available immediately upon receipt of plausible cost estimates. In addition, HUK is assuming the cost risk for a replacement vehicle required in the event of repair delays. Although these measures can cushion short-term liquidity bottlenecks for workshops, they will not be sufficient everywhere as the crisis progresses. Insurers should therefore use the current situation to look at their claims network strategy and possibly reposition themselves in the long term. It could be worthwhile to intensify the partnership, for example, where claims service providers or workshop partners encounter difficulties. Alternatively, maintenance capacities can also be pre-financed with financial support and called up at a later date. In addition to the car business, this approach offers attractive settlement advantages for post-coronavirus times, especially in the home/residential building insurance segment, which is characterized by turbulence and accumulation. Insurers maintain their network by means of an active approach during the crisis, and can thereafter guarantee or even improve the usual service level for their customers in the event of a claim/benefits.
