AIRMIC to publish claims best practice

AIRMIC is to bring out a guide for commercial insurance buyers, highlighting the hallmarks of best claims practice. The publication, expected to be ready by the end of the year, will also assist AIRMIC as it moves towards the development of a claims performance index during 2009.

The guide will describe what to look for in evaluating the claims service provided by an insurer: the resources at its disposal, its IT set-up, processes, timescales, operational standards and willingness to accommodate the client’s internal needs. The subject will be discussed at a special AIRMIC members’ convention in October.

The association has, meanwhile, determined the outline shape of its claims performance index, which will consist of two key elements:

1. An audit of insurance companies’ claims capabilities, using the guide as a benchmark;

2. An assessment of clients’ experiences of companies’ claims services.

“We decided that a conventional league table benchmarking exercise would be exceedingly difficult to administer and would inevitably oversimplify matters. An insurer that meets the needs of one buyer admirably may not be right for another. There’s no substitute for human judgement, but this index should ensure that it is very well informed.

Paul Hopkin, AIRMIC technical director

The index will be qualitative and will not assign scores. AIRMIC will, however, express an opinion on whether or not a company’s claims operation meets minimum requirements.

All seven of AIRMIC’s insurance partners have agreed in principle to support this, and it is intended to approach other insurers later in the process.

“After extensive discussion with our members and insurance partners we have decided that this is the best way forward,” said technical director Paul Hopkin. “Ultimately it will be for the individual buyer to assess each insurer in light of the organisation’s requirements.

“We decided that a conventional league table benchmarking exercise would be exceedingly difficult to administer and would inevitably oversimplify matters. An insurer that meets the needs of one buyer admirably may not be right for another. There’s no substitute for human judgement, but this index should ensure that it is very well informed.”

The idea of a claims performance index, previously dubbed a willingness to pay index, first emerged during the 2005 AIRMIC conference. Surveys of AIRMIC members have shown overwhelming support for the idea.