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Thoughts on tendering process a year on from the Cumbria Floods

Neil Foster, head of Cipher Professional, gives us his thoughts on property claims management in times of surge.

The tendering process for property claims management services provided within my industry can be frustrating, especially in times of surge when project management skills and communication are key. People truly need us in a surge, and after all the surge events we have witnessed over the decades, we should have learnt by now how to deliver a consistently good property claims experience. Learning and education ought to have improved given the frequency of these events, however even I am dismayed with the progress we have made and it still feels we could do much more.

I have worked in the property insurance sector since the time of the dinosaurs! Indeed, I vividly recall the frantic loss adjusting days during The Great Storm of 1987 and the Towyn floods of 1990. Like many still engaged in this sector I remain hopeful that with grey hair comes the wisdom of experience!

My experience originates from working for an insurer as well as being involved in loss adjusting and then working in the supply chain. I have worked with national loss adjusters and run my own adjusting practice and building contracting company, a restoration business and a flooring business. Within my time I have also worked abroad and seen how things are done elsewhere, some better and some things worse!

It is clear to me that we need to offer policyholders an integrated project managed claims solution via a range of ‘pick and mix’ tendering process services supported by an integrated common IT software platform and robust communication methods. The customer should, more often than not, be able to make an informed decision based on consistent and clear information.

Disappointingly even in the most recent floods of last winter there were still many failings driven by a number of factors including:

  • The race to complete property claims can often drive the wrong behaviours;
  • Over-enthusiastic, and often uncontrolled, strip out works often performed by labourers with little supervision or construction knowledge;
  • Alarming oversight of Health and Safety compliance;
  • Drying regimes which are prolonged by the likes of open floor voids and missing airbricks;
  • Boilers and radiators switched off in preference to costly driers that aren’t any quicker;
  • Buildings allowed to sweat rather than breathe;
  • Pipes not repaired and still leaking months later;
  • Inadequate thought to the impact on adjoining properties and the influence the works will have;
  • Failure to protect contents left upstairs which then suffer from dust or damp;
  • Delayed assessment and validation of contents, many of which were restorable;
  • Adequate assessment and capturing of evidence for recoveries.

Generally we take our eye off the real goal; getting the majority of customers back into a functioning property without being distracted by non-value added processes or fragmentation of suppliers. We forget that these are people going through and upsetting and stressful time.

There continues to be pressure from the FCA for insurers to perform in the busiest periods. But surge failures in the sector will continue while insurers insist on sticking to non-surge schedules of rates and reducing the capacity of supply chains through a reduction in the number of claims being passed to property reinstatement claims managers. The industry data shows that the average surge claim cost continues to rise exponentially, despite insurers’ efforts to control costs.

Sometimes a claim goes well. I was involved in a claim in the Cumbria 2015 surge where the insurer used consistent approach to the scope of works and established regular and meaningful engagement with the supply chain. This enabled any delivery issue to be quickly and clearly brought to the fore. Experiences were shared, problems discussed, solutions sought and, if in-house expertise could not deliver a definitive answer, experts were found quickly. The engagement and communication across the supply chain could have been easily dismissed and forgotten during the stresses of daily delivery. However, everyone involved in the claim showed how the barriers of competition can be broken down to achieve the best results for the customer. The insurer was also excellent at explaining their own challenges, including the impact of predictive forecasting on year end results!

The recently launched Bonfield report is another opportunity to tackle the wider challenges the property insurance industry faces. The Bonfield report states that everyone involved in property claims needs to work together to ensure that home owners understand the issues they face living in a flood area, and how they can protect their homes to reduce the risk of flooding in the future. The question of the industry working more closely together in surge would in my view bring benefits to the home owner as well as saving insurers money in the future.

It is time for the suppliers and insurers in this sector to step up and take the lead, either in partnerships or by appointing one sole project manager for each claim. At the centre of this there needs to be professional people with the right mind-set to make sure these claims are actually managed.

I believe that Cipher Professional is perfectly placed to help the sector overcome the recurring issues faced by us all in a surge. The skills and approach we have developed brings a simple but effective approach to project management and coordination, ensuring that more complex claims, and in particular flood claims, are run smoothly with the customer at the heart of the process.

I would be delighted to discuss views about how the industry can move forward so please get in touch.

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