I’ve approached several Executives from different areas of the claims market, to share their thoughts and opinions on a number of topical issues impacting the sector throughout 2023 and looking at the key challenges and opportunities for 2024 and beyond.
Today’s review is with Chris Hall – Managing Director, QuestGates
Whilst over recent years low inflation has meant that salary scales have largely stayed the same, the cost of living crisis aligned to a skills shortage has meant that staff are increasingly looking to move to achieve a large salary increase. Are insurers’ fee scales increasing to reflect this and / or how are you seeking to address this?
During a period of low inflation staff generally only moved if they were unhappy with the company or role. However increasingly staff are looking to move to secure a substantial increase and this aligned to a shortage of suitably experienced personnel with the right service and customer attitudes is driving a rapid increase in salary scales.
Adjuster companies are therefore being forced to seek fee increases in most areas to enable them to retain and recruit the necessary personnel. Whilst we have sought to adopt a responsible attitude, taking a ‘wait and see approach’ as inflation is reducing and salary scales may stabilise, we are having to seek increases, particularly where the fee scale has been in place for several years.
Insurers’ response to this has been mixed, but generally supportive where we can evidence the value we add / we are promoting innovative ways of working, for example using virtual solutions in areas where this is appropriate as an alternative to traditional investigation. However, where increases are refused, this presents a problem as ensuring that Adjusters are compensated appropriately is necessary if we are to maintain the required resource levels to ensure that customer service is maintained and that we will be there when they need us most. This is particularly relevant when a major incident occurs, whether this be just relevant to an individual property e.g. a fire or to a whole community e.g. following flooding.
Fortunately, we have a reputation for high quality service delivery and work in areas where technical expertise rather than ability to handle high volumes of low value claims is key. We also have a strong track record for being open and honest with both our staff and clients which has enabled us to find workable compromises, but we are not complacent and if economic conditions deteriorate further this could become a major issue.
Following the pandemic, home working became the norm but many employers are now finding that this adversely affects productivity and is impacting staff mental health. Are you seeking to return to office working and if not, how are you addressing issues around communicating, training and mentoring staff?
Prior to the pandemic, reflecting the nature of our business, more than 50% of our staff were already home working and our technology platform enabled us to seamlessly move to 100%. We regularly liaise with and survey our staff and following the return to normal, we implemented a flexible hybrid model that met their stated requirements. However, this has not been without its challenges, particularly in relation to training and mentoring staff but our systems and processes, supported by our technology enable us to monitor performance whilst maintaining a flexible stance with those who struggle if not working in an office environment.
Central to our attitude to home working is the need to put our customers and staff first and we continue to liaise with our clients and consult with staff regarding what works best for them, so that we can make properly informed decisions / get the right balance. Our current agile model is working well on the whole, with the right balance between home and office and we are using a combination of virtual and in-person tools for staff communications and training whilst ensuring the ‘at desk’ time is well spent giving line management the opportunity to coach and mentor staff, especially new recruits and those that find home working difficult. We are also using virtual seminars combined with in-person team briefing/training sessions and expect to see more of the latter in 2024.
AI is increasingly being rolled out across insurers processes. What is your attitude to AI and how do you see this developing over coming years?
We see AI as an enabler freeing up the time of qualified, experienced staff from the more mundane rather than a replacement for skilled professionals. We have embraced tech where it adds value and are working in conjunction with clients to explore and exploit the benefits in terms of system integration / back office and routine data sharing / process efficiencies.
AI’s strength is in automating the simple and repetitive tasks that customers often don’t see but are vital to Insurers and keep the “wheels oiled”. But customers want the personal touch of a dedicated person handling their claim, particularly in relation to the larger more specialist claims that we handle which requires making decisions that are not algorithm based and take into account empathy and out of the box thinking. The main benefit therefore will be streamlining processes giving more time for the loss adjuster to focus on the customer / settlement.
Inevitably customers will have concerns about how AI will be applied and the potential impact on them. Transparency and honesty will be vital in obtaining customer confidence which is why I am on the steering committee of the group which has developed a voluntary code of conduct for the development, implementation, and use of AI in claims which will be launched on 30/1.
How is the impact of customer duty affecting your business and with many involved in the claims process seeing an increase in complaints, what do you consider the reasons for this to be and what are you doing to address this?
During the pandemic complaints became less frequent as people were more aware of the difficulties involved in progressing claims but following the “return to normal” supply chain and labour shortage problems impacted the ability to progress claims whilst expectations were higher and this has led to increased dissatisfaction in the time needed to complete repairs.
The nature of our business is such that we get a very low level of complaints, indeed we regularly get a much higher ratio of compliments. Whilst the implementation by the FCA of “consumer duty” led insurers to increase their focus on meeting customers’ needs, the type of work that we do meant that most of the requirements were already being met, although we are not complacent and there has been an increased need for us to be able provide evidence of compliance which we do through a combination of measures e.g. complaint / compliment ratios and trends, NPS scores, our indemnity tracker, consumer duty and vulnerable customers policies / dashboards etc.
Generally, businesses that are already customer centric should be able to adapt to the requirements of consumer duty, although AI can play a big part in reducing customer complaints particularly around delays / communications.
Customer and client requirements and expectations are increasing but staff now expect a better work / life balance and are more aware of the potential impact on mental health. How is this impacting your business?
There is no doubt that this is a growing issue and puts a huge strain not only on the staff directly affected but also the Managers and HR staff that deal with the issues day to day. Specialist training and support is necessary to ensure we don’t overburden key staff when dealing with these issues.
The health and well-being of our employees is of paramount importance, and whilst COVID did present some challenges our focus remains on maintaining a harmonious working environment for all employees. Six years ago, we introduced a variety of mental health and well-being initiatives, including offering a wider range of mental health training, online support, counselling, and our in-house mental health first-aiders. In conjunction with the hybrid working model, introduced during COVID, we believe that we have the framework in place, however we will always look to explore further options and resourcing to assist with the growing awareness and changing landscape in regard to mental health.
A number of insurers have withdrawn from certain markets whilst mergers and acquisitions have reduced the number of potential sources of business for those involved in claims handling. These factors, together with the impact of a hard market has reduced brokers ability to insist on certain suppliers and / or processes. How has this impacted your business?
We have strong relationships with most insurers and brokers and service remains our key driver, regardless of the size of the account. We focus on evidencing the value we add, building relationships that last and looking to expand through organic growth and acquisition where we see opportunities to either increase our capacity in areas where we are currently active or to add specialist services that extend our range etc.
Delivering a great service is absolutely key and this is what all brokers are influenced by. Brilliant service and effective communication deliver a message that allows brokers to have confidence in the panel suppliers and avoids them having to ask for a deviation from it.
Furthermore, our recent acquisitions have been focused on adding expertise such as structural engineering, surveying and legal services so that we can offer a wider range of seamless services and widen our operations and client base to those outside the insurance arena.
What is the greatest challenge facing the claims market moving into 2024 and beyond?
The recruitment and retention of staff in a market where there is a shortage of skills, and an expectation of large salary increases is likely to remain the biggest challenge. However, this is exacerbated by insurers needing adjusters to prove their ability to meet the FCA requirements around consumer duty while, at the same time exploring digital and insourcing options that may reduce the volume of claims passed to adjusters. This requires a flexible resource if standards are to be maintained, particularly during surge but some insurers’ procurement teams have still to amend their practices to reflect the fact that if you reduce the volume of business but expect higher standards, traditional fee scales are no longer sustainable. Fortunately, we have never worked in the high-volume low margin arena where the issues that this causes are most acute. However, we are not immune, and our response has been to focus on proving that we can add value in relation to both service and cost control and by diversifying to provide wider services in areas where technical skills cannot be replaced by the likes of AI.
Right International are market leading recruiters to the Loss Adjusting, Claims and wider Insurance market.
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All the best,
Gary Pike
Founder & MD Right International
